Over the last few years, ACB has tried a variety of introduction methods. Ranging from the conventional to the downright bizarre. However, as regular readers will tell you, there is one phrase that ACB has used over and over again “you probably don't need to be a China watcher to know …..”.
Sometimes this phrase is used accurately: to introduce a topic that is so hot or so common that the average Westerner will instantly be familiar with it. Sometime it is not so accurate. Introducing something that foreigners should know about, but don't for various reasons (Sadly, often relating to the so-called free press).
In this case, ACB hopes that it is the former.
You probably don't need to be a China watcher to know that there has recently been somewhat of a contratont between US search Giant Google, and the diaspora commonly known as China. But more accurately known as Beijing.
As is often the case, the relationship between information and supposition has been rather one sides, as has the relationship between facts and opinions. Some of which masquerade as the other.
So, for better or for worse, here is ACB's contribution to the confusion. A brief analysis of the topic.
Announcement?On Tuesday 12 January 2010 local time Google released a statement on their blog announcing that the one of it's flagship services “Gmail”: a popular email service, had suffered a sustained attempt to breach its security. The statement declared that the attempted breach had originated from China, and that it appeared to be targeting accounts belonging to Chinese dissidents and those associated with them/ See link for full statement (http://angrychineseblogger.blog-city.com/google_to_pull_out_of_china.htm).
The statement also accused persons unspecified of illegally accessing the Gmail accounts of a number of other dissidents and their associates though subversive means. Namely: log in credentials stolen directly from account holders through phishing scams and malware installed on non Google computers.
Although statements of this nature are not new, or unique to Google - Indeed accusations of so-called cyber espionage/terrorism against China are so old that they have almost become passe - what made the announcement different was that it concluded by saying that Google intended to take a good long look at its relationship with the China, particularly in regards to censorship, and to enter discussions with Beijing with the aim of negotiating the right to run an unfettered service in China, and the closing of Google China in the event that its demands were not met.
After the announcement was made, Google shutter it's Mainland office. Sending many staff home, and blocking the office from accessing a number of key computer systems relating to Google's wider running.
Shortly after Google's statement was released reports began to circulate that Google had lifted some, or all, of the filtering from it's Mainland search engine. Allowing search results to include previously filtered content, including images of the Tiananmen Square Massacre and website relating to the banned FLG spiritual movement.
Some later reports appeared to contradict this. Indicating that the filters may have been restored in whole or in part.
Interestingly, perhaps tellingly, Goolge's public statements did not elaborate on exactly why the US company was choosing to link attempts to breach its email security to censorship Only that it was no longer willing to continue filtering its service at a time that an attempted incursion was made.
In a later interview on CNBC, Drummond, referred to the move as a matter of conscience, but did not elaborate as to whether it was due to ongoing issues, or if Beijing had made fresh censorship demands.
Official Response?Beijing's official response to Google was delivered by by Foreign Ministry Spokesperson Jiang Yu, and stuck rigidly to the standard state line: That China considers the internet to be an important tool, but one that requires some level of state management in order to protect Chinese citizens, and that foreign companies operating in China have to abide by local laws, just as they would in any other country.
This line was backed up by officials in other state departments who similarly carried the state line that regulation was necessary, and that Google had to obey local laws if it wished to operate in local markets..
"China's Internet is entering an important stage of development, confronting both rare opportunities and severe challenges … Internet media must always make nurturing positive, progressive mainstream opinion an important duty."
Wang Chen, the Information Director for the State Council,
For their part, Xinhau, the Mainland's state backed news agency described Google's announcement as a business matter, and called for calm. Urging others not to try to use it as a political tool.
"There is no sense blowing things out of proportion and turning a business issue into a political or diplomatic dispute"
Xinhua, State media group, China
China watchers noted that all of these responses fall within the known parameters of a state response to such an issue in that they typically try to portray the issue as one of Google V regulation: A foreign company coming form an “anything goes” low regulation environment and coming into conflict with China's more managed media environment. As opposed a free speech issue.
Analysis?At present, it is too soon to reach any firm conclusions on where the Google-Beijing confrontation may lead, or even if there will be a confrontation of any substance. What is certain is that a direct confrontation between Google and Beijing can only have one outcome: The closure of Google China. Either voluntarily or by force.
It is also certain that Google is aware of this. A fact which has created a notable level of confusion amongst analysts as to exactly what Google's ultimate agenda is.
