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Google in China: Recent developments

I thought I’d give the Google-China news hours to pass from Thursday’s developments before I typed my thoughts.

My initial ones: The dramatic twists continue, the rhetoric fascinates and with everything in life, it’s best to remember that what you think might be the core of the debate, the center of the action could just be a diversion to the main attraction.

Or it really could be the center.

We also know that much face has been lost in this brouhaha. By the way, senior Chinese leaders don’t like to lose face – that’s why closed-door meetings with them are preferred.

Given that Google brought its charges – that Gmail accounts were hacked and intellectual property was stolen – so publicly how will Google and the Chinese government save face?

While articles in the Chinese press have talked about hopefully keeping Google’s charge – which followed a threat of a market exit – a corporate matter, it’s been elevated to a government one with Secretary of State Hillary Clinton’s speech Thursday about Internet freedom.

On the same day, Google chief executive Eric Schmidt talked with financial analysts, confirmed the Internet company is talking with Chinese government officials and that the business is “quite committed” to the China market, according to U.S. media reports.

Huh?

Dow Jones Newswires moved these quotes in this story:

We wish to remain in China. We like the Chinese people and our Chinese employees. We like the business opportunities there and we’d like to do that on somewhat different terms than we have, but we remain quite committed to being there….We continue to follow their laws, we continue to offer censored results, but at a reasonably short time from now we will be making some changes there.

So changes are afoot with some of Google’s operations in China.

If those changes, though, involve removing filters from content on Google.cn, then conceivably the company would no longer be following China’s laws – which would continue to upset Chinese senior leaders.

So, it would become moot whether or not Google’s executives like the Chinese people and its employees in the country.

But his words were a bit more nuanced – which can been seen in a way of tamping down the tensions as talks in China are underway - than last week’s message, which was much more direct, from the Mountain View, Calif. company.

Yet, on the same day, Secretary of State Hillary Clinton gave a speech on Internet freedom which likely pumped up tensions.

Add that to the digital stew (or delicious Mongolian hot pot full of technology, history and U.S.-China relations, if you like).

The words she employed, as quoted in this New York Times article, were direct and she skipped diplomatic politeness and named China directly (Note to younger generation: It’s kind of like a shout out but the words are much more pointed and might not be interpreted as nice):

a new information curtain is descending across much of the world.

Those words weren’t just a theoretical idea for academia.

She included China in her remarks and, as the Times wrote:

She also praised American companies such as Google that are ‘making the issue of Internet and information freedom a greater consideration in their business decisions.’

In a way, Google is in a tight spot, as I’m sure many already realize.

If Internet freedom, this intellectual property theft and the hacked Gmail accounts are key issues for the company, then senior executives could just announce that they will leave China on a certain date – which as I type this, they have not.

But China’s Internet market of 384 million people – which saw online spending grow by $11 billion in 2009 – remains an alluring market, even if you don’t have that much of that market share (yet).

Talk about a conundrum.

As you might imagine, the Chinese media, including this China Daily article, were filled with reactions to Clinton’s speech.

From The Global Times, which earlier had a gentler, diplomatic tone, came this:

The hard fact that Clinton has failed to highlight in her speech is that bulk of the information flowing from the US and other Western countries is loaded with aggressive rhetoric against those countries that do not follow their lead. In contrast, in the global information order, countries that are disadvantaged could not produce the massive flow of information required, and could never rival the Western countries in terms of information control and dissemination.

I like how this statement uses the phrase “global information order” which is similar to the “new world order” thinking prevalent in the United States years ago.

I should say that I have never underestimated Chinese leaders, especially after the Communist Party ascended to power in 1949 and the era of a New China started.

I have questioned many episodes in China’s history. But Chinese leaders since 1949 have helped bring many people in that country out of poverty, improved overall health conditions and made strides in education.

Its economic development in recent years is truly seismic – I don’t think the world will ever be the same. This year, China is expected to become the world’s second largest economy.

Given the rapid clip at which China is growing – which I think is good because I’ve met ordinary people in China who do need higher incomes – I question whether the adjective “disadvantaged” applies to China in producing information and its roaring Internet market.  

