Google in China, censorship vs cash

In a surprising turn of events last week, Google said it's willing to stop doing business in China unless the world's most populous country makes concessions over censorship and computer-security concerns. The move followed Chinese hackers reportedly recently prying into the gmail accounts of human rights activists.

Former Seattle P.I. reporter, current freelance journalist, Chinese American and longtime China watcher Brad Wong has an interesting take on the situation. In a TechFlash blog post, Wong notes that due to its "5,000 years of history to draw upon for strategies to gain and keep power," the Chinese government probably won't cave to Google.

Google's threat to pull out of China over censorship is a rare display where foreign companies have more often than not accepted certain levels of intrusiveness to gain access to a huge and growing market. With 338 million Internet users at the end of last June, China has more people online than the entire population of the United States, according to figures from the China Internet Network Information Center. 

A quote by Richard D'Aveni, professor of strategic management at Dartmouth University's Tuck business school, in a Christian Science Monitor article, is particularly thought-provoking. He says, "This is a no-win situation for an American [company's] entrance. I think China is going to want control over the Internet, and I think the fate of any search engine or Internet-based company in China is one that they are either going to have to cooperate with the government by allowing espionage or they are going to have to get out if they want to live by American values."

This Google versus China battle appears to be turning into more of an America versus China ideological battle that has wide-reaching ramifications for companies around the world. It's a classic case of censorship versus cash and it'll be interesting to see how this plays out.



-posted by Andrew