rss feedA little here, a little there: More on Google’s decision to stop censoring Google.cn
I’ve been trying to get my mind around Monday’s announcement from Google that it would shift its servers from mainland China and to Hong Kong - a move which it viewed as legal but would let them run a non-censored Google.cn site.
That site, as we all know by now, would redirect users to Google.com.hk.
China unleashed a volley of criticism and the fallout and analysis quickly took place.
At the risk of tossing out a simplistic answer to a complicated issue touching free speech, sovereignty in a country that has seen uprisings, instability and occupation and increasingly complex U.S.-China relations, there is the thought that revolves around a simple phrase that people in Washington, D.C. are all too familiar:
To get along, you go along.
If you’re a business and inclined to make a political point in China – a place in which its senior leaders want to maintain authority at all costs – it’s best to put your shingle out elsewhere.
From the view of a human rights activist or free speech defender, that thinking is, undoubtedly, hard to accept.
But multinational companies, wherever they operate, do need to follow the laws of their host countries. I suppose that’s true even if senior leaders of the host country don’t always follow the law.
And traditional corporate responsibilities are tied to shareholders, employees and customers. Governments and their leaders set policy and engage in foreign policy.
That theme emerged in this conversationon CNBC, which featured Jack Welch, the former chief executive of General Electric.
It’s one interview that I found to be lively about the Google and China topic because you have a capitalist with decades of experience trying to come to terms with an ethical question regarding free speech and the flow of information.
It was a sobering one – and a peek inside business realism when you deal with a country, such as China, that has a remarkable economic market – including 384 million Internet users and online spending soaring $11 billion last year – but rules that you might find distasteful in your home country.
The talk looked at down the road in the time frame of the next 10 years or so.
Welch was explaining the difference between corporate decisions and government policies, when CNBC anchor Becky Quick noted that the Chinese government prompted Google’s reactions with its suspected hacking of Gmail accounts and stealing of code:
Said Welch:
Google has a right to do anything. Google has a right to be an agent of the U.S. government…and act as the U.S. government would want them to act at this terrible Chinese behavior. But Chinese behavior is Chinese behavior. It’s the way they act. It’s the way they control that society.
CNBC anchor Carl Quintinalla jumped in to say that if a company is unhappy with that style of government, a corporation can leave the Chinese market. Welch agreed and talked about a corporation’s responsibility to its shareholders, employees and customers.
Then, Welch considered the Google-China row in the long view and corporate flexibility:
What does it mean in 20 years? I don’t know….Let’s go back to a company’s responsibilities: Employees, customers and shareholders. They don’t carry out government policies. They’re told by their government what to do: ‘You can’t ship to Iran.’
A third CNBC anchor, Joe Kernen, interjected:
I can see what you’re saying. For shareowners, and for customers and for everybody else, they might just suck it up and go ahead and go along with what China wants them to do because how big it can be in 20 years.
Later, Welch gave a realist’s view in this hard ball game with a nuance:
I don’t see how China can let Google win….Google may have a strong hand than people think.
Welch also turned the table and asked Kernen what he thinks China will do to Google. There was some discussion and Kernen noted:
I’m saying it’s impossible for Google to change China.
Welch continued to talk about if he ran a multinational company that was selling hardware, such as engines, there wouldn’t be much reason to pause:
If I was selling turbines, jet engines, medical equipment, I’d be in there just as we were 20 years ago, driving like hell. And living with all the punitive stuff they do to you. They do terrible things to you. They make life difficult. And when they get their own supplier with the same quality, you’re dead.
Kernen talked about an evil society and the price of business in a market economy:
As a businessperson, you do what you have to do. It’s not immoral but businesses have to be driven by something other than I guess…But there are times, I hate to use the word ‘whore’ but businesses have to ‘whore’ themselves certain times to stay in the money. And to stay in the marketplace, you have to look the other way in a distasteful situation.
Welch:
You’re playing in somebody else’s rules in somebody else’s playpen. And you want to make it the rules your rules. That doesn’t always go. China, they’re not making this rule up as a surprise.
Wow.
At least, if anything, it was a frank discussion which talked about the realities – and costs – of doing business in China.
As I wrote in January, there is ample reason for Chinese leaders to stress political stability at almost all costs – even if they let the economy, in some cases, roar and let activities unfold as if a new Wild West had been born.
The issue here, of course, is that Google is no ordinary corporation in the global marketplace.
Before it entered the China market, its founders and senior leadership debated the merits of its corporate philosophy of doing no evil and how, yes, Chinese leaders operate.
As this recent case illustrated, Google – in a sense – became somewhat of a “nail house”- a description used in China for people who don’t want to leave their houses but are forced out by government or business officials, sometimes with force.
The catch is that while you can subscribe to lofty, ethical principles at your home office, when you open your shingle in a different country with dramatically different rules shaped by an unstable past, you do lose control of some of your guiding principles in exchange for money, customers, market share and brand recognition.
So, which one do you want?
And how badly do you want that market share for your corporate leadership and shareholders?
Or as some in China say, do you keep one eye open and one eye closed?
Meaning: You acknowledge what you like and what is politically safe to accept and ignore what is bad, corrupt or threatening.
Kernen described the same idea but with different words.
It’s no wonder that so many middle class Chinese citizens have found a path to economic success by sticking only to education, career and economic goods.
In The New York Times, reporter David Barboza quotedXiao Qiang, a China Internet researcher at the University of California at Berkeley, putting it another way:
Internet companies in China have to work so closely with the government. And that means the government’s political agenda can become the company’s business agenda.
But whether it’s impossible for a government to change, as discussed in that CNBC interview, strikes me as a bit fatal.
That never seemed to be the attitude of U.S. capitalists in world history – at least going into a project.
Yes, operating in the People’s Republic of China is nearly a completely different context.
But keep in mind that China has changed – dramatically since the late 1980s – especially with architecture, ownership and global events.
The late paramount leader, Deng Xiaoping, ushered in a new era of pragmatic economic policies.
I recognize that soft power is what senior Chinese leaders are talking about now – that the country’s rise can be done without being seen as a global threat to developed countries, such as the United States.
The question becomes whether that change will ever include the inclusion of greater free expression and the distribution of criticism aimed at the central government.
As I said when all of this surfaced:
The Chinese government also dislikes others touching their political affairs….They’ve used power in a very real way and are willing to interfere when they want.
Business is business. Internal politics is a matter for the leadership in Beijing.
The most fascinating part of this is which group will truly win in the long run – Government leaders in Beijing or those who have a deep faith in the power of the Internet and all the information that flows.
Eventually, as history has shown us, people in the world are smart enough to get around restrictions.
For now, Google has left some of its operations in China, including staff to work on entertainment.
And what you have today might not be yours tomorrow.