Yes, a free flow of information does mean that criticism can be tolerated. You always can refute that criticism.

If you believe that there is no criticism in China’s Internet, visit chat rooms and bulletin boards and you’ll see thoughts from commentators – many of whom question and criticize the U.S. government.

The Global Times article also discussed a poll of Chinese people, who reportedly opposed by a large margin of 81 percent Google’s demand for an unfiltered Web site.

From that story:

It is not because the people of China do not want free flow of information or unlimited access to Internet, as in the West. It is just because they recognize the situation that their country is forced to face.

So what situation is China, as a country, forced to face on a regular or historic basis?

Try stability, sovereignty, the loss of power and influence. Territorial integrity, as professors who study China like to say, remains a top priority.

I am not justifying anything that the Chinese government has done in the past.

But many people in China recall the days when other countries occupied their land, when internal disputes sprouted from roving bands of people who spread their ideas, when relationships with other countries – including the United States – depended on realism and power.

Many in the Chinese government remember Mikhail Gorbachev, the former leader of the Soviet Union.

In 1989, he became the executive president of the Soviet Union and he ushered in an era of openness. In 1991, he resigned as general secretary of the Communist Party and president. The Soviet Union dissolved that year.

This is not lost on senior Chinese leaders, as evidenced in a recent People’s Daily article, which talks about the People’s Republic of China opening up to the world in recent years:

At that time, even in China, some people raised doubts about the Chinese government’s choice. However, when looking back, we now can find that the government’s choice is correct. In contrast, Gorbachev was once widely praised by the west and his political reform even won much admiration in China. But, it was Gorbachev that finally ruined the Soviet Union. Therefore, China must not follow the western world’s practice on crucial issues such as Internet control and supervision. Of course, China is progressing and its Internet industry should advance accordingly. 

And at the risk of overusing that famous phrase from the Chinese classic, The Three Kingdoms:

Here begins our tale. The empire, long divided, must unite; long united, must divide. Thus it has ever been.

As I’ve said before: All the issues that Chinese government leaders and Western businesses operating in China wanted to keep separate have been thrown together – striking some tender nerves.

What I haven’t heard at least publicly is whether Chinese law enforcement officials have been able to track down leads on who might have actually hacked those Gmail accounts of people critical of the government and took Google’s intellectual property.

In Crime Reporting 101, as we know, there are always the questions of motive and the clues to solve the case.

I’m certain if the reverse occurred – a large Chinese Internet company with a big reputation and operations in the United States had been hacked – senior Chinese government leaders in Beijing and Washington, D.C. would be asking for answers from their U.S. counterparts.

Why?

Well, someone broke the law.

UPDATE: James McGregor’s essay in Time is worth reading. McGregor is a former journalist who is a public relations executive with decades of experience in China.

There is no doubt that tensions exist, especially as the Chinese economy rises. I recall the days when Western businesspeople often defended their involvement in the China market, especially when human rights and democracy activists raised questions.

McGregor noted disillusionment among Western businesspeople and a creeping arrogance of the new elite businesspeople and government officials in China.

As a former chairman of the American Chamber of Commerce in China, McGregor used sharp words in his essay:

But more than a few foreign business leaders are asking themselves if they have been bamboozled by the system. Multinationals have been solid citizens in China, handing over heaps of capital, technology, training, source code, best practices and proprietary products to joint-venture partners they were forced into bed with….now that the China market matters more to them, it appears that China couldn’t care less. Increasingly difficult China-market access is the immediate worry. But many are looking ahead and losing sleep over expectations that their onetime partners are morphing into predators.

This, of course, is more evidence that the context of “friendship” – so prevalent in China during the 1990s – is eroding.

As I’ve noted before, recall how Liu Bei gained all those arrows from Cao Cao in the classic, The Three Kingdoms.

In history, I don’t think that arrogance has served anyone well – no matter your citizenship.

UPDATE 2: Here’s another story from The New York Times, talking about how high the Google-China issue is becoming, especially with the State Department.

Google is no doubt huge. But this issue could turn out to be larger than the Internet giant.