{"id":1447,"date":"2014-06-12T14:17:41","date_gmt":"2014-06-12T14:17:41","guid":{"rendered":"http:\/\/www.chinesepen.org\/english\/?p=1447"},"modified":"2014-06-12T14:18:13","modified_gmt":"2014-06-12T14:18:13","slug":"hong-kong-media-worries-over-chinas-reach-as-ads-disappear","status":"publish","type":"post","link":"https:\/\/www.chinesepen.org\/english\/hong-kong-media-worries-over-chinas-reach-as-ads-disappear","title":{"rendered":"Hong Kong Media Worries Over China\u2019s Reach as Ads Disappear"},"content":{"rendered":"

=By MICHAEL FORSYTHE and NEIL GOUGH June 12, 2014<\/span><\/p>\n

\"\"<\/p>\n

Jimmy Lai of Next Media Limited, which is known for its strong advocacy of democratic freedoms in Hong Kong.
\nAlex Hofford\/European Pressphoto Agency<\/p>\n

HONG KONG \u2014 In what may be a major escalation of pressure by mainland China on Hong Kong\u2019s independent-minded news media, two major British banks have stopped advertising with one of the city\u2019s biggest newspapers, a top media executive said.<\/span><\/p>\n

The executive, Mark Simon, of Next Media Limited, said two London-based banks, HSBC and Standard Chartered, ended longtime advertising relationships late last year with the paper, Apple Daily, after being told to do so by the Chinese government.<\/p>\n

\u201cThe government is running their business now,\u201d Mr. Simon said in an interview. \u201cHSBC and Standard Chartered don\u2019t have to do what they did.\u201d<\/p>\n

Both banks said their advertising decisions were commercial.<\/p>\n

The charge that politics may have played a role in the pullout illustrates the increasing power of the Chinese government to influence the behavior of not only its state-owned companies, but also global companies, using the strength of its huge domestic market as a tool. It also reveals the hard-nosed tactics China\u2019s central government will take to muzzle the relatively free news media in Hong Kong, the former British colony that was able to keep a high degree of autonomy and civil liberties as part of the terms for its return to China in 1997.<\/p>\n

Next Media Limited, a newspaper, television and Internet company based in Hong Kong and Taiwan, is known for its strong advocacy of democratic freedoms in Hong Kong. Mr. Simon, the company\u2019s commercial director, said a representative from HSBC told him that the decision to stop advertising came after the deputy director of the central government\u2019s liaison office in Hong Kong, Yang Jian, told the bank to end its advertising relationship.<\/p>\n

A representative for the liaison office was not available to comment. Under its owner, Jimmy Lai, Next Media has been sharply critical of the Beijing government. On Wednesday, for example, an animated video on its website excoriated a policy paper on Hong Kong issued by China on Tuesday. Called \u201cHigh Degree of Autonomy Becomes Total Rule From Beijing,\u201d the video warned of increasing control by the Communist Party in Hong Kong.<\/p>\n

\u201cA new round of Sinification of Hong Kong has begun,\u201d the narrator says. \u201cThe white paper is just the beginning.\u201d<\/p>\n

Anson Chan, who served as the chief secretary \u2014 the second-highest-ranking official in Hong Kong \u2014 under the colonial government and in the new administration, has been asking the banks in recent months about the advertising pullout. Ms. Chan is an advocate for news media freedoms and for universal voting rights in Hong Kong.<\/p>\n

In letters reviewed by The New York Times, senior executives at the two banks replied to Ms. Chan, emphasizing that advertising decisions are commercial. Neither of them refuted Mr. Simon\u2019s contention that the decision to end the advertising relationship was politically motivated. \u201cThey certainly did not provide the assurances I was seeking,\u201d Ms. Chan said.<\/p>\n

\u201cAn international bank like HSBC and Standard Chartered, if you act this way, it is the first step down a very slippery slope,\u201d Ms. Chan said in an interview. \u201cWhat happens the next time they call up and say we don\u2019t like you doing business with certain clients? Are you also going to cave in?\u201d<\/p>\n

Hong Kong media organizations critical of the mainland have said for years that the central government was pressuring advertisers to pull sponsorship. But the government\u2019s targets in those cases were Chinese companies, many state-owned, that had little choice but to obey Beijing.<\/p>\n

