Google and China: in the Long Term

This is neither a blog post about Google’s motives for changing its mind about China, nor is it a post about the seeming triumph of Baidu in the world’s fastest growing economy, nor is it a post about the Chinese government’s steadfast denials of hacking or its silly propaganda offensive against Google and the US. Those posts have been written already, both by people with greater interest and greater insight than myself. Instead, I would like to explore the long-term ramifications of the Google-China affair, as well as the implications of the U.S. policy response outlined by Secretary of State Clinton.

First, while domestic IT companies will continue to thrive, both the perception and the reality of Google’s situation will have a negative effect on international IT investment in China. When “inside job” memes start spreading alongside a very public insinuation that the Chinese government aided and abetted IP theft on a vast scale, there can be no question that the end result will be a poisoned business environment for IT companies in China. While companies everywhere will always be open to cyberattack, the added danger of physical access to corporate IT infrastructure will lead many companies to rethink placing datacenters and software labs in China. More disturbing is the possibility that IT companies may come to question the loyalty of Chinese staff in an IT world replay of the Wen Ho Lee affair. (To Chinese friends:  you might want to delete that Communist Party membership you wrote about on your resume.)  Factors such as these may lead IT firms to turn to India instead of China as a hub for their low-cost Asian operations, or to Taiwan or South Korea for more expensive, bandwidth-critical investments.

A second development is that Google will harm its reputation by sending mixed messages about future plans in China. The company’s hard stance has won considerable praise from foreign observers used to watching companies muddy the ethical waters when doing business in China. (When Google said no to Zhongnanhai, one could almost hear the gasps of delight in Washington and Silicon Valley!) Thus it comes as no surprise that when Google starts whittling away at the strength of its initial statements, it leaves many of the company’s fans with a sour taste in their mouths. Google’s investors will be left scratching their heads at how Page and Brin — Google’s tech geniuses — could spearhead such a bold position only to have it talked down by Schmidt — Google’s biz guy — in the weeks that followed.  Even worse, for smaller IT companies Google’s actions beg the question, if, in the end, even Google cannot stand up to China, how on earth can we?

Moving on to the Secretary of State’s speech, the main problem with the U.S. approach is that it wants to sidestep the economic issues involved in Chinese censorship and nationalist hacking and wrap everything up in the guise of human rights. Human rights are important, no doubt, but they were not a sufficient cause for Google’s abrupt policy change regarding China nor are human rights behind, say, IP piracy intrusions at Adobe and other IT firms. Moreover, putting human rights front and center is the old familiar anti-Chinese government narrative, a narrative which, while it may please the ears of Western audiences, will ring false to many Chinese citizens who, as Baidu’s Sun Yunfeng notes, care less about political issues and more about “the most routine information in economy, culture and technology fields.”

While the speech was more a statement of principles than a policy outline, there were a few moments in which Clinton’s statements played into Beijing’s hands. Consider the passage where Secretary Clinton announces U.S. government assistance to develop “circumvention tools”:

We are also supporting the development of new tools that enable citizens to exercise their rights of free expression by circumventing politically motivated censorship. We are providing funds to groups around the world to make sure that those tools get to the people who need them in local languages, and with the training they need to access the internet safely. The United States has been assisting in these efforts for some time, with a focus on implementing these programs as efficiently and effectively as possible. Both the American people and nations that censor the internet should understand that our government is committed to helping promote internet freedom.

We want to put these tools in the hands of people who will use them to advance democracy and human rights, to fight climate change and epidemics, to build global support for President Obama’s goal of a world without nuclear weapons, to encourage sustainable economic development that lifts the people at the bottom up.

As an unstated policy of the United States, this approach would be precisely right — the U.S. should be working to strengthen democratic movements in authoritarian countries. On the other hand, as a stated policy, the United States is giving ammunition to regimes in Beijing (and elsewhere) to label dissidents as pawns of Washington, to stigmatize them as the agents of foreign powers. Although Westerners may find charges such as “information imperialism” laughable, we should not ignore Beijing’s rate of success at making common Chinese distrust any critics deemed to have too many friends in foreign capitals. Furthermore, Washington runs the danger of not only stigmatizing individuals but also technology. If proxy services are explicitly linked to U.S. policies, the Chinese government is all but certain to double their efforts to thwart all software designed to leap over the Great Firewall, and because Beijing exports information control technology to other authoritarian regimes, there’s a danger of the closed Internets everywhere being quickly “immunized” against the tools designed to crack them open.

Lastly, we should always remember that although China itself is not democratic, there are democratic forces at work in the country, and those forces have been increasingly successful at forcing changes in government policy.  Netizens, dissidents, and the Chinese consumer each wield their own forms of democratic power, but Chinese democracy is prickly and resents paternalistic Western interference.  Consequently, Chinese can be vociferous in their criticism of the government so long as that criticism is seen to be genuinely “Chinese” in origin. The best thing that Google can do in the long term is to let the Chinese people, not Washington, say “Don’t Be Evil” to Zhongnanhai.  Despite Baidu’s homefield advantage, Chinese companies are service leaders, not technology leaders.  Google is the number one technology leader, and Chinese consumers can appreciate that fact.  At the same time, the best thing that the West can do in the years ahead is to treat information control technologies like we would nuclear weapons: fight to control the spread of the technology; work to reduce its application, especially in democracies; but ultimately hope that governments can mature to the point where such technologies are seen as archaic and unnecessary.

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