No winners in Google's latest tussle with China

The web giant is considering pulling out of China – but the consequences could be drastic for both sides

THE ANNOUNCEMENT by the web giant Google that it was considering pulling out of China because of cyber attacks and censorship came in a fairly harmless looking blog posting on the firm’s website.

But the implications in the carefully-worded document are enormous and could have huge implications for China and its role in the world.

“We have decided we are no longer willing to continue censoring our results on Google.cn, and so over the next few weeks we will be discussing with the Chinese government the basis on which we could operate an unfiltered search engine within the law, if at all,” the statement said, adding that it may have to make the painful decision of shutting its China operations.

The repercussions began quickly. The statement prompted an astonishing outpouring of support from the country’s web community, with defiant messages online and bouquets of flowers left at the US company’s HQ in Beijing.

“Google – a real man,” said one note attached to a bunch of flowers at the company’s offices at the Tsinghua Science Park in Beijing.

In such a politically-charged environment as China, where dissent is scarcely tolerated, the placing of bouquets is a daring move.

Security at the science park declared the act “illegal flower donation”, according to a flurry of Twitter messages flying around the ether.

Although use of Twitter is blocked by the internet censorship programme known as the Great Firewall of China, canny webizens use virtual private networks or proxy servers to get around the restrictions. They have been out in force in the past few days.

“China has now created a new term: “illegal flower donation”! To put “illegal” and “flower donation” together in one phrase, we live in an era of truly distorted values,” ran one Tweet.

Another Tweet said: “The wings of some birds are too pretty; to lock them in a cage to enjoy them is evil.”

China’s booming economy needs the internet to keep information and logistics flowing, but the government dislikes the platform it provides for dissent and has tried to control content and steer it towards commercial applications, rather than into politically murky waters.

People are now watching to see what the Chinese government does next. Google is a major global company and its statement is by far the highest profile act of defiance by a foreign firm in China in the face of Communist Party influence.

Guo Ke, a professor on mass communication from Shanghai International Studies University, said it would be “almost impossible” for Google to quit China and that the Chinese government would not eliminate its censorship either.

“It will not make any difference to the government if Google quits China. However, Google will suffer a huge economic loss from leaving the Chinese market,” Prof Guo said in remarks posted by the Xinhua news agency.

“Chinese internet users are the real victims if Google quits China. I think Google is just playing cat and mouse, and trying to use netizens’ anger or disappointment as leverage,” Prof Guo said.

He added, in a conciliatory tone, that the Google case was, however, a reminder to the government that internet supervision could be more moderate and smarter.

Traditionally foreign companies working in China are slow to criticise the government on issues such as human rights and freedom of speech, and the prevailing ethos is that engaging with China is a way of creating a more favourable environment which will ultimately lead to greater freedoms.

Google has always had a “Don’t Do Evil” mantra in the way it does business. When it agreed to allow censorship on its Google.cn platform in January 2006 it did it in the belief “that the benefits of increased access to information for people in China and a more open internet outweighed our discomfort in agreeing to censor some results”.

Google admitted that reconsidering its stance on China was a painful decision but has always insisted that pulling out of China would be far more damaging to freedom of communication in China.

Governments, too, tend to deal with human rights issues behind closed doors, respecting China’s oft-stated position that these are domestic issues and that foreign governments have no business interfering.

When a company of the stature of Google makes a stand on issues of censorship and freedom of speech, it creates a whole new scenario, as it could cause others to act in a similar fashion.

Many shareholders have felt uncomfortable with the way big corporations have agreed to follow China’s rules unquestioningly, and the Google statement has certainly opened a wider debate.

So far the response from the Chinese government has been muted.

Chinese reporting of the story has focused on the fact that the decision prompted the company’s 700 China staff to fear for their jobs, but there has been no reference to broader issues about censorship.

Some commentators believe Google may be bluffing. CLSA Asia-Pacific Markets wrote in a report that China was unlikely to give much ground to Google.

“China could face some international pressure if Google pulls out, but otherwise it is unlikely to have much impact. We believe Google will probably stay, as China is a vital market,” it said in a research note.

Economically it is not such a difficult decision to make. China’s market for internet advertising remains modest, about 20 billion yuan (€2 billion) last year, about one-third of which came from search advertising.

But this is a growing market. Some webizens suspect the decision was based on business reasons, while others thought Google was making a big mistake.

Tang Jun, the former chief executive of Microsoft China, was quoted in local media as saying: “The decision is not a big deal for Chinese netizens, but this will be the most foolish decision in Google’s history.

“To give up China means to give up half of the world.”

The question now is whether China is fearful of giving up the other half.

Clifford Coonan is Beijing Correspondent