Murdoch and the poisoned China chalice

On a trip to Shanghai in 1997, I remember Rupert Murdoch remarking that the Chinese Communist Party was in reality the world's largest Chamber of Commerce.

In many ways he was right. No regime has ever embraced capitalism and the pursuit of riches with more fervour than the Chinese. The problem for Murdoch was that the ardent capitalist leadership of Beijing was not – and still is not – a believer in democracy.

Murdoch's proven formula of success in the West – where media power and economic clout has time after time delivered political influence – just doesn't hold sway in the Middle Kingdom where the ruling elite, unaffected by public opinion and not subject to election by the masses, can afford to spurn the moguls' increasingly desperate overtures.

To his credit, Murdoch was one of the first to recognise the enormous potential of the Chinese market.  As early as 1985, the media magnate, who was still in the process of conquering the US and embarking on his extraordinary rise to power in the United Kingdom, saw the future of China.

One of his strengths, and he has many, is his ability to see around corners into the future and see markets where his contemporaries and rivals see none. But Murdoch is a man of his time with an almost colonial view of the world, unable to adapt his European model for success to the vagaries of a culture rooted in Confucianism and communist ideology.

Murdoch spent the best part of a decade and billions of dollars trying to crack the Chinese market – and failed. Although hid did emerge with a new Chinese wife, Wendi Deng. But to his credit and in his own words, "no other American media company or British media company has made any impact there yet.” It is, as the mogul opined, "a very difficult market for outsiders”.

But while the results of Murdoch's unashamed courting of China might be construed a failure, Murdoch's unstinting tilts at the Great Wall of China over a 10-year period did much to revolutionise the Chinese media sector. As in virtually every country that the media magnate has operated, Murdoch has been an extraordinary catalyst for change in China.

In the same way that he took on the Fleet Street unions, turned the British newspaper printing business on its head, and launched cable satellite television in the UK and established the Fox News network in the US, Murdoch's coming to China galvanised the Beijing leadership and set in train a transformation of its former staid, conservative, ideological-driven media sector.

When the Politburo conservatives were about to pull down the shutters on the internet phenomenon, Murdoch's tacit assistance towards putting the People's Daily online opened the eyes of the ruling elite old guard to the potential of the newfangled world wide web. Instead of curtailing it spread, the Chinese people were encouraged to embrace the internet, and despite various attempts by the authorities to restrict or censor its content since, it remains free-flowing tap of information that can never, ever be totally turned off or controlled.

The advent of the Murdoch-funded Phoenix Chinese Channel provided an enormous catalyst for change in China's television industry. Because it was a general entertainment Mandarin-language channel it presented Chinese viewers for the first time a true comparison to the staid, dour programming of the national broadcaster, CCTV. It astounded its audience, which was limited but highly influential, with innovative programming, computer generated graphics and slick presentation skills. It introduced viewers to Western-style news and current affairs formats with a bevy of telegenic female journalists and male news readers who were actually out in the field asking questions rather than stoically reciting statistics of rice production from behind a desk in front of a grey studio set.

It might well have been low brow, populist programming modelled on the success of the Fox cable network in the US, but it proved that Chinese television audience taste was little different from the rest of the Western world. Where Phoenix started a trend in popular television programming, Xing Kong was pure Murdoch brilliance, targeting China's new, young generation of 18 to 35 year old with a mixture of brash, innovative, tabloid television. Much of it was branded "vulgar and degrading” by the Beijing authorities, but nonetheless soon became a programming mainstay for Chinese viewers across the country.

The great irony for Murdoch is that having played so significant a part in the opening up of China's media sector, he has been confined to the outside looking in.

But as much as China learned from Murdoch, it might also be now argued that the aging patriarch is taking from China. While the Chinese leadership struggled at times to comprehend the mogul's pragmatic business style, they were at one with his dynastic ambitions. Every Chinese leader, from Mao Zedong to Deng Xiaoping, Jiang Zemin to Hu Jintao, has manoeuvred during their final years of their ultimate power to ensure a succession plan was in place.

Murdoch, under the influence of the Chinese and the tutelage of his wife Wendi Deng, appears to be doing no less. But to anoint your successors in one thing, to ensure their rise to the top in another and requires the "paramount leader” to step back from the front lines yet exert power from behind the throne.

Murdoch at 80 is well aware that mortality lingers somewhere over a not too distant horizon. While some would argue that he is at the height of his powers, it might also be true that now is the time to firmly cement his dynastic plans in place.

Inside speculation has Elisabeth, who has inherited her father's understanding of the "tabloid marketplace” and who is back inside the family tent after News Corp's acquisition of Shine Group, rising to oversee all of News Corp's film and television production; James, the pugnacious deal maker, running the empire of pay-television and new media platforms across the world; and Lachlan – the only sibling instilled with Murdoch's love for newspapers, perhaps controlling the printing word – as an ideal deputy chairman; a sort of first amongst equals in the boardroom.

And for Wendi Deng and her daughters, Grace and Chloe, there's the China inheritance – perhaps a poison chalice but also an epic whose ending has not been written yet.

As in China, long before power in ceded to the next generation, the names of the chosen successors are pencilled in by those who hold the very reins of power. If Murdoch is indeed at the height of his own powers, he needs to move now not to just to pencil in his own succession plan, but to remain around long enough to see the names are not erased but replaced with indelible ink.

Bruce Dover is the author of Rupert's Adventures in China and the chief executive of ABC's Australia Network.