Only Google Could Leave China
By Ryan Singel and David Kravets January 15, 2010 | 11:28 am | Categories: Commerce, Search
When President Richard Nixon opened the U.S. door into China in 1972, the transcript of his secret meeting with Chairman Mao Zedong at his Peking residence was classified for 25 years.
When Google announced Tuesday it wouldn’t censor its Google.cn search engine anymore — all but committing the “Don’t Be Evil” internet giant to a self-imposed China exile — it took just seconds for its blog post announcing the decision to careen around the world.
Google came to China in 2006, with much of the same optimism that Nixon brought — a belief that engagement would be good for both, and would lead to freedom and prosperity for China’s citizens. The sprawling new condos and shiny American-branded cars in Shanghai seemingly attest to some level of Nixon’s success.
“What brings us together is a recognition of a new situation in the world and a recognition on our part that what is important is not a nation’s internal political philosophy,” Nixon told the chairman, according to a declassified transcript of the historic meeting. “Therefore, we can find common ground, despite our differences, to build a world structure in which both can be safe to develop in our own ways on our own roads.”
With engagement, China has flourished financially with a massive expansion of trade and economic growth, but long-sought political reforms have not followed. China is still ranked as among the world’s worst performers on issues like human rights and pollution controls. Now Google’s confrontation over censorship there has raised anew uncomfortable questions about the costs of accommodating China at a time when the government appears to be tightening rather than loosening its grip. China may be too big to ignore, but when is enough enough?
Different approaches in different countries have produced varying results.
When it comes to smaller nations like North Korea and Iran, the view is stick it to them enough and they’ll suffer enough and will come around, said Susan Kohn Ross, international trade counsel at Mitchell Silberberg & Knupp in Los Angeles.
“People actually made a conscious decision not to purchase things made in South Africa. That led eventually to the end of apartheid,” she said.
But the formula is not foolproof. “There is a whole community out there that will take the position that typically unilateral sanctions don’t work,” Ross added. “We’ve tried that in Cuba and it obviously hasn’t worked. International relations are never easy.”
Certainly, they haven’t been for Google, which agreed to censor search results in China while maintaining the right to tell users searching for forbidden terms like “June 4″ or “Tibet” that it was filtering information. That made Google far more informative than local search sites like Baidu, which still controls the majority of Chinese search traffic.
To be sure, that elevates Google and other Silicon Valley services like Facebook and Twitter as invaluable in times of social upheaval, just as publishers were centuries ago, according to UC Davis law professor Anupam Chander, who is writing a book on what he calls the “electronic silk road,” a reference to the old, overland trading route that connected China to the Western world.
“If you look to history, you find that publishers often served as voice for political dissidents,” Chander said. “You can go back to Galileo and the Inquisition, when a Dutch publisher goes to Italy and smuggles out the manuscript … and goes back to Protestant Northern Europe where this is permitted and publishes his last treatise,” Chander said.
And now Silicon Valley has finally begun to realize that it can be publishers of dissident speech better than any other set of companies in the world, according to Chander, referring to Google’s decision, and Facebook’s and Twitter’s support of Iranian dissidents.
“That’s crucial for Silicon Valley to recognize, and they now see themselves as doing more than creating a social network for sharing photos and see themselves as places to share information about politics and culture,” Chander said.
Google went to China hoping it would be a force for good, and that its decision to compromise its principles would be balanced out by the good that its search engine would bring to Chinese citizens. In 2008, it reported to Congress about a Reporters Without Borders finding that it was censoring far less than other Chinese search sites, including those run by Baidu, Yahoo and Microsoft.
Then came a series of high-profile scandals in China — milk poisoning and shoddily constructed buildings that collapsed in an earthquake — information that had been censored by the government and, by default, search engines including Google. That led some in China to turn to Google.cn, rather than Baidu, because Google would at least tell people when information was being censored — even if the information was missing.
To Google, it looked as though the Chinese public was learning through Google that its government was censoring them, and gave the company hope that its Faustian bargain with China was paying off and leading to a new age of freedom in China, according to an industry source familiar with Google’s situation in China.
