On Google’s quitting China

Maybe I should say something on this issue since I have done a lot of thinking about Google’s strategy in China since the first time they entered China. I have to make a disclaimer that I am Chinese, and I don’t agree with Google’s self-censorship in the first place.

To make long story short, let me briefly review how the censorship works in China. For every website that offers services in China, a so-called “ISP license” is required. However, the government will revoke your license if it thinks that you are not so “manageable”, and therefore you have to shutdown your website (or they will block you if your servers are abroad). When Google first entered China, Chinese gov didn’t give it a license, and banned the access to Google.com from China since its search result was uncensored. To make the service available to Internet users in China, four years ago, Google started to filter the search results and provided them via Google.cn. Google.cn is a domain name registered in China. Google is just one example among many Internet service providers that do self-censorship.

Every website in China, if their servers are in China, do self-censorship. Otherwise, secret-police will unplug your server cable and put you to jail if necessary.  As you can see, by restricting the service provider’s license and setting up the Great Firewall to restrict the access of Internet users, Chinese government literally set up a panopticon so that the prisoners (users and service providers) can watch each other and have to do self-censorship to survive.

However, Chinese government was still not satisfied with what Google had done. They want to have full control of Google. During these years, say, pretty much once every year, Chinese government and the state controlled media would criticize Google for something that “is not legal according to local laws” and would suggest a solution with no surprise: tighter self-censorship. For instance, last year, they tried to flood Google.cn with some obscene keywords so that those keywords would be high frequent enough to enter auto-completion system. Then, they made a TV program showing that when you type in “son”, Google search box would hint you with “son and milf”. On that program, they were criticizing Google for “helping distributing pornography”. In one word, Google has been under a very high pressure doing business in China. Chinese government
always wants Google to be its homeboy, which we obviously know Google’s response: No, simple and straight.

I do agree that Google’s market share in China is not good enough, so I don’t think Google will lose any revenue substantially by quitting China’s market. China now is different than 10 years ago. Even it looks very nice from the outside now, it is extremely corrupted inside. Maybe I am making an oversimplified statement, but the truth is that no private business, not a single one, with proper moral standard, can make money in China. The reason is fairly simple: it is a government controlled market instead of a free market.

Essentially, the market is controlled by the government and you have to “pay” for “using” the market. It sounds crazy since according to Adam Smith, nobody can really control market, the hidden hand. But currently, seriously, Chinese government, with a huge visible hand, is able to. Being a country with very high tax rate and secret police everywhere, the government has a much higher controlling power than that we would
normally think of over the domestic market. It can simply kick the player out, or arrest the player, if that player doesn’t obey those so-called rules. Google is one of the victims.

As a totalitarian state, it naturally needs some common bonds to control people’s mind. In China, insofar, the best mind weapon is called nationalism. Chinese government, intentionally or unintentionally, make some netizens believe that Baidu is a local company and it is a good kid, while Google is controlled by “westerners” and also is a bad kid.

I am not concerned about Google’s losing money in China. In modern society,  some business might be able to earn money in a country without free speech, free market and democracy; some business might be able to earn money under a big government. However, in a country when tyranny is combined with big government, which we usually call totalitarian state, no private-owned company can make any profit if
its moral standard is not compromised. The history in the last half century has provided so many examples.

Also, I am very optimistic about the future of Google’s business in China. Again, i
I strongly believe that Google will return to China on the day that China becomes a democratic nation where all citizens enjoy proper human right protection. Then Google will dominate China’s market, since it is really a superior service and there will be fair competitions.