One hypothesis put forward by analysts is that Google does not intent to confront Beijing directly, but instead intends to use the threat of a confrontation as a means to “renegotiate” its relationship with China exactly as stated in its press release.
Though it remains unclear what Google could possibly gain in terms of concessions from Beijing. As president shows that Beijing is more likely to push harder than to give ground, due to the fear that giving ground may encourage others to push for further ground to be given, and due to the loss of face that ground given would cause.
With this in mind, some analysts have suggested that Google may have no intention of winning real concessions from Beijing, but may instead be hoping to “go down in a blaze of glory”. Using its Chinese operations to launch a so-called “divine wind” attack on the Chinese government - in a similar fashion to Japanese pilots who purposefully dove their planes into American ships during WWII knowing that they would be killed in the process.
As such, Analyst have suggested that Google may be provoking a confrontation knowing that it it cannot win, and that its Mainland branch will not survive, but that its demise could be put to use in terms of publicity back in the US, where there remains significant anti-China sentiment, and where “standing up to dictators” could buoy domestic support.
China watchers note that many of Google's competitors are as deeply embedded in state censorship in China. Many deeper. Including Yahoos: which has handed over details of dissident to the Mainland government, and Microsoft: which has applied tighter levels of censorship to some of its own services that Google has to their own.
Thus, a confrontation with China could be used by Google as a propaganda tool. Allowing it to shed its Mainland baggage as a collaborator, and to denounce its rivals for their continuing complicity.
Alternatively, it cannot be ruled out that Google may be making a genuine moral stand, and that Google officials have genuinely decided that the fiscal rewards for operating in China's highly restricted (but rapidly expanding) market was not worth the free speech costs.
As for Google's primary official reasons for concern. The attempted intrusions on its Gmail service, it remains unclear how pulling out of China would resolve the issue as such geographic locations and intentional boundaries are not relevant in such attacks, neither is the country of a company's operation. Unless Google plans to ban Mainland users from having Gmail accounts, or intends to provoke Beijing into banning Gmail on the Mainland. Which would resolve the issue by removing likely targets from Google's system.
What does Google Stand to loose?If China were to take on Beijing in a direct confrontation, and were to be blocked in whole or in part the most obvious lose would be financial. Mostly resulting form a lose of advertizing revenue.
According to US based investment bank Piper Jaffray Google, prior to its announcement, 2% of Google's projected global revenue for 2010 was predicted to come from its China operations.
While this is far from a killing blow to Google, it does amount to an estimated $US400 million for 2010. With a pre announcement year on year growth estimate rate of between 17 and 18.5%.
Even if this latest incident proves to be a storm in a teacup Google is likely to see its future growth prospects in China diminished. What form this may take is not clear, but Beijing is more likely to be wary of Google in future, and is less likely to be willing to make concessions when it comes to allowing Google to launch new services in China.
Thus one possible repercussion is that Google is likely to have less control in any future joint ventures. With Beijing insisting that it acts more as a silent partner providing technology and expertises, than as a controlling entity.
The View from Beijing?When viewed from Beijing the current Google-Beijing spat appears to be a one sides affair. A foreign company stating that unless it is given a free pass to ignore local law it will break them.
To Beijing this is the equivalent of a Sony telling Washington that unless it is allowed to distribute graphic child pornography over PSN, Sony would do it anyway, and that it would cut off all US user if Washington attempted to move against it.
While this may seem like an exaggeration, and while many people will certainly blanch at the thought of comparing the right to criticize your government to child pornography, to Beijing the content difference is largely immaterial. Undesirable content is undesirable content, regardless of what it actually contains.
Although Google has expressed a willingness to enter into discuss with Beijing over the issue of censorship, Beijing has repeatedly show itself to be unwilling to enter into such negotiations, or to make exceptions regarding censorship. For this reasons, any confrontation between Beijing and Google is likely to follow a predictable path. Google can comply with domestic law by censoring its service, or Google can leave.
Indeed, based on past case studies, the only issues that Beijing is likely to allow to be put on the negotiation table are 1) how far Google is willing to compromise its principles un order to continue operating in China, and 2) how much humble pie – as Westerners would say – Google is willing to swallow to allow at least some of its services to remain unblocked on the Mainland if it chooses to remove its censorship filtering.
