Showdown between Google and China marks turning point

March 24, 2010|By John Pomfret | The Washington Post

BEIJING — — The showdown between the Internet giant Google and the world's most populous country marks a turning point in what was one of the great alliances of the late 20th century - the bond between Western capital and Beijing's authoritarian system.

Although Chinese officials insist that the Google case is an isolated one and won't affect China's opening to the West or its market-oriented reforms, Western businessmen say Google's audacious move to confront China over the issue of censorship underscores a sea change in how Western businesses deal with the government. Most pointedly, Western businesses have begun to push back openly against China.

In announcing Monday that it would stop censoