Google's ongoing China struggles
Summary: How do walk away from the fastest growing market in the world? Can any company afford to ignore a billion potential users?
What do you do when the most important market in the world also happens to be controlled by an oppressive, communist regime with a miserable human rights record? If you're General Motors, you very carefully begin selling cars and find success by partnering with the right Chinese companies and bending over backwards to comply with Chinese law. If you're Google, you rattle your sabres and try to maintain your "don't be evil" brand, while still ensuring that several hundred million potential users can access your vast array of services unfettered.
Good luck with that.
I've said before that Google actually should walk away from this market until changes sweep through China in the same way they've swept through the Middle East. The human spirit is such that people eventually say enough is enough. Staying in China simply exposes Google and the data with which its countless customers worldwide entrust it to unacceptable risks and scrutiny. The PR isn't too hot either.
And yet...The country has over a billion people in it. A billion. Like a thousand millions. And change. All of whom should really be clicking on ads when they Google something rather than when they, ummm, Baidu something.
This week, Google has claimed that the Chinese government is blocking Gmail, among other core Google services. The Guardian reports that
A Google spokesman told the Guardian this week: "Relating to Google, there is no [technical] issue on our side. We have checked extensively. This is a government blockage carefully designed to look like the problem is with Gmail."
The Chinese government, for its part, calls this accusation unacceptable. Whatever that means.
If you know that Google is constantly under government surveillance, access to your email and other cloud-based data will frequently be interrupted by government hackers, and that the service will either be unreliable or get you thrown into jail, how often will you be Googling? Why would you use Gmail? I have tens of thousands of emails in my Gmail account; interrupting access even to my personal account would be crippling on many fronts.
So why stick around? Why does Google continue to dump resources and efforts into what seems to be a lost cause? The next conflict over some service or some degree of censorship is right around the corner. Is it worth it? How about Google redirects those resources to making Google Docs fidelity match that of Office365? Or finally get a social network right?
Because the last time the World Bank checked (2009), there were 1,331,460,000 people living in China. Can any company afford to walk away from a market like that, no matter how flawed and difficult it might be. All of us have spent longer than we should in a dysfunctional relationship sometime in our lives hoping that the other party would change.
The thing here is that China just might change. A so-called Jasmine Revolution won't happen this year and probably won't happen next year. But communist, Draconian regimes have a habit of eventually crumbling. And wouldn't Google just be kicking itself if it bailed out of China 6 months or a year before the Great Firewall fell like a 21st century Berlin Wall?
Should Google stay in China or cut its losses and get out? Talk back and let me know what you think.
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Talkback
RE: Google's ongoing China struggles
Leaving a small country is not a problem, China is diff
And all of this beyond the economical view, where China is poised to become the largest market on Earth.
Are they wealthy dictatorships?
So yes China may become a great market, but it won't do so as a dictatorship.
RE: Google's ongoing China struggles
RE: Google's ongoing China struggles
The disparity is greater than that and has grown since the recession.
RE: Google's ongoing China struggles
I'm no expert, but I believe that we know more today about what our government is doing than at any point in prior history. Representative democracies will always be subject to manipluation, but they thrive on information. China still has a long way to go before I'd prefer to live there instead of USA.
RE: Google's ongoing China struggles
This is a really hard thing to be quantitative about, but in general, the Chinese are a lot more satisfied with the way their country is going than Americans are with ours. That is to say, a much greater proportion of Chinese are truly *glad* to be Chinese than Americans are glad to be American. However, we are a particularly miserable bunch, I think, being a highly individualistic country (maybe the most) and individualism being universally recognized as negatively correlated with life satisfaction.
Here's one such index: http://en.wikipedia.org/wiki/Happy_Planet_Index
Again, I accept totally that these measures are equivocal. But the idea that we are somehow better off then our Chinese counterparts, their lack of certain freedoms not withstanding, is at the least highly debatable.
However, because I *am* an American, I can't imagine being anything else. But had I been born Chinese, I'm not so sure I'd be wishing I was who I am in this life. Just don't know...
As for how much we know about our government, I would argue that, while much information is out there, we are also woefully (and intentionally) misinformed. Case in point: the argument that CPB should be defunded because NPR and PBS have liberal biases. Pure FUD.
Happiness
The 'Happy Planet Index' isn't an index of happiness or life satisfaction. It looks at happiness as a function of ecological footprint, so either higher happiness or a lower ecological footprint will lead to a higher index value. It's unfortunately been calibrated in such a way that the ecological footprint dominates. The countries at the top tend to be underdeveloped countries with warm climates -- which implies low ecological footprints -- rather than particularly happy countries. The calibration is all very subjective, so I don't think the HPI is particularly meaningful (even if the idea is interesting).
On indices of actual happiness or life satisfaction, developed countries (with their large ecological footprints) tend to dominate: there's a pretty clear positive correlation between income and happiness. If there's any correlation between individuality and happiness, I'd say it's actually a positive one too: the more individualistic countries tend to be happier. Based on Hofstede's results, for example, the English-speaking countries all tend to be very individualistic, with Australia (90), the UK (89) and the US (91) at the top. However, the next most individualistic countries would be Northern European (the Scandinavian countries and the Netherlands). Lists of the happiest countries tend to be dominated by Northern European countries, with other individualistic countries like Australia, Canada, New Zealand and Switzerland often doing well too.
RE: Google's ongoing China struggles
RE: Google's ongoing China struggles
Baidu is rubbish
RE: Google's ongoing China struggles
What you are saying does not change a thing.
