Saturday, January 16, 2010

Google's Rallying Cry in China

I was just interviewed with Daniel Gross by Newsweek On Air about Google's announcement that it may leave China due to hacking of Gmail accounts and censorship in China. Here are my comments from the interview today.

How essential do you see greater freedom to Chinese economic development, and how long can they continue their current influence on world markets without it?

One freedom is perhaps the most crucial to economic development. That's freedom of speech. It is the only way Chinese society, companies, government, etc. can tackle its rampant corruption problem, which will impede the advancement of China. It is essential for the efficient use of capital, scientific development, effective market functions, fair trade, sound diplomatic relations, intellectual property protection. Without freedoms or the provision of public goods, the China brand will remain weak.

Given that global manufacturing is centered in China, the country will have more opportunities to build up its technology control capacity. One question in my mind is whether we will see an increasing gap between two "worlds" with competing norms—between emerging markets and rich countries or between state capitalist countries and free market democracies.

What about the argument that without tight controls the pent up aspirations of China's 1.3 BILLION people could cause chaos? Is it ethical to stir that pot?

To the contrary, without representational democracy, Chinese society is searching for some kind of valve to release its pressure and frustrations—over corruption, product safety scandals, pollution, land rights. Right now without freedom of speech, the balloon is being squeezed into Wild West internet forums in which people spread rumors and gossip. The country would benefit from a professionalized media sector with incentives to break stories freely.

Even Americans who don't care much about internet freedom in China are worried about Chinese cyber-attacks on U.S. companies and the government. How extensive is it and what are they after?

No one knows but the FBI, Pentagon, and just about every single serious China hand has been talking about China's cyber attacks for a long time. The nature of US-China relations and vulnerabilities is changing; it makes previous flare ups, for example over Hainan island, look quaint. The gravity has grown over the past year and culminated in December when more than 20 companies were attacked. It is very serious. Human rights organizations have used Gmail to communicate with people in China. If Gmail were compromised it would literally put people's lives in jeopardy.

Leaving aside the cynical view of Google's move, is there a real ethical question about whether that particular company's presence in China—even if complicit with Chinese censorship—helps spread democratic values, slowly to be sure?

From Google's perspective, it was a trade off. How much evil would it have to do in order to do some good and make money. They put it on a scale and decided that the amount of good it could do in China was worth it. That is no longer the case. During my last trip to China last month, everyone, including Chinese, complained about corruption, arrogance, fakery, and a lack of trust in that society.

The question has now been turned upside down: Is China worth it? I think the biggest effect of Google's move is that it will expand the debate and increase the range of options. It is no longer a given that you have to be in China to succeed. Companies and people can now think in a broader framework that takes into account ethical implications.

In a panel discussion at the Carnegie Council last week, Ian Bremmer of Eurasia Group—a frequent guest on this show—said a major ethical challenge for many companies and Western governments will mirror Google's—how to co-exist with China despite very different value systems, respecting theirs and our own. How do we best approach making those inevitable compromises?

That is one of the biggest questions of our time. I see a convergence of ideas and moral values. The Chinese are taking some of what is good from the West. The West might be able to take some things that are good in China. The answer is that we have to assess the merit and ethics of all decisions and stick to what we believe is right. What is right is also practical. In the long run, I feel China will come to that conclusion as well. It is a business concern, too. Another release valve in Chinese society can be people's relationship and connection with companies. Visits to China have suggested to me that building an ethical, trusted brand in the Chinese market would be a huge opportunity.

Photo by gwydionwilliams.

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