What Does Beijing Stand to Loose?What Beijing stands to loose depends on which side of the fence you are sitting.
From an international perspective, Beijing stands to take a notable public relations hit if it blocks or otherwise censures Google. It will be seen to have supported censorship and moved against freedom of speech, and attention will be drawn back to past controversies of a similar nature.
Much of this hit will be from the general public, but China will also likely see diplomatic repercussions in the form of international rebukes. There is also a certainty that this incident, and any that later arise form it, will be used by anti China factions around the world in efforts to pressure their governments to take a less favorable stance towards China.
Traditionally, Beijing has paid little heed to international public opinion, and has often ignored it completely. In many cases its reaction has been simply to try to prevent domestic audiences from finding out about international opinion by blocking website and news services carrying it.
Domestically, opinions are likely to be mixed. On one hand pro freedom groups have reacted with dismay about Google's potential pull out, fearing that the space left by Google will be filled companies with even tighter censorship regimes. Though they also reacted with dismay at Google's censorship in the first place. With some criticizing Google for propping up Beijing's policy of“What you cannot see does not exist”: a policy under which Beijing has attempted to persuade people that it has an open system, and that the reason that they do not see dissent and differing opinion on a regular basis is that they either do not exist or are in such a minority that they might as well not exist.
There has also been sharp criticism from students, one of Google China's main demographics, who have made extensive use of Google as a research tool. Particularly Google's book and scholarly search services. With students arguing that if they loose Google, then they will also loose access to a vast array of non controversial material - Material whose circulation is actively encouraged by Beijing – or at least access to an easy way to obtain said material. Which is often be considered the same thing in some circles.
Leading some to call for Beijing not to overreact, and to reach a settlement that at least allows Google to maintain its current level of service, with filters intact.
On the other hand, Beijing Google has also received stern criticism from within China for its low levels of regulation. With some voicing that Google should increase its level of censorship for the good of Chinese society, and accusing Google of providing a portal through which young Chinese can access morally degrading material. Much of which is banned in China under laws that have strong public support.
For example, Google's image search engine was recently accused of acting as a distributor of pornography due to its easy of use in searching for porn, and it was found that Google Japan was picking up a notable level of international traffic from Chinese seeking to view adult material that is banned in China.
Google China also often allows access to web sites promoting unhealthy ideas, such as websites that promote eco terrorism, suicide, or which provide information on how to conceal an eating disorder or how to manufacture illegal drugs. China could easily justify a ban on Google to the Mainland population on any one of the above without ever broaching the human rights issues of censorship.
On the economic front Beijing is expected to see little if any direct lose if Google pulls out or is blocked whole-sale.
While Google is arguably one of the largest players on the international internet circuit, and is pretty much the undisputed king of search engines, it has achieved only moderate market penetration in Chinese markets.
Estimates vary, but Google is thought to have captured between 16-18% of China's total market. Compared to the 60% market share held by domestic company Baidu. Although this market share is worth an estimated $US400 million, were Google to exit the market, the vacuum that it left would likely not cause Beijing much discomfort as it would be rapidly filled by domestic companies. As well as by foreign companies willing to censor their services.
Equally, other popular services have made no inroads into the Chinese markets at all. For example, Youtube, which is also owned by Google, has minimal market share on the Mainland, despite it being the world leader in legal video streaming, because it is already banned on the Mainland due to its refusal to comply with local censorship laws.
Many of Google's other service only have a marginal presence in China, and so their loss would not be noticeable.
Many faces of censorship?
China watchers note that while Google has made headlines with the suggestion that it will stand up to Chinese censorship, one question that it has so far failed to answer is whether it intends to carry its new found “conscience” across to markets outside of China.
Although it remains early days, there has been no suggestion from Google itself that it intends to “negotiate” with other countries regarding the removal of censorship filters in their countries.
Similarly, there have been no reports of Google informally approaching governments of countries such as France, Germany or Israel, which maintain heavy censorship regimes. There have also been no reports of Google attempting to tackle censorship in countries that censor Google indirectly such the UK, which maintains a sophisticated ISP level blocking system that prohibits UK users from visiting an unspecified number of sites that appear in the Google search index, and which would prevent Google servers based in the UK gathering data on the same said sites. So potentially manipulating search results gathered from UK based servers to make it appear that certain website did not exist.
Based on Google's past actions analyst believe that such approaches are unlikely to be made.