Thinking twice about doing business in China

Thinking twice about doing business in China

Summary: As is the case in many governments with respect to their countries, the Chinese government sets the ground rules before foreign companies can do business in China.  The choice between going along with those rules or losing access to one of the fastest growing markets in the world has largely been a behind-closed-doors decision that involved no government intervention.

TOPICS: Government

As is the case in many governments with respect to their countries, the Chinese government sets the ground rules before foreign companies can do business in China.  The choice between going along with those rules or losing access to one of the fastest growing markets in the world has largely been a behind-closed-doors decision that involved no government intervention.  Until now.  As Fortune reports, Congress is none-too-happy about the sacrifices that the tech sector (it's picking on Microsoft, Yahoo, Google, and Cisco) appears to be making in the name of profit.  Even worse, a bunch of human rights organizations are piling on:

U.S. Rep. Tom Lantos, a California Democrat and the founding chairman of the Congressional Human Rights Caucus, said the companies declined to attend a briefing, held Wednesday, to analyze the role of U.S. business in Chinese Internet censorship....Lantos said the U.S. firms have joined in "China's efforts to restrict the flow of information and to punish people who have the courage and determination" to fight for democracy and freedom....."They caved in to Beijing's demands for the sake of profits," Lantos said. "These massively successful high tech companies...should be ashamed."...Other members of Congress, along with advocates from human rights groups Amnesty International, Human Rights Watch and Reporters Without Borders, also delivered scathing critiques of the tech firms.

There's a difficult moral question that has probably been best framed by Google on this matter.  The Internet has clearly turned into a channel for free speech and information access.  The fact that American firms (firms rooted in democratic values) are helping to facilitate that for Chinese citizens is a foot in the door and an important one at that when it comes to opening up Chinese society to the democratic values espoused here in the US and elsewhere. 

One critical aspect of the type of censorship that's at issue here is that it attempts to cover, as best as the Chinese government can manage, the publication of and access to ideas that it believes its citizens shouldn't be publishing or accessing.  The Chinese government may have more luck on the publishing side.  But in terms of filtering out democratically themed content that its citizens might access, censoring is not a scalable solution.  One need look no further than the success (actually, the lack thereof) that the world has had on the spam, phishing, spyware, virus and worm fronts. Not only are these are still massive problems that have been and will continue to be difficult to get a handle on, they also demonstrate the multiple paths through which content enters and exits a computer.  It's simply unfeasible for a single government to keep watch over and make a rule for every bit and byte that goes in and out of every citizen's Internet-enabled devices (including handsets).

In other words, regardless of what the Chinese government does (technologically, via laws, etc.), when search companies like Yahoo, Microsoft, and Google are helping the Chinese people gain access to the world, those people are going to end up with better access to democratically themed content than not.  If you ask me, that's a foot that we'd rather have in the door, than not.   Now, some ZDNet readers have suggested that this is sort of like saying that it would have been better to provide the Jews with train transportation to Auschwitz than to make them walk. I understand the point, but I don't see it that way (and as I've written before, members of my family were shot to death in a Jewish ghetto in the Ukraine).  Microsoft, Yahoo, Google, and Cisco are not carting  thousands of people off to their death and I could be wrong, but I'm 99.99 percent certain that the Chinese people would rather have censored access to those technologies than none at all.  That's because they represent hope.

Topic: Government

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  • Absolutely correct

    First and foremost, what members of congress and the human rights activists fail to realize is that we, the United States, can't just go around telling other countries how to run themselves (even though we do sometimes). We may not like how things are going across the pond or wherever, but that doesn't matter. We expect foreign companies to abide by our rules when they do business over here.

    Secondly, some access is better than none at all. What the members of congress and the human rights noobs fail to realize is that their approach is SELF DEFEATING. What they want is for the people of China to be free like us and have information like us. Fine. But they want to block American companies who provide information access from doing business in China for bowing to Chinese goverment demands.

    But if one blocks those companies then that means no access to information for people living in China. Way to go, everyone.

    This is one of those situations where there will be no change overnight. By allowing the people of China limited access now, it will only serve to fuel their hunger and have them place heavier and heavier demands on their goverment for more freedom of information in the future.

    Take even the limited access away and the people of China are back to square one.