Baidu is the dominant market leader in China.
I agree that enterprise mail and collaboration is just marketing fluff at this time from a Google perspective. Google is an advertising company and their primary customers are advertisers, not enterprise customers. However what this story is talking about is gmail and Google apps (i.e. cloud services).
RE: Google's ongoing China struggles
Good luck waiting for a collapse of the Chinese government in the next 6 months :) From Pew Research:
China is clearly the most self-satisfied country. Nearly nine-in-ten Chinese are happy with the direction of their country (87%), feel good about the current state of their economy (91%) and are optimistic about China's economic future (87%). Moreover, 64% of Chinese have a very favorable view of their own country, a self regard that exceeds that among Americans (48%), Russians (43%), Germans (12%) and Brazilians (31%).
RE: Google's ongoing China struggles
Gooigle is, and will always be a engineering centric company. Having an ex-Microsft reject in the helm of its China operation was the single biggest miskate by Eric Schmidt. If not for his continuing support, Kai-fu Lee?s tenure wouldn?t lasted as long; and damage done in China wouldn?t be as lingering! Most Googlers got the sense that Sergey / Larry never liked Kaifu Lee. Eric Schmidt was his ?godfather? all along. With Kaifu Lee long gone after pocketing millions, & Mr. Schmidt poised to be name the next Commerce Secretary, Larry / Sergey now has the enviable task of picking up pieces in China. GOOD LUCK!
RE: Google's ongoing China struggles
Why is there no US business running in Iran? I believe it is because of the human rights record in that country? North Korea? Same issue. Why aren?t businesses MADE to leave China which has a 'pathetic' human rights record? Let me think: hypocrisy? Or is it the idea ?if it benefits me, it is good?? (Think of many Arab allies of US and now think of their human rights record.) Is Google really worried about Chinese population not being able to 'enlighten' themselves by using Google services? Or are they worried that they cannot make Chinese use them? Google is RIGHT when they accuse Chinese government while Chinese government calls the accusation unacceptable, it comes down to "Whatever that means". If Google had an ounce of integrity, they would leave and let Chinese decide if they are interested in bringing it back. While Google is at it, it gives you 'tech bloggers' something to write about and feel proud of using the 'freedom'. Wikileaks is harmful for national security. Freedom? Selective.
You should consider leaving these anti-China rants for your politicians to get some votes.
RE: Google's ongoing China struggles
I always wonder why the so called "professional" and "unbiased" western journalism only criticized China without mentioning the many achievements of China. To the western world China is not a country populated by real people but a faceless entity of disdained and abject irritation to the "world order" of western domination; probably like a unpleasant pest. Chinese people are only pawns in the political machination for world dominance and propaganda is a better option with guns, "I make you destroy and kill yourself, thank you very much". WWi, WWii, WWiii (cold war) and now WWiv, the insinuating and dark propaganda war. Google, CNN, BBC, facebook, twitter, youtube and even Al Jazeera are the weapon of choice and journalists the new universal soldiers. You should be ashame of yourself.
They should probably stay
Western firms operating in China should of course fully abide by Chinese law within China (only people as arrogant as Google's management could imagine it should be otherwise), but they shouldn't allow Chinese restrictions to degrade the quality of their products/services outside of China. As with IP violations, Western governments (not firms) should react aggressively, and in unison, to any malicious activities by the Chinese state (or Chinese corporations) that target Western firms.
RE: Google's ongoing China struggles
If you don't like the system, just go. Google is now turning into another CNN in the eyes of the Chinese people and deservedly so.
87% of the Chinese is proud of their country, how many American feel that way about the US ? 20% ?
So Google is now going to change the feeling of the Chinese about China ? Propaganda warfare ? Oops .... I shouldn't have said it so loudly.
I'm not sure you understand my point.
I'm not sure you understand my point. If they want to maximise profit, Google should probably stay in China, and stop fighting the Chinese state and the CPC. If they want to fight the Chinese state and the CPC (a crazy idea in my view, and certainly not a profit maximising one), then yes, they should leave.
One thing you really have to understand in all of this is that the high degree of overlap between the state/party and firms that exists in China doesn't exist in the US (or the West generally, although there is some variation). Google are a private firm and have nothing to do with the US state or US policy. Google are attacking the Chinese state and the CPC because Page, Brin and Schmidt don't agree with Chinese state policies, not because of any orders from the US government.
Given Eric Schmidt's clear anti-China bias (not to mention obvious biases concerning other technology firms, and his dubious decision to stay on Apple's board even as Google were preparing to challenge Apple's iOS with Android), I think Obama would be mad to appoint him as US Commerce Secretary. It would send the worst possible signal to Chinese who often don't understand the separation of industry and the state that generally prevails in the West. Being in the EU, a Chinese backlash against the US over such an appointment wouldn't affect me directly, but good trade relations are in everyone's interests.
National pride
Speaking of 'national pride', in the Nazi era, Germans tended to be extremely proud of Germany. In modern Germany, by contrast, there's very little of this sort of nationalism (and the same applies to a lesser extent across most of Europe). I much prefer the latter environment to the former. What does it even mean to be 'proud' of a country?
Stirring up nationalism (often by pointing to imaginary foreign or domestic enemies) is something authoritarian one-party states put a great deal of effort into. The reason is that it's the easiest way to cement their legitimacy in the public view, and thus to control the population. The CPC certainly appear to be good at controlling the Chinese, but their actions (and in some cases words) imply they believe this control relies on maintaining 10 per cent annual GDP growth rates. (Maybe they're right. I've no idea.)