But 2009 turned out to be the Year of the Censor in China. The Chinese government decided to mandate censorship software called Green Dam in all new PCs (to which manufacturers acquiesced). In March it blocked YouTube due to videos of anti-Tibetan violence, a block that remains. Then the government began hammering on Google, claiming the search engine was steering too many to pornography. The list of forbidden search terms kept growing.
And then Google announced Tuesday it had been the target of a “highly sophisticated” and coordinated hack attack against its corporate network, and that the hackers had stolen intellectual property and sought access to the Gmail accounts of human rights activists, the very people who Google wanted to help when it entered the country. The attack had originated from China, the company said.
That, according to the source, was the final straw, leading Google co-founder Sergey Brin to finally say enough was enough, and that Google wasn’t going to censor search results anymore.
Making Google’s decision all the more difficult is the dual-use nature of communications technology — which can simultaneously be used by citizens to communicate and by governments to spy on citizens, said Leslie Harris, the president of the Washington, D.C., advocacy group Center for Democracy and Technology.
“Their core business is giving people more access to information and helping people collaborate,” said Harris, whose group applauded Google’s decision. “Their core business is a human rights-enhancing technology. Here the government sees the net as a threat to its control and a way to control the population.”
Google will likely shutter Google.cn and its China offices — largely abandoning a market of 340 million users — since it unequivocally said it was no longer willing to censor search results. That leaves the Chinese very little room to negotiate or save face, as evidenced by its statement Thursday that it would not back down.
On Friday, the State Department officially elevated the showdown into a diplomatic affair, announcing it would soon file a formal complaint with the Chinese about the hacking incident.
For the moment, Google’s bottom line won’t be affected even if human rights concerns embolden the search giant to vacate the world largest online marketplace. Google says revenue from the China division of the internet behemoth is “immaterial.” Some analysts were anticipating it would earn $600 million in China this year, a nice number but not critical to a company that pulled in $22 billion from internet ads last year.
But China is quickly growing a middle and upper class, and the profit growth potential is seemingly unlimited.
Critics jumped on Google, saying the high-profile retreat was just a way to gain back the ethical capital it lost when it decided to censor itself, while pulling out for economic reasons.
But Google spokesman Gabriel Stricker says Google’s position in China wasn’t bleak.
“While our revenues from China are really immaterial, we did just have our best quarter ever,” Stricker said in an e-mail.
Google apparently is alone in its espoused policy to disengage from China, the world’s largest economy and exporter of everything from Ugg boots to iPhones. General Motors sold more cars in China last year than it did in the United States.
Yahoo, for example, said it was “aligned” with Google’s stance but declined to say whether it was considering selling its 39 percent stake in the Alibaba Group, China’s leading e-commerce enterprise.
Yahoo came under heavy fire two years ago when its Hong Kong operation cooperated with the Chinese government’s request to get at a dissident’s e-mail account. That landed Wang Xiaoning in prison for 10 years and put Yahoo executives in front of Congress, which wanted to know why the company was helping China repress human rights.
Yahoo and Google learned from that lesson. Google never put its Gmail servers inside China, thus making it immune to legal requests (but not hacks) from the Chinese authorities. And when Yahoo launched a portal for Vietnam, it also located those e-mail servers outside the border, beyond the legal reach of communist authorities.
Microsoft has its own operations in China, and censors its blogging platform based on blacklisted words given to it by the government. The world’s largest software maker, however, isn’t budging just because Google is going.
“Cyberattacks are an unfortunate way of life, not only in China, but outside China,” Microsoft CEO Steve Ballmer told CNBC in an interview. “We’ve been quite clear, we’re going to operate in China, we’re going to abide by the law.”
The question of how to engage remains a difficult one for tech companies, according to Harris, who says that the principles of the Global Network Initiative are still the best ones for companies and democracy. They require members, which include Google, Yahoo and Microsoft, to assess and manage risk to human rights in their overseas operations.
“You are talking about a technology that everyone acknowledges is critical for liberalization and democratization,” Harris said. “In our world, taking the position that if it’s not 100 percent, you shouldn’t go in is just not sensible if what you want at the end of the day is more human rights and internet freedom.”
And if the upcoming talks between Google and the Chinese government lead to the shutdown of Google.cn, that will be a loss for the Chinese people, even if it’s a win for internet freedom.