The Google-versus-China situation has devolved so far that it’s gone straight past politics and into cheap soap opera.
When Google (Nasdaq: GOOG) complained about the attacks against it, which allegedly originated in China, the Chinese government’s response was, “Like it or leave.”
Now that Google is looking at doing just that, the Chinese government’s response has changed to, “Oh no you don’t!”
Business Weekquotes a Chinese government spokesman as saying that even though Google is leaving, it must still abide by the rules it agreed to when it entered China.
I don’t know what to make of that. On the one hand, sure, if Google agreed to rules, they should abide by them for as long as it takes them to get out -- but think about this: The world’s No. 1 search engine, one of its premier technology incubators, a company that has expertly positioned itself at the nexus of all the data flows, is looking at leaving China outright... and the government is scolding them as they walk to the exit?
In soap operas, cheap theatrics lead audiences to change the channel. When it comes from a major world government, trade and investment decide to do business elsewhere.
The risks to both sides are enormous. Cutting off trade with China means U.S. businesses will be writing off the world’s largest emerging market. This is not a good move at the best of times, and even worse during economic doldrums.
On China’s side, cutting off trade with Google is just as disastrous. China has been a leader in manufacturing for years, and now they want to be a leader in scientific and technological development. At the same time, they’re driving away their best ally in achieving their goals. At Nanjing Agricultural University, an ecology professor has said that “research without Google would be like life without electricity.” Over three-quarters of surveyed Chinese academics reported that Google was their primary search tool.
As bad as the situation with Google is, the larger context is even worse. It used to be that a couple of researchers having beers together would discover their research dovetailed nicely. Nowadays, we read each other’s Facebook updates and LiveJournal pages, and so forth. Sometimes serendipity will strike and we’ll think, “Hmm, this person should really meet this other person.” Social networking is increasingly turning into the lifeblood of research and development -- unless you’re in China, where you can’t hit Facebook (Nasdaq: FB)
, can’t follow Twitter Inc. , and soon won’t be able to follow the buzz.
China is at a crossroads. It can choose totalitarian control of information and economic espionage against its competitors -- or it can choose the other path, the path of free communications and fair play on the networks. Or, at least, that’s what we’d like to think.
Keep in mind that we’re talking about a country that sees no contradiction in being both firmly Communist and at the same time encouraging a free market. Given that they’ve already juggled that paradox, the Chinese government might consider this to be just one more strangeness to navigate.
I’m halfway through Kissinger’s Diplomacy, and so far it’s been no help at all in understanding this. Of all the revolutions the Internet is bringing, the international diplomatic revolution is by far the most confusing to me.
— Robert J. Hansen, freelance hacker and computer science doctoral student at the University of Iowa
Robert, May be that's a devil's advocate is speaking but...
first of all, it is possible to hit facebook or follow twitter in China- it is more complicated than in Europe or the States, but it is still possible. And, I do not believe that china will be in big troubles without Google.For example, there are only 10 foreign movies a year are allowed to be demonstrated in China. Do you think they live without entertainment& No, there are a lot of great Chinese movies of any genre.Chinese do not watch American movies, they screen their own. So may be, instead of struggling without Google, they will create something authentic again.Baidu is very popular by the way.And may be Google will lose much more from leaving a Chinese market as many Hollywood companies lose millions of dollars. and China will get another search engine that with a time may become a competitor to Google, which is possible if we consider the amount of population that speak Chinese.
You're right - Google isn't the dominant search engine in China anyway, so any money they make there is a drop in the bucket compared to the rest of the world where it IS dominant. In fact Google is unlikely to lose any ad revenue from China in the long run because Chinese companies will still need to buy search ads from Google to advertise to users outside of China.
The worlds "biggest" market that hasn't been exactly a gold mine for Google to date. You don't miss what you don't know.
China too has many emerging sectors/manufacturers that are much smaller fish then their big ones(notable). Those smaller fish ripe for the picking for even better pricing on production costs won't have a chance across the world OUTSIDE of China if Google pulls out. I'm not savvy on China's economic framework in regards to COMPETITION within its own borders, but in my opinion, China will lose out on ubiquity. This will allow other emerging markets(nations) to step in and replicate what China's bottom of the barrel companies do.
At the end, China and Google will strike a balance at the least for diplomatic relations between the two nations. The implications are far greater and deeper than what most can perhaps fathom.
I enjoyed this very much. Th isuue is very much like a soap. One spoiled actress throwing a tantrum at the upstart starlet, and the viewers choosing up sides as the battle ensues. Everyone discussing who has the most to loose if the contestants don't make nice and play together. "SEARCH FOR ALL MY CHILDREN."
But I feel you glossed over a very important point, that China has embraced both Communism and Free Trade. Just because China allows foreign enterprises to come in and exploit the slave labor at pennies per day, I wouldn't call that an embrace. More like a bear hug.
I believe China's medical knowledge has much to give the rest of the world. They actually discovered a cure for a very deadly form of leukemia. It saved my life. But what price was paid by their people to come up with this miracle? I'm no altruist. But I can't help but wonder at the research process that was used to determine that leukemia is caused by a transposition of a few chromosomes and how they determined that Retinoic acid would untangle the mess. Who volunteered for this double blind study?
It is much like sausage. Everyone likes it until they see how it's made. Both sides have much to gain and loose in this battle. But my heart is split on this oner.
Of course, if Google leaves China, it will lose some important profits. In the other hand, Chinese's people will lose a lot of benefits especially in education and researches.
I have some unanswered questions: Is Chinese's government doing politic to renegotiate Google's presence in China after Google's server attack? Or do they want Google to leave definitively the country? Who might be the biggest loser If that happens?
While your observations are well taken, there is an 800 pound gorilla in the room that China can consistently hid behind. They can plausibly deny that they had any knowledge of the hacking and that it was done by amatuers (Oh wait! They DID do that.)
Gen. Habiger did an excellent paper on the problems associated with cyberwarfare and pays significant attention to the problem of concretely identifying both intent and government sponsorship.
The very unique aspect of this in a closed society like China, is that we are totally reliant upon their say so about who the culprits are. And, if they deecied to arrest a couple of people they don't like, frame them, shoot them, or put them in a reformation camp for 20 years, who are we to argue?
It is a HUGE problem that takes away all of those wonderful precepts that we have built the security (sic) of our country upon for 50 years, MAD, first strikes, retaliations, the old paradigms just don't work.
It's interesting that comment spam and other problems often seem to have originated in China. Perhaps if they could go to useful destinations like google they wouldn't spend so much time wasting ours.
It's tough to know whether this situation could have been avoided. I don't think so. Google could have chosen to turn a blind eye, but eventually there would have been a confrontation of some sort between the Chinese government's policies and a big Western Web presence.
It's a conundrum, but one that could ultimately hurt China more than Google. China may be the world's biggest Internet market in terms of sheer network size and number of users, but that market really is limited by the constraints put on it by government censorship and business control.
I'll put my bet on Google coming out of this better than China's users.
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