Information Imperialism vs. The Information Curtain

On Jan. 12, 2010, David Drummond of Google Inc. posted an entry on Google’s official blog titled “A new approach to China.” In it, the senior vice president of Corporate Development and the chief legal officer outlined the broad details of a cyber attack against Google’s corporate infrastructure originating from China. He said the attack was launched in the middle of December, and that Google had been investigating the attack since that time. “As part of our investigation we have discovered that at least 20 other large companies from a wide range of businesses—including the Internet, finance, technology, media and chemical sectors have been similarly targeted,” he wrote in the blog entry.

The blog entry went on to emphasize that the primary goal of the attackers on Google’s services was to access the Gmail accounts of Chinese human rights activists, although it says that the attack failed. The attackers largely failed because they were only able to see subject lines and account creation dates for two specific Gmail accounts, according to Vice President Drummond. However, the investigation revealed that “…dozens of U.S.-, China- and Europe-based Gmail users who are advocates of human rights in China appear to have been routinely accessed by third parties.” This was not accomplished in the largescale attack, but had been accomplished over some time prior to the attack using a variety of methods.

Drummond went on to speak about the reason he was announcing this to the world – Google’s apparent disillusionment of China. He spent the last four paragraphs of the entry essentially reprimanding China for free speech restrictions and human rights violations, concluding that Google will “review” their business operations in China and that “we are committed to working responsibly to resolve the very difficult issues raised.”

This blog entry caused an explosion of words on the Internet. On technology news sites, the whole thing quickly became known as The Incident, or the Google Incident. Bits were, and still are, flying fast and furious about the whole thing. Coverage from every major and minor news source created a spectrum of responses about Google’s announcement, ranging from hopeless optimism that Google would now openly attack and destroy the Great Firewall of China, to cynical pessimism that Google was only covering for its own defeat in the Chinese market by Baidu, a China-based search engine.

But the greatest effect of this message was that it got the attention of two governments and untold numbers of businesses that took sides on the issue. Out of all the news reports, blogs and discussions about the event, only a few seemed to catch on to its significance. Google is a corporate entity and is in the private sector. However, it publicly denounced the practices of the government of China, the largest country in the world, and got a response. Companies are re-evaluating their Chinese operations. U.S. Secretary of State Hillary Clinton mentioned this event, using it for political fuel to also denounce China’s restrictions on freedom of speech, and on the free flow of information. Google got help from the National Security Agency and support from the U.S. Senate, which passed a resolution condemning the attacks. Google has been the catalyst for a chain of events that has not even finished yet, and the company is only 10 years old. The reigning king of the information age is testing its strength, and the results are impressive.

Taking the Opportunity

There are a number of political consequences to what Google has done. China responded to Google’s statement two days later by issuing an official statement calling for all Internet businesses in China to follow the law. “China’s Internet is open. China welcomes international Internet enterprises to conduct business in China according to law,” said Jiang Yu, a spokeswoman for the foreign ministry. This is a common theme when China speaks about its Internet – it says that it is open within the law. But compared with most other countries’ version of open, of course, there are deficiencies.

Ten days later, Secretary Clinton took the opportunity to give a speech declaiming the limits to freedom of speech and information imposed by several countries in the world. She grouped China together with Saudi Arabia, Egypt, Tunisia, Vietnam and Uzbekistan as countries that have lately stepped up their threats to the free flow of information. She compared these practices with the Iron Curtain of the Cold War by saying, “With the spread of these restrictive practices, a new information curtain is descending across much of the world. And beyond this partition, viral videos and blog posts are becoming the samizdat of our day.” She also linked the free flow of information directly to the U.S. economy, and said that that United States will protect “our networks.” She went on to say, “Those who disrupt the free flow of information in our society or any other, pose a threat to our economy, our government, and our civil society. Countries or individuals that engage in cyber attacks should face consequences and international condemnation.” Hillary Clinton claimed the Internet for the United States just as if she had stuck a flag in it. And not only the Internet, but the actual free flow of information. This is an entirely unprecedented statement by a leader of government and the consequences cannot be completely predicted.

China’s response, however, was predictable. Foreign Ministry spokesman Ma Zhaoxu said, “Regarding comments that contradict facts and harm China-U.S. relations, we are firmly opposed. We urge the U.S. side to respect facts and stop using the so-called freedom of the Internet to make unjustified accusations against China.” But the best rhetoric came from China’s state-run English- language Global Times newspaper, which said, “China’s real stake in the ‘free flow of information’ is evident in its refusal to be victimized by information imperialism.” It claimed that Clinton’s speech is a disguised attempt by the West to impose its values on other cultures.

