Big trouble in bigger China

Is it hypocritical for Western companies to deal with China, or are Intel and Symantec's woes this week just a storm in a tea-cup?
Written by Leader , Contributor
"Honesty and ethical conduct… is our rule every day and for all that we do."- Ethics and Compliance Overview from Intel's homepage

"Those who cause 'especially serious harm' by providing 'state secrets' to overseas organisations and individuals over the Internet may be sentenced to death." - China Supreme People's Court ruling, 21 January 2001

Despite the continuing slump in European and North American markets, China's IT sector remains one of the world's bright spots, growing by 20 percent a year. Software sales should hit $30.5bn (£16.7bn) by 2005, according to analyst IDC. Unsurprisingly most Western IT suppliers are falling over themselves to get a piece of the action, and as a result will do seemingly anything to ingratiate themselves with the Chinese government.

Courting a regime that has a such an unapologetic human rights record has put a lot of the US' IT companies, coming from the libertarian environment of San Francisco and Silicon Valley, in an awkward ethical position. Human rights organisation Amnesty claims some 40 people are currently imprisoned or detained in China for terms of between two and 11 years in connection with the use of the Internet. Amnesty also recently named 33 companies including Microsoft, Sun and Cisco as providing China with the technology it uses to block around 19,000 Web sites.

Symantec has become the latest company to fall afoul of the Chinese ethical minefield. The Cupertino, California-based company found itself in hot water this week: its antivirus software declared a program called Freegate to be a Trojan Horse. In fact, Freegate is a legitimate program that lets Chinese users bypass the government's Web censorship.

Experts and commentators immediately began to challenge Symantec's real motives and point out that Freegate does not qualify as malware. Symantec quickly corrected its "mistake": could it be that the gains from currying favour with the Chinese authorities wouldn't offset the long-term costs of the publicity backlash at home?

Intel also recently found its ethical record being scrutinised over China. At last week's Intel Developer Forum, the company's president and chief-executive-in-waiting Paul Otellini had to face some uncomfortable questions from the floor over the warm reception the chipmaker gave a delegation from the Chinese government. Otellini came out with the stock answer that "having a dialogue" with China is the only way to effect change. Perhaps, but history shows how badly that can go wrong.

ZDNet UK is not immune to these criticisms: our parent company CNet has a division in China. But fear of criticism should not lead to silence - that is one of the most powerful weapons of totalitarianism. Our cherished freedoms do not come free of cost, and a willingness to openly confront our own dilemmas - even when they shade into hypocrisy - can only make us more likely to find the right path. Courage rarely shows up in corporate statements of ethics. Perhaps that should be the first thing to change.

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