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China and Google: Searching For Trouble – Part I

Google’s recent dispute with China is not just about internet censorship; it’s also about China’s evolving role on the world stage, according to journalist and author Jonathan Fenby. It is unlikely Beijing will allow citizens to access banned Internet sites through Google – a condition the company demanded for staying in China. There are also concerns about Internet security in general, but the larger issue will be how multinational corporations engage with a more self-confident China. From protecting intellectual property to guarding against fuzzy legal practices, Western firms may need to reassess their China policy. But this is unlikely to shake China’s growing self-confidence or provoke self-reflection. Opinion polls – though fraught with manipulation – show a surprising amount of national pride. The growing middle class has bought into the country’s rise; this leaves the Communist Party firmly in control. In the end, whatever happens to Google in China, the rest of the world cannot divorce itself from the Middle Kingdom. Indeed, the most important issue of the year may be how China and rest of the world learn to manage their increasingly testy relations. – YaleGlobal

China and Google: Searching For Trouble – Part I

However unhappy, no one can divorce China now
Jonathan Fenby
YaleGlobal, 19 January 2010
Goodbye Google: In Beijing, a Chinese Google user says it with flowers, but the government is not pleased

LONDON: The importance of Google’s spat with the Chinese government over censorship of its search engine in the People’s Republic goes far beyond the issue of freedom of information. The Chinese action fits into a discernible pattern of its still evolving policy; implications of such actions contain major lessons for our globalized, electronic world.

To start with, there is the obvious clash between a government intent on retaining control of what its citizens are allowed to read and, if the reports of hacking into e-mails prove accurate, extending its reach to private communications of citizens whom it regards as foes. Google has threatened to withdraw from China if the censorship is not lifted – a demand most unlikely to be met. The immediate reaction of the authorities to Google’s move was a statement insisting that companies operating in China have to conform to local laws. If those happen to include a ban on access to certain articles on the Falun Gong, Tibet or sensitive historical events, so be it. As a very senior Communist party official remarked to me some years ago, so long as the Party remains in power it will want to control information. Seeing Google shut down its Chinese site is a small price to pay for ensuring that.

Google has threatened to withdraw from China if the censorship is not lifted – a demand most unlikely to be met.

Google’s limited success in competing with Chinese government backed Baidu may have been another reason for its withdrawal. With the bigger Chinese search engine company sticking to the rules, Chinese citizens will lose their access to the relatively free Google search, though the impact on people abroad using Google to seek information on the country will probably not be much affected. That said, the removal from the global community represented by Google of such a huge country as China, with its 1.3 billion people and its growing economy, is obviously a step back for those who see the flow of information as intrinsic to the development of international economic, political and social relations.

If allegations of hacking into Google and other companies prove accurate, there is an equally evident danger to world communications, raising the fear that emails are more vulnerable than we realized. One doesn’t have to be a member of the Google appreciation society to judge that the company has applied its technical wizardry with due discretion and regard for privacy. But if its codes, and those of other web services, are penetrated by less scrupulous cyber-operators, the danger is obvious, and Chinese users of Gmail may well have second thoughts about the security of their messages.

If allegations of hacking into Google and other companies prove accurate, there is an equally evident danger to world communications.

Beyond that lies the broader issue of how Western companies engage with an increasingly self-confident China dealing with high technology. The era of foreign firms exploiting the availability of cheap Chinese labor to churn out t-shirts, toys, shoes and a range of low-cost goods is beginning to give way to factories producing more sophisticated goods including IT systems. These more advanced products may still depend on Western technology, but the assembly is done in China and some local staff may have to be trained in applying that technology. 

The poor protection of intellectual property in the People’s Republic can make the spreading of such knowledge dangerous for enterprises that suddenly find themselves facing a Chinese competitor. These are only part of the issues Western firms have to weigh on the IT front. Their operations may be hacked into with little or no recourse. The way in which police seized computer files of the Australian mining company Rio Tinto last year when four employees were arrested on still unspecified charges has raised an additional security concern.

Allowing for the inevitable positive tilt in surveys conducted in an authoritarian state, polls show high degrees of national pride among Chinese.

This all fits in with the generally tougher line Beijing is taking toward the West – evidenced by its refusal to raise the value of its currency or to compromise in the climate change talks in Copenhagen. No notice was taken of appeals from London for clemency for a bi-polar British subject executed in western China last month after heroin was found in his luggage. On his trip to China in November, President Obama was given minimum exposure for his ‘town hall’ meeting in Shanghai and packed off on a tourist trip to the Great Wall on his last day.

China has good reason to feel increasingly self-confident: the market-led reform launched three decades ago transformed the nation and the world – the ups and downs notwithstanding – while the Communist party managed to maintain its monopoly on political power. More recently, the massive monetary and fiscal stimulus package launched in November, 2008, has restored growth – though it may prove more difficult to sustain in the second half of this year. Last week China overtook Germany as the world’s largest manufacturing exporter, and the US in automobile sales. Forecasts that the mainland will surpass the United States economically within 15 to 20 years bolster a confidence heightened by the Beijing Olympics and the forthcoming World Expo in Shanghai.

Allowing for the inevitable positive tilt in surveys conducted in an authoritarian state – and despite tens of thousands of local one-issue protests each year – polls show high degrees of national pride among Chinese. Far from agitating for democracy, as some Western China-watchers expected, the new middle class has been co-opted into the system. The transition to the next generation of leaders due in 2012 appears to have been sorted out.

China is in no mood to take lessons from anybody, be it Google management, the Treasury department in Washington or human rights campaigners.

All of which means that China is in no mood to take lessons from anybody, be it Google management, the Treasury department in Washington or human rights campaigners. Though Yahoo, which has its own problems with its Chinese partner, has sided with Google, most other American tech firms operating in the People’s Republic China have distanced themselves from the Mountain View company. China faces no united corporate front and, on past performance, will be adept at playing on the divisions among the foreigners. Besides, the People’s Republic has become such an integral part of the global fabric in the past 30 years that divorce should be on nobody’s cards.

Rather, the prospect for this year must be a steady increase in mutual aggravation, with the immediate question of whether the Obama administration will hold Beijing responsible for the recent hacking. Moral outrage, ethical concerns about human rights and environmental blame placed on Beijing will reinforce a rise in calls for protectionism to hit back at China’s currency undervaluation that has gained a new recruit in Paul Krugman, the Nobel Prize winning economist and New York Times columnist.

The campaign for the mid-term elections in the United States will offer a tempting theater for a switch from bashing bankers to lambasting China as politicians point an accusing finger at the East and intone ‘We’re not going to take it anymore.’ If this happens, the Google case will have been a marker along the way, but it is far from being alone. The multiple points of conflict and the global importance of the main players are such that relations between the People’s Republic and the West may be as important as any other international issue this year.
 

Jonathan Fenby is author of the Penguin History of Modern China and China Director at the research service, Trusted Sources.

Rights:Copyright © 2010 Yale Center for the Study of Globalization

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