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Google vs. China

Chinese expert on why Internet giant doesn't care about $300 million

| From BU Today | By Art Jahnke

Google's home page in Chinese.

Call it the Battle of the Behemoths: the most populous country in the world versus the most influential company in the world. Ever since it set up shop in China in 2006, Google has been publicly unhappy with China’s practice of censoring the Internet. Earlier this month, after finding evidence that cyberattacks on its system had originated in China and appeared to be aimed at the Gmail accounts of Chinese human rights activists, the big company threw a small fit. It threatened to pull out of China, effectively abandoning a consumer market that is coveted by companies around the globe. Last week, Google postponed the release of two of its Android phones there, a move that was interpreted as an exclamation mark on Google’s willingness to let go of China.

As the battle rages, Bostonia spoke with Joseph Fewsmith III, a College of Arts & Sciences professor of international relations and political science and the author of four books about Chinese politics and history, including China Since Tiananmen: The Politics of Transition (2001) and Elite Politics in Contemporary China (2001).

Joseph Fewsmith III, a College of Arts & Sciences professor of international relations and political science, says a lot of Chinese Internet users have been upset by increasing restrictions. Photo courtesy of Joseph Fewsmith

Bostonia: Google, which has been operating in China for several years, is threatening to shut down its search engine there unless it can run uncensored. Why is it making this threat now?
When Google went into China in 2006, its decision was controversial both within the company and throughout the human rights community. Despite its slogan “Do No Evil,” Google agreed to build a search engine for the Chinese market that would censor search results, in compliance with China’s policy and laws. Google’s argument was that being in China and providing better search results to the Chinese people was better than not being there. This was, I think, a reasonable argument, and indeed Google searches in China return more results than the leading Chinese search engine, Baidu.

If Google was always uncomfortable with censoring its search results in China, what made the situation intolerable from its point of view was a series of highly sophisticated cyberattacks on the company in December. These attacks targeted the e-mail accounts of Chinese activists, essentially using Google’s servers as a library through which the activities and contacts of Chinese activists could be traced. Google was not the only company hit in this period; apparently over 30 U.S. companies were hit with similar attacks. In response, Google announced that it would discuss with the Chinese government operating a search engine without censoring results, and if that was not possible, it would withdraw from the Chinese market.

So there were two separate issues — censorship and cybersecurity — involved, but it was the latter issue that prompted Google’s announcement.

What’s at stake? How much business or money does Google stand to lose?
The stakes for Google are not large. Baidu and Google earn about $1 billion a year, with Google earning only about a third of that. Given the size of Google’s earnings elsewhere, $300 million a year is not much. This has led some people to argue that Google was making a business decision to exit the Chinese market rather than protesting either censorship or cyberspying. Given the potential growth of China’s Internet market, that seems overly cynical.

Do we know who hacked Google?
No. Google has been very careful not to accuse the Chinese government of doing the hacking. Part of the problem is that it is very difficult in cyberattacks to know who has launched the attack — spoofing is too easy. Because these attacks were apparently very sophisticated, much suspicion has focused on the Chinese government. But there are many hackers in China, sometimes “patriot hackers,” or “red hackers,” who launch attacks on entities they think are critical of China. Sometimes these hackers can work closely with the Chinese government, but sometimes they do not.

What has been the reaction of the Chinese government?
Initially, the response of the Chinese government was low-key. Following Google’s announcement, the State Council Information Office said simply that it was requesting more information about the case. The Foreign Ministry spokesperson, Jiang Yu, responded by saying that hacking is against the law in China and welcoming foreign Internet companies to do business in China in accordance with the law. Vice Foreign Minister He Yafei argued that the Google case was a commercial dispute and that it should not affect Sino-U.S. relations.

At the same time, China was very firm that it was not going to change its approach to censorship. A commentary in China’s official newspaper, People’s Daily, said that any company seeking to do business in China would have to abide by Chinese laws.

Did the Chinese people have any reaction?
Yes. A lot of Chinese users of the Internet have been upset by increasing restrictions. Censorship has tightened up in recent months. So, many sympathized with Google, leaving flowers and other expressions of support at Google’s headquarters in Beijing.

It seems the political tensions surrounding this case have ratcheted up in recent days. Is that correct?
Yes. On January 21 Secretary of State Hillary Clinton gave a major speech on Internet freedom. She addressed issues affecting many countries, not just China, but there was a very sharp tone to her speech. In particular, echoing Winston Churchill’s famous 1946 speech in Fulton, Mo., she said, “A new information curtain is descending across much of the world.” This speech seemed to change the Obama administration’s approach to China significantly. For the past year, the administration has been trying to elicit cooperation from China by viewing U.S. relations with China as a complex whole that involves many issues around the world, which they do. This approach viewed human rights as an important issue, but only one of many. Clinton’s speech, however, once again put human rights issues front and center.

At the same time, the secretary’s speech, in my opinion, confounded two separate things, threats to Internet security and censorship. The United States and China have a common interest in addressing issues of cybersecurity — we both face threats to our security from cyberterrorism — but linking this to the censorship issue only makes addressing cybersecurity issues that much more difficult.

What was China’s reaction to the speech?
Predictably, China reacted strongly, denouncing Clinton’s speech.

So where do we go from here?
That is a difficult question to answer. Whatever talks there may be between Google and the Chinese government have been very quiet, if they are happening at all. It seems that Google has left itself no room but to retreat from the Chinese market, but you never know.

This year was shaping up to be a difficult year for Sino-U.S. relations in any case. There are issues of arms sales to Taiwan, and President Obama will no doubt meet with the Dalai Lama at some point. And the economic issues, including trade disputes, trade deficits, the value of the renminbi, and the structural readjustment of the Chinese economy, are both complicated and contentious — 2010 will not be a dull year!

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On 28 August 2011 at 6:02 PM, blogsew wrote:

China was behind a massive phishing hack of Gmail accounts that included U.S. government officials, human rights activists and journalists. China has fired back at the search giant, warning Google to stay away from being a political tool

On 20 September 2010 at 11:18 PM, Jas (SPC'08) wrote:

Some Chinese support to boycott other search engine in favor of the national giant Baidu. probably thats the reason behind google hacking. Who knows whatever the result of their conflict?? but at the end of the day public lose.

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