Googling in China-BECKER

Posner has a very good discussion of many aspects of the controversy over the concessions to the Chinese government by Google, Yahoo, and a few other high-tech companies. I generally will come to similar conclusions but from a little different perspective. I do believe that it is reprehensible for Yahoo to disclose the names of Chinese citizens using its services, particularly when the information Yahoo gave about one of them led to his arrest and imprisonment. Whatever one’s beliefs about other rules of corporate behavior in China, disclosure of names of "dissidents" who face arrest and punishment is unacceptable. During the remainder of my comment I will pretend that I am the CEO of Google (alas, I am slightly less rich) to discuss whether Google should accede to the demands by the Chinese government to prevent access to Google users in China to websites on democracy, the Tiananman Square uprising in 1989, the Falun Gong sect, and a few other subjects. Presumably, it might be very profitable to make these concessions under the very likely assumption that the government would not agree to any significant compromise. However, profits in the Chinese market are not the only consideration, even from the viewpoint of maximizing Google's (and mine as CEO) market value. Google has a deserved reputation as a very independent as well as innovative company that does not cave in to unreasonable government demands. From our vantage point the Chinese government's demands are not reasonable. For this reason we did indicate on our website in China that we were excluding certain enumerated subjects from our search engine. That said, under present conditions we are still providing millions of people in China, we hope that will climb to hundreds of millions, access to an unbelievable array of information. The subjects covered are far too numerous to enumerate, but let me just mention information about DNA and its discovery, medical treatments for breast and prostate cancers, the determination of prices under different market conditions, riots in the U.S. and elsewhere, the Becker-Posner blog, and many more. Chinese Google users also have access to information that is highly informative about democratic institutions and processes. This includes discussions of elections in Japan, Great Britain, the U.S., the turnover of parties in power in democracies, histories of countries that were transformed slowly, like Great Britain, or rapidly, like Japan, from powerful monarchies to lively democracies. They also have some access to information on the overthrow of communism in East Germany, Poland, and the USSR, although that information is not as openly available as I would like. In this way Google is still exposing millions of Chinese to information and knowledge that was unavailable to any one in the West even a decade ago. Isn't this a priceless contribution to the welfare of the Chinese people, despite the restrictions placed on their access to certain subjects from using Google? Suppose we at Google had refused to go along with the Chinese demands and were excluded from the Chinese market. It is very possible that our place would have been taken either by European or Japanese companies, or indigenous Chinese companies, only too willing to comply with the government's demands. In this case, American stockholders, workers, and taxpayers would be (a little) worse off, and the Chinese people would also be also worse off since these other companies are not as good as Google. The only gainer, aside from the company taking our place, would be the Chinese government since they would have a more docile search engine company to deal with. A different scenario is that the Chinese people would have been deprived of a search engine for years. Perhaps that would slightly weaken the government because of increased resentment among the population, but it would hurt the typical Chinese computer user much more. Why should we be the instrument of making the Chinese people suffer any more than they already have during the past many centuries from isolation from Western technology and knowledge? Let us also not forget that not only has the Chinese economy been expanding for the past quarter century at a remarkable rate, but so too have freedom of expression, travel abroad, and some other freedoms that are important parts of the foundation of a true democracy. The Chinese government supports strongly the economic progress, yet bemoans the increased freedom that naturally accompanies this progress. Government controls over these freedoms cannot keep up with their pace of development as the economy charges forward. Software is rapidly developing that would enable Chinese users of the internet to bypass their censors, and gain access to the information that they prevent us, Yahoo, and other companies from directly providing them. Chinese censors and other Chinese restrictions on basic freedoms are engaged in a losing battle as long as the economy, including its human capital, continues to go global. Even somewhat limited access to the vast information made possible by Google further pushes the battle in favor of freedom and against government restrictions. Given these considerations, and admiting our concern as a company with maximizing the wealth of our stockholders and employees, does not the entry of Google into China even under these restrictive terms contribute to the tidal wave of freedom that is overwhelming the Chinese government? I (that is, GSB) agree with the CEO, for I would give an affirmative answer to that question.

Comments

[Arun Khanna]

As long as Google keeps control of the servers by keeping them physically out of China, the argument for limits on information in broader interest of relatively ëfreeí information makes sense. This way, in the future Google retains the option of (presumably) challenging any extra-ordinary demands by Chinese government.
The bottom line is China is too large a market to ignore for Google and similar firms.

