Google and China

China is feeling on top of the world these days.  Peoples Daily recently ran an article with the headline “Collective Decision-making Eclipses Rowdy Democracy.”  It is not hard to guess to whom “rowdy democracy” refers.  There is more to this than China’s own growth.  It is the perception of European and Russian senility and American incompetence - another article is entitled, “US Arrogance Replaced by Strategic Contraction.” 

Now this may be a misperception by China, if we are lucky, but you can see how people could come to that conclusion, after the ineptitude in Iraq, the self-inflicted damage to the economy in 2007, and a host of other problems that the U.S. seems unable to fix.  Cybersecurity is one such problem.  We have been struggling for more than a decade without much progress on how to make networks more secure. 

China has been a beneficiary of American indecision on cybersecurity.  Chinese attitudes towards intellectual property are slowly changing, but they were shaped by a generation of Maoism, and the boundaries between private and communal property are porous and opaque.  There is a belief that the West owes them for a century of imperialism.  These attitudes are reinforced by official policies that make extracting technology form Western companies, licitly or illicitly, part of the price for letting them into China.  Theft of intellectual property over computer networks, a form of economic espionage, is one of the unheralded hallmarks of the U.S.-China relationship.

Until recently, the U.S. did little or nothing to stop this, or even to complain.  The excellent speech by Secretary Clinton a few weeks ago was the first time a senior U.S. official raised these issues.  If there are no penalties to helping yourself and you feel somewhat justified to begin with, why would you stop?  Many companies have been hacked and either don’t know or won’t admit it.  So imagine the surprise in China when Google went public.

Google’s initial reaction appeared emotional.  The company had a cooperative relationship with the Chinese government.  The Chinese turn around and steal their intellectual property (probably passed to Baidu) along with the intellectual property of thirty other American companies.  Google executives may have felt betrayed, and they may have always felt some discomfort with a deal that ran so contrary to their expressed principles (which the ‘low badge numbers’ at Google, the early employees of the company, actually seem to believe).  In turn, the Chinese were shocked that anyone would call them on misbehavior in cyberspace.  The Chinese believe their domestic market is so big and growing so fast that foreign companies have not choice but to pander to them.  Google is one of the first (and the first publicly) to push back.  

This is not a one-sided affray.  As big as China’s market is, it is still not as big as the global market.  Google’s action may hurt its position in China, but it may help it in the rest of the world.  Who would ever pick Baidu over Google if they had a choice?  There is also a degree of embarrassment for China, and they must take the views of their “netizens,” who are sympathetic to Google and have some political influence, into account.  None of this will change the outcome – China could not back down on net filtering for Google or every other company that currently cooperates would ask for the same treatment.  Chinese web companies could not compete if they still had to filter and Google did not.  But it points to larger problem for an emerging China.  When China engages with the world, it wants it to be on its own terms, but this runs the risk of cutting China off from legitimate sources of information, innovation and economic growth.

The most likely response now that Google has pulled back is that China will try to whip up public sentiment against Google.  We are already seeing this in the government-controlled media.  If this works, China will come down harder on Google.  If public sentiment is not aroused, the Chinese will accept the move to Hong Kong and look for other ways to punish Google’s remaining business in China and to constrain access to the dot.hk website.  They will also track the numbers.  If too many Chinese users follow Google to Hong Kong, the Chinese will look to constrict access.  One major change is that before, Google did the filtering for them; now, they have to do it themselves.  It is a serious loss.

We do not want to go all Huntingtonesque and talk about a clash of civilizations, but early hopes that China would somehow evolve into a democracy, as it moved down the path of a market economy now seem mistaken.  Our foreign policy since the Cold War has been to believe in the inevitable spread of democracy as if this was something that would occur spontaneously and naturally.  This is not going to happen.  The Party has no intention of surrendering power and the apparent military and economic failures of Western-style democracy have only reinforced this determination.  Google’s deal with China to filter in exchange for access was only a reflection of the larger Western deal to accept China’s authoritarian politics in exchange for entry into the market.  This should, however, not become carte blanche for China to ignore global rules for trade or finance when they are not in its interest. 

So this needs to become a three-way dance – Google, China and the U.S government.  The U.S. needs to hold China accountable, publicly or privately, for its future treatment of Google.  The bilateral relationship is symbiotic but it needs the occasional adjustment to remain fair.  If China looks for non-tariff barriers to hamper Google, the U.S. needs to react.  Above all, the U.S. needs to remind people why western values are preferable to those of authoritarian regimes.

This goes beyond China and Google.  Our mumchance silence on bad behavior (until the Clinton speech) in cyberspace encourages other countries to envision moving to networks that are fractured, closed, and government-controlled, that are open for business but not for speech.  There is no need to provoke conflict with countries like China, but there is a strong need to defend the institutions and ideals – open markets, far treatment in trade, free speech – on which cyberspace was built and which now face serious challenge.