    • Not to mention....

      that after years of granting China "Most Favoured Nation" status it is more than a little hypocritical for politicians to harangue companies for doing exactly what successive administrations have wanted them to do - i.e trade with China as much and as fast as possible in order to correct the massive trade imbalance resulting from the status granted above by...who?..why - its those politicians again.

      Its almost enough to make a man cynical
      Dave F_z
      • I agree

        It's simply astounding that any politician - ANY politician - would have the gall to tell those companies they should be "ashamed".

        Carl Rapson
    • Nope

      Naive at best.

      The best solution would have been for the tech companies to take a pass. And for two very practical reasons.

      1. Let the Chinese stay in the dark. Tough. Let the Chinese thugocracy take the heat from the population. Do them some good. In negotiations you really need to be able to get up and walk away from the table - and the tech companies showed that they can be rolled.

      2. Where do the tech companies now stand if some other government also wants censorship? They have shown not only that it can be done, but that they would be happy to oblige. Don't confuse Googles recent stance in their fight against the DOJ - that one is window dressing to keep all the fans from looking at their data collection and mining techniques AND their willingness to do business with facist governments.

      The battle to keep information free from government intrusion and rules over the internet was lost when Google signed on the dotted line.
      • So right

        you are SO right. Though let it be noted that the arguments of the hypocritical politicos have nothing to do with it, they are just as far off base as the the fascist supporters. Heck, the western governments (us and eu) already have used fascist-like tactics to curb the tech companies freedom, not to mention civilians rights, and destroying what little image of free democracy we had left.
        For instance, the respective (not respectable) governments deciding for a specific company how to design software. In truth, it was the fault of that company that went along with those arbitrary, irrational regulations, that led it to complying with another fascist governments ridiculous demands on its business.
        All tech companies - ALL companies, and private citizens, too - should get up and say - "NO government has a right to decide how to run our business. NO government may take away our personal freedoms." ( - as long as the law is obeyed, and of course noone gets hurt....)

        As for the Chinese - how long do you really think they would survive, if our economy would stop supporting them? They would collapse in short order.

        One more point to make - regarding the argument that is commonly spouted, "censored internet is better than no internet" - what if the citizens dont know that its being censored? What if they are led to believe that they have full, unabridged, unbridle, free walk of the great land of information? Not only is the Red propaganda that much more effective, but... now they have no reason to fight, or sneak, to get internet access, since they think they already have it.

        Quite the opposite of the intent, you just took away their hope.
    • A word from a China National studying in Singapore

      I came from china to sg to study since e age of 14 thus has seen both the eastern and western culture enough to give my judgement. Let me tell u this, not only all chinese prefer censored search than no search but a lot of us prefer censored search over uncensored search. All this time u r disputing on a wrong perception. We asians do not share the same value and culture as the westerners. What u perceive right is not quite true for us. We do not want ourselves to be exposed to certain information(politics aside) as much as u do not want ur kids to be expose all the time to violence and bloody scenes. It undermines our virtue which we holds dearly. If u do not understand us, u have no right to judge the action of google. i would say a good majority of us prefer censorship over no censorship. And this is not about politics. Politics is but a small portion of this whole censorship. We are willing to compromise in censorship on politics to benefit from censorship in other areas.
  • Google the Whore?

    I have been arguing on the Asianist Blog ( along similar lines, but not making much headway against the absolutist stance there.
  • Congress.... Pyakas!

    How dare congress even thing of fussing about how Google, MS, or anybody carries on in China.
    They are one of our largest trading partners!
    Where would we be without the tremendous revenue generated from tarifs charged on dirt-cheap Chinese imports.
    If congress really cared that much about human rights, maybe they should stop directly funding sweat-shops!
    • It's not's you

      Every time you make a purchase, you ought to be looking at the label to see where the product was made. If you buy "Made in China", it's your own fault. Most people go for it because it's cheaper. It's not Congress' fault people put money ahead of principles.
    • You stupid

      "tremendous revenue generated from tarifs charged on dirt-cheap Chinese imports"

      Is that revenue more than our profit from these goods? We Chinese buy something made in home and you fools buy something cheap. That is why we'll surpass you and konquer you in the near future.
      • Yup

        And if anyone doesn't believe that isn't the master plan of the Chineese government, wake up.

