Making Waves, Carefully, on the Air in China

Later, Liu also instructed Phoenix to produce a series of flattering shows about Deng. None mentioned that Deng ordered the troops into Tiananmen.

Building the Empire

By the mid-1990s, Liu was looking to start a global, Mandarin-language television network that could rival CNN. Satellite technology made his dream possible, allowing a station to beam to a vast region for a fraction of the cost of building a regular TV network.

Rupert Murdoch's News Corp. controlled access to Asia's main TV satellite. But China had just banned the use of home satellite dishes, and Murdoch's Chinese channel was in trouble. Murdoch needed a local partner with good connections; Liu needed access to the satellite. In 1995, they formed a joint venture to take over the station and re-launch it as Phoenix.

They also gave a 10 percent stake to CCTV. "It was a symbolic gesture to show we wouldn't oppose the Communist Party," Liu said.

Even before the deal was completed, Liu recruited a team of former colleagues and made the case for Phoenix in meetings with party officials. "All these people were our friends," Wu recalled. "They said go ahead. They thought we could change that station into something useful."

The party saw Phoenix as a way to beef up its presence in Hong Kong. But Liu always had his eye on the mainland. In 1997, Phoenix introduced its first news program, referring to it as "current events" to avoid alarming authorities determined to control the news. Gradually, Phoenix added more news, then talk and commentary shows -- something virtually absent on state TV.

The strategy worked. The programs were cheap and appealed to viewers tired of the staid presentation on CCTV. In 1998, even the premier, Zhu Rongji, endorsed Phoenix by telling one of its reporters during a televised news conference that he was a fan.

Only hotels, universities and certain state employees were supposed to receive Phoenix, but residents began installing satellite dishes illegally to pick it up. Cable operators also started offering Phoenix, taking the signal from an official satellite dish and distributing it widely in violation of regulations. Government censors could still cut off Phoenix by blocking its transmission from the official dishes.

Market studies showed the channel gaining a huge following -- more than 140 million viewers -- among China's most affluent and influential citizens. Liu built on that popularity, starting a magazine and a Web site. Despite the risks, he decided to launch China's first 24-hour news station, too.

"He said China was already changing, the process had started and wouldn't stop," recalled Chui Keung, an army buddy of Liu's who became his deputy. "He said if we didn't make the breakthrough, someone else would. And if someone else did it, we'd lose a chance to make history."

The Phoenix InfoNews channel went on the air in 2001 and immediately ran into trouble. The government barred even hotels from showing it. Without viewers or ads, the station hemorrhaged more than $10,000 per day, Chui said.

As the months passed and the losses mounted, shareholders blamed Liu and called on him to close the station. But Liu kept broadcasting. Two years and millions of dollars later, he finally persuaded the government to stop blocking the channel.

Mixed Signals

Phoenix is now the channel of choice for much of China's new elite and perhaps does more to shape its political views than the party's media outlets.

It is most aggressive in its reporting of world events, and sealed its reputation as a faster, more truthful alternative to CCTV after the Sept. 11, 2001, terrorist attacks in the United States. While CCTV waited hours to report the news, Phoenix went live within minutes and replaced regular programming with 24-hour coverage.

The station is more timid in reporting domestic news, often avoiding sensitive stories that the best state newspapers tackle. But under Liu's guidance, it regularly challenges the party's control of information with critical reports and documentaries on dark moments in the party's past.

On one of its most popular shows, a commentator reviews headlines from newspapers around the world -- and slips in news that has been censored in state media. A similar show covers material on the Internet that is inaccessible on the mainland. Another program is modeled after CBS's "60 Minutes" and has probed China's AIDS epidemic and rural unrest.

But there are limits as to how far Phoenix will go, and Liu encourages self-censorship among his staff. The station covered Taiwan's elections, but never lets anyone express support for the island's independence. It also refrains from critical coverage of party leaders and avoids interviews with dissidents who call for democratic reform.

"Once Liu told me, 'Why should we make Beijing angry? Let someone else do it,' " said Chen Helin, the director of Phoenix's news channel.

Phoenix also broadcasts fluffy shows on the economic triumphs of the provinces, and several of its pundits parrot the party's views with enthusiasm. The station aired one fawning interview with the health minister just days before he was fired for covering up the SARS epidemic. It also produced a show attacking the banned Falun Gong spiritual movement.

Liu spends much of his time wining and dining party officials. In a recent meeting with his top executives, he reported on a session with a member of the Politburo. "They have high hopes for Phoenix. They hope we can do some positive reports," he told them, then suggested a few stories about the Politburo member's city.

Phoenix journalists contend that such programming makes it easier for them to get away with bolder reporting. But others say Liu simply produces better-packaged propaganda than CCTV -- and helps keep the party in power.

Liu is unapologetic, arguing that Phoenix reaches more people in China with more news than any other media organization. "There may be some things we can't report, but we won't tell lies," he said, adding that Phoenix pushes so hard that censors occasionally block its signal.

"Phoenix's relationship with those in power is the same as other people's," he said, with a hint of exasperation in his voice. "To have this democratic sound in China, it isn't easy. It's hard to survive in a crevice, and harder still to grow a tree, but that's what we're doing. . . .

"We have to treasure our position. We can't just do whatever we want."