Wednesday, January 20, 2010

Google and China

Google has attracted a lot of positive attention in the United States because it has "stood up" to the Chinese government and refused to submit to censorship any longer. The operative words are "any longer", and the company took this stance allegedly because of Chinese attempts to hack into gmail accounts of known dissidents. The fact that they have now told the Chinese censor to stick it is quite worthy of applause. However this beacon of free speech - along with that other champion of open society Yahoo - had no problem putting in the necessary filters, sometimes going out of the way to satisfy the Chinese authorities. Indians would recall that Google Maps of the Indian North East show the state of Arunachal Pradesh as being an Indian state in the worldwide edition, but non-existent and a part of China in the Chinese version.

So why this newly found sense of morality and values? I look for some clues.

First, Google intends to position its online applications and connectivity as a real alternative to the desktop. Gmail is no longer a beta application from Google, it is a mainline offering that has found acceptability with businesses as well. The use of its online applications seems to be growing as broadband penetration grows. If ever there was a time to resist any attempt to intrude on this world and cause customers to lose confidence, this was it. Imagine if the emails or documents of any of the niche companies in England's Silicon Valley (near Cambridge) were to be compromised by a hacker, particularly when a lot of these companies do a lot of secret work for the MoD.

Second, there is now a groundswell of opinion that China profits from the West but behaves as a predatory mercantilist, and not as a part of the evolving consensus. The Chinese approach to most things is to remind the world of Napoleon's aphorism of the sleeping giant, and to tell the world to conform or else. I will not go into recent events relating to Copenhagen, or the propping up of abhorrent regimes in the Third World in exchange for resources. The young people who run Google are aware of this, and know that to stand up to China is good press. Obviously they have done the math and know that Baidu will continue to grow even as the internet develops a strong Putonghua presence. This is the time to earn a few brownie points.

Third, I believe that the internet is developing away from the principles that informed its inception in the free-spirited University system in the United States. Google and indeed the West is losing the battle to preserve the internet as it was. I believe nothing stiffens the back as much as having a few billion bucks($30bn in near-cash securities, to be precise) jingling in your pockets. It is called FU Money. Google has it in spades, and this would have convinced them that they have nothing to lose.

I am of the opinion that Google may pull out of China, but Chinese firms will continue to advertise in the now-free Google, adding to their already substantial search revenues. I do not believe the Chinese wil block Google. And if someone googles Tiananmen from Beijing and find instead a stirring rendition of "The East is Red" coming at them, I would advise them to enjoy the music.

6 comments:

Ramesh said...

Nice analysis. Very valid considerations and a few more to add. Over the last few months, Google has started to be intermittently blocked. Of course its properties like Youtube and Blogger are completely blocked. But even the main search engine was being blocked (not just censored). It was incredibly difficult to use Google from here. Sergey Brin was always uncomfortable with the censorship in the first place, but earlier the censorship was mostly either porn or not returning a banned site like Wikipedia. The politcal censorship is more recent. The E Mail hacking was real - this is the clumsy overbearing China acting ridiculously , as opposed to the confident China acting sensibly as they do in some other places. I was actually expecting some sort of reaction like this as China was overstepping the line in dealing with google (they do something like this in the battle on iron ore with Australian mining companies as well). Google may not pull out and China will desist from blocking Google is the final outcome I think.

Ravi Rajagopalan said...

Ramesh, the hacking was not new. Those of us in the IT business knew this was taking place. However the timing of the move - or any move - interests me. The larger issue is that of how the world needs to react to China. Krugman recently recommended protectionist action against China even though, as a free-trader he has to hold his nose when advising this course of action. Thanks for reading the blog buddy.

Sandhya Sriram said...

the chinese dragon has always two faces. whether it is their stand on encroaching north east india, or supporting pakistan terrorist efforts in India, or maintain a stoic silence on climate change - a very double standard diplomacy. its a difficult country to understand

Ravi Rajagopalan said...

Hi Sandhya, thanks for visiting and leaving a comment, and for persisting in your support by highlighting the problem with the blog settings.

Re Climate Change - I have my doubts about the science behind it.

Adesh Sidhu said...

Nice analysis. After reading this news my first reaction was whether this is bravery or stupidity. Later I concluded some of things which you can look at from both angles.
BTW I am coming from Ramesh's blog...hope to read few more gems of yours....

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