Ripples in a Pond of Money

The immediate effect of the announcement on Google’s blog post was the quick rise of stock of its rival in the Chinese market, Baidu. Baidu’s stock gained 52.99 points, which was 13.71 percent. Google’s stock did not change significantly. Other than this, there were no truly immediate effects from Google’s actions.

However, the long-term effects of Google’s announcement can be quite far-reaching, based on the other 20-some companies that Google said were attacked. The number was later upped to 33. These included companies such as Adobe Systems, Northrop Grumman and Juniper Networks. And this well-documented cyber attack exposes what many companies were not willing to or afraid to speak about before – the hidden costs of doing business in China.

Many companies are eager to do business in China. The entire world seems to be waiting at the doorstep of the Chinese empire, hoping to be let in. They see an economy growing at an amazing rate, and a huge number of people looking for new services. And, they estimate that the costs of doing business will be much lower than in their original countries. However, many times when companies enter the Chinese market they find themselves on the losing end of what was supposed to be a great bargain. There are many hidden costs to doing business in China – from simple things like quality control issues and management overheads to difficult things like bribes to government officials and intellectual property theft. Google’s choice whether or not to leave the Chinese market due to one of these hidden costs can very well become a trend-setting act. Other companies can also evaluate what’s going on in their Chinese subsidiaries and think again if the benefits outweigh the costs.

Some editorials have gone so far as to say that China is waging a war against foreign companies within its borders. They say that the Chinese government would much rather see local copies of foreign companies instead of foreign firms, and that they actively encourage local companies to do whatever it takes to gain an advantage of their foreign competition. Google’s potential withdrawal in the face of stiff competition from Baidu highlights this phenomenon, since Baidu is actively aided and sponsored by the government of China. Google can show by example that the rules of the land just do not favor foreign companies, and China’s economy could suffer as a result.

There is also a question that nobody has asked. What is the economic cost to a country losing access to Google? Google is a great driver of commerce. Without it, people find it difficult to use the Internet at all. Other search engines can offer some services, but rarely the comprehensive suite of free features that Google offers. If Chinese companies lose access to Google as a market tool, will there be economic consequences? It is impossible to say, but some are worried that this is the case.

Ideology Abounds

Some of the more ideological on the Internet trumpeted Google’s move as a stand against evil and a fight against censorship for the good of all mankind. Google’s corporate motto, “Do no Evil,” has been under criticism since the company entered the Chinese market in 2006, agreeing to censor its search results in compliance with the Chinese government’s policies on the strict control of information. This announcement that Google is no longer willing to comply with Chinese government policies is viewed by many as an ideological shift and the beginning of an information war directly against the Chinese government.

There have been some changes to Google’s search result offerings on its Chinese website already. The greatest example of this is searching for the 1989 Tiananmen Square massacre on Google.cn. This event, with pictures iconic in the Western media and instantly recognizable, is virtually unknown to younger generations of Chinese due to extreme censorship. However, searching for it on Google.cn brings up images and articles that were not there before. It is unknown how much longer this will work, or whether citizens inside China can follow the links, but for now it is a small token of concrete change on the part of Google.

Also, Google’s stance, which is cloaked in ideology, seems to have had a large effect in China itself. Chinese residents have started to put flowers and candles out at Google’s Beijing headquarters, as if in mourning. This act was quickly banned, however. Discussion on Chinese Internet sites referred to “feifa xianhua,” meaning “illegal flower tribute,” but that term was quickly banned from most Chinese-language sites as well. When interviewed for a story at APIA sia.com, a student said, “Google is the entrance, the freedom to the Internet.” Another student commented, “As a leader, Google’s leaving implies the downfall of the Chinese Internet, including the respect of free speech.”

Some people’s hopes that Google’s move may be the beginning of the company’s efforts to actively thwart Chinese censorship have gotten a boost of promises from the U.S. government. In her speech, Secretary Clinton also said, “We are also supporting the development of new tools that enable citizens to exercise their rights of free expression by circumventing politically motivated censorship. We are providing funds to groups around the world to make sure that those tools get to the people who need them in local languages, and with the training they need to access the Internet safely.” Whether Google itself will be involved in this effort still remains to be seen, but if it does not do so, another company probably will.

Google’s announcement may very well go down in history as the most powerful blog post ever written, depending on what happens next. With the latest news coming in as this article is written being that China is linking these issues with larger trade issues and Taiwanese defense issues, a major political showdown may result between the two largest powers in the world, at least partially because of Google’s stance. If a well-funded private sector effort is made to ensure the unrestricted flow of information through the Internet, and it succeeds, it may very well bring vast political consequences to not only China, but also Iran, North Korea and other regimes that try to maintain power by restricting information. The companies that may change their stance on the Chinese market, and the economic considerations there, may also have farreaching consequences. At the risk of sounding too optimistic, Google might have just begun showing that the pen is mightier than the sword, or the bit mightier than the bullet.