Such was the case in January, when Shih Wing-ching, the founder of one of Hong Kong\u2019s free newspapers, AM730, said in a radio interview that the Beijing government had pressured \u201cmainland-backed companies\u201d to stop advertising with the paper, according to a report in The South China Morning Post.<\/p>\n

Losing HSBC and Standard Chartered, which were until last year among Next Media\u2019s biggest financial advertising clients, has hurt the Hong Kong-listed company. The two banks had spent a combined $3.6 million in 2013 on Next Media advertising before HSBC\u2019s spending ended in August and Standard Chartered\u2019s ended in December, Mr. Simon said. Neither has advertised since.<\/p>\n

\u201cOur decision-making regarding deployment of marketing is based on commercial considerations with respect to the purpose of the campaigns involved and target segments,\u201d Gareth Hewett, an HSBC spokesman based in Hong Kong, said in a statement.<\/p>\n

Gabriel Kwan, a spokeswoman at Standard Chartered, said, \u201cIt\u2019s a marketing decision.\u201d<\/p>\n

Hong Kong\u2019s newspaper advertising market has been declining slightly, but nowhere near as much as in other markets, including the United States, said Alex Ko, the general manager of the business department at Ming Pao, a Chinese-language newspaper in the city.<\/p>\n

Mr. Ko said that the newspaper\u2019s advertising had not been affected by political pressure and that Standard Chartered and HSBC banks remained advertising clients. \u201cI don\u2019t feel any reasons apart from the business considerations,\u201d he said of advertising volumes.<\/p>\n

In Hong Kong, print circulation and advertising have been weakened by the growth of the Internet, Mr. Ko said. The territory supports 12 paid newspapers and four free papers, he said.<\/p>\n

\u201cThe advertising is a little bit declining,\u201d Mr. Ko said. But in Hong Kong, \u201cthe newspaper market, the advertising market, is not so declining as in the Western countries.\u201d<\/p>\n

He added: \u201cIn Hong Kong, business considerations still dominate.\u201d Mr. Ko declined to comment on reports about Apple Daily\u2019s losing advertisers because of political pressure.<\/p>\n

Mr. Ko said many of the main companies order ads through the major advertising companies. He said, \u201cWe do trust their professionalism to assist the clients to place the ads to suitable media.\u201d<\/p>\n

HSBC and Standard Chartered\u2019s advertising covered not just the group\u2019s flagship Apple Daily newspaper print edition, but also magazine and Internet ads. Apple Daily\u2019s website is one of the most widely visited in Hong Kong, with 1.5 million daily unique users, according to stock exchange filings. And both banks maintain large retail and trading operations in Hong Kong, with their namesake skyscrapers planted in the center of the city\u2019s central business district.<\/p>\n

The \u201cH\u201d in HSBC stands for Hong Kong. But the \u201cS\u201d stands for \u201cShanghai,\u201d and both HSBC and Standard Chartered have been expanding in mainland China after rules restricting foreign banks were relaxed as a condition for China\u2019s entering the World Trade Organization more than a decade ago. HSBC has also relocated thousands of so-called back office workers to the mainland.<\/p>\n

Mr. Simon said two local advertisers, Bank of East Asia and Hang Seng Bank, an HSBC subsidiary, also stopped advertising around the same time as HSBC and Standard Chartered last year.<\/p>\n

Mr. Simon\u2019s allegations, reported in The Sydney Morning Herald, come amid increasing apprehension in Hong Kong about the encroaching influence of mainland China in its economic and political affairs, and a surge in attacks against journalists.<\/p>\n

A poll released in April found that for the first time in a decade, most Hong Kong residents disapproved of the way the central government in Beijing was handling its relations with Hong Kong.<\/p>\n

In February, Kevin Lau, the former editor in chief of Ming Pao, who had been pushed aside the previous month, was attacked by assailants wielding cleavers, the weapon of choice of the city\u2019s organized crime gangs. He suffered serious injuries and is still recovering.<\/p>\n

Last June, a vehicle rammed into the front gate of Mr. Lai\u2019s home in Hong Kong, and an ax and a knife were left at the scene. Thousands of Apple Daily newspapers were set on fire in two separate cases that month. The company detailed the events in an animated video.<\/p>\n

Chris Buckley contributed reporting, and Alan Wong contributed research.<\/p>\n

From:http:\/\/cn.nytimes.com\/china\/20140612\/c12chinamedia\/en-us\/<\/p>\n","protected":false},"excerpt":{"rendered":"

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