[logicnazi]

So over on Posner's post I argued that not enough attention is being paid to the danger of foreign censorship friendly companies rising up if google, yahoo and the like have to give up the Chinese market. In particular I think the chinese would have far fewer freedoms if they end up being servered by a chinese search firm (wholly under china's control) than a US search firm.

Here though I would like to raise the issue that any choice by google, yahoo and etc.. to refuse to bend to local authority, at least a little, might perpetuate the sense that the internet is a US propaganda tool or otherwise suspect. I'm not sure how serious a risk this is but it does seem that this sort of perception might discourage governments from allowing their citizens internet access and ultimately thus restricting their rights.

As I said I'm not sure how compelling this argument is, my real arguments are over on Posner's comments, but it does seem like something to think about.

[Thomas]

Before in China, if I searched for the wrong subject, I would simply receive a timeout error, leaving me to wonder if Google was simply technically deficient, not realizing the deficiency originated with my own government. Now, Google is taking action which makes the Chinese government's paternalism more conspicuous to ordinary citizens.

Searches in China face restriction with or without Google's complicity.

The fact that Google uniquely fought for disclosure of government omissions is a positive.

I think Google has dredged a somewhat noble option out of a series of unpalatable alternatives.

[yunglin]

You, as google CEO, address a really strong argument - chinese people can still access informative about democratic institutions and processes, if and only if they can read english or other foreign languages.

I would like to know, how many chinese people can access internet, and among them how many of them can read and express them well in english?

Also, with the strong control over knowledge, how many chinese people can understand those terminologies we use when we discuss some hard questions?

[yunglin]

You, as google CEO, address a really strong argument - chinese people can still access informative about democratic institutions and processes, if and only if they can read english or other foreign languages.

I would like to know, how many chinese people can access internet, and among them how many of them can read and express them well in english?

Also, with the strong control over knowledge, how many chinese people can understand those terminologies we use when we discuss some hard questions?

[Haris H.]

Excellent discussion...but my question is, why are we singling out search engines? Sure, they deal in information and thus we feel they should be held to a higher standard. But the other industries that trade with China are just as complicit. Walmart allows unions in China but not in the US, and other firms doing business in China are certainly engaging in practices that would be deemed illegal in the US. I don't think the search engines should be held to a different standard. Also, I don't think the moral cost of providing Chinese police with user data is particularly high, since I don't think of China as having very high standards of due process or stringent rules of evidence anyway.

The current uproar shows that Google et al are not legitimizing the Chinese government. Instead, they are raising more questions while at the same time providing more information to the Chinese people. This new trickle of information just might be how major change begins.

[Slav]

I would like to know, how many chinese people can access internet, and among them how many of them can read and express them well in english?

[Timba]

Approximately 10% of the users of the Internet are using the Chinese language. That is about 55 million users. It is second only to English as the language of choice for content.

Source: http://www.glreach.com/globstats/

[Katherine]

Ahem, I know this is inappropriate, but:
I love you, Gary Becker.

[Dan C]

When you do business in another country, you agree to play by their rules. However companies can try to negotiate how they will conform to the rules.

This balance is difficult. The present American public would not tolerate a US company helping Nazi Germany locate Jews - regardless of the potential profit. So why should we help the Chinese government imprison dissidents?

On the other hand, we would not tolerate foreign companies shielding potential terrorists in the United States. But we do deal with a Russia that offers support to Iran.

If I were doing business in China I would do everything I could to avoid becoming an arm of the government. I would tolerate censorship - something almost impossible to do fully in any case.

Next, I would warn Chinese leaders that the abuse of information is a two way street. The government can use the information against dissidents, but your political opponents could gather information against you.

Regretfully, I don't think you could deter the Chinese government through negotiation.

So, if you think that China is headed for democracy, and the current limits placed on your company are minor speed bumps on that journey, do business in the country. If you think your company will be used to derail democracy and create a North Korean style government, stay out.

If your competitors take your place, try to attack them in the marketplace of world opinion. Inform the public of the choices your competitors made, their deal with the devil, and try to place public pressure on them in other markets. Make your competitors pay for taking the deal. Try to get world opinion on your side.

[white]

I am a chinese ,graduated from a good chinese university ten years ago. but till this year could I read your articles smooothly. In chinese,
the control of government never unwrap, from the kidgarten to the university, from the masses to the company. we chinese people are so hunger and expect the world righteous men and force can come to help and salve. when that day comes, we chinese people will cry with full tears.and sun-light emerges again.

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