    China's business is China's not ours. I wish we would not press China or any country to be different or like us. We have a constitution that we don't even live under, why look at another country and squak about the freedoms they don't have when we don't have them either. This country is steering our thinking toward Bush this and Bush that instead of what is going on when one man (a lawyer) is allowed to change our pledge alligence to take out something that will talks to his daughter about God. Where are her freedoms and what happen to majority rules. No constitution thats where, and we are trying to tell China how to live. Leave China to the Chinese take care of our own problems ourselves.
    • You really don't get it!!!

      Yes, we have some issues here...but they are due to extreme leftist liberalism. The Chinese have it even worse off. But how does the fact that we have problems here mean we shouldn't try to push them toward the ideal? We need to push back here, *and* push for change there. The reason Google shouldn't give in is that to do so is not merely remaining neutral, but aiding and abetting the oppressive government. That's different than being's just wrong. It would be better for Google to be blocked...then every other major internet site...and maybe then the Chinese people would rise up and pressure their government.
  • Some or None

    I have not read all the posts on this, so someone may have said this already. But some access is better that no access, because if they have some access, it is only a matter of time until someone figures a way around the method of censor.

    The Google "do no evil" is only a statement of intent, and since peoples concepts of "evil" may be different, obviously everyone is not going to view the Google action the same way.

    Unfortunately intent always seems to be judged by outward actions, and sometimes the best of intentions does not turn out as expected. You could say Google is only doing it for the money, or that they are making the best of a bad situation, it is up to individual interpretation if their actual intent is "do no evil".
    • So by your standards we should business no matter what.

      Ok So why did we attack Iraq? or Why did we stop doing business with Germany under Hitler? or have sanctions against other countries? or We cut off relations with Hamas (sp?) after then won a democratic election? No trade with the USSR actually ended them. But we can have cheap t-shirts and 3rd rate products from china, it is ok to trade with one of the largest oppressive and abusive gov'ts in existance? What about cuba? They have never done anything to us, lets trade with them.. that's right they do not make 3rd rate products cheaply to OUR CxO's can keep making more money as they send jobs somewhere else. I guess logic and being human is out of the question.
  • Appeasement of Totalitarian States Mistaken

    It is a mistake for a search engine to cave in to Chines demands for censorship of information. Let the Chinese block all internet traffic; they won't be able to do it for long. The tighter that rotten regime tries to strangle freedom of expression, information and conscience, the more freedom will slip their grip. Eventually the whole system will come down, which is exactly what happened to the Soviet state.

    The Chinese Communists are quite justified in their fear of internet information; it will contribute mightily to their undoing. They are trying to have their cake and eat it, trying to convert to a market economy without admitting the processes that make a true western market economy work, including free flow of information and political freedoms. As with the Soviet Union the Chinese are simply a small claque trying to hold onto autocratic power. The way to deal with them is to isolate them by not doing business with them. Had US companies not insisted in commercially pandering to militaristic Japan almost to the eve of Pearl Harbor the Japanese would not have had the oil and steel with which to even undertake "Operation Hawaii."
  • censored? you'd better think twice

    If there no censored tech exist, there is no united states exist, there's more criminal and more private fortune unrespect, here's the same rule to apply to China.
  • Doing business in China the modern way!

    It is a sad commentary that absolutes no longer resonate in our global society when economic or financial concerns are placed ahead of many other social concerns. The argument pressed today is 'Why not give Chinese citizens a fraction of the Internet yet deny them one of its truly essentials - the search engine.' We are not willing to accept this in western society why should we believe those in China would? Are Western business concerns afraid of losing out on a potential 1.3 billion people market that they bend to political pressure? I suppose with market saturation in the West the only one left is in China and to invest there one has to follow they're rules. Absolutes, moral or otherwise, give way in a world that modern technology has shrunk and new relationships are created and therefore new absolutes are created! It appears one can justify most anything with this logic!
  • Is there anyone like censored to use technology?

    I'll bet U.S citizens would rather have censored access to search technologies than no access at all.
  • Let's turn it around

    Imagine a 'hypothetical' US President with conservative religious values decides that people shouldn't be searching for information of abortion, birth control, gay rights (among other things)...and so says to the Internet search engines...You are NOT to return ANY hits on those words or else you are out of business...shut down...hit the road, jack!

    Would we have weaselword apologists saying.."Well, it is better to have SOMETHING than nothing."?

    I bet not! The howls would be heard around the world...but if another government wants to restrict its citizens from getting (what it considers to be) 'subversive' information then we roll over and play dead. "We can't interfere in another country's policies!"

    Sounds a bit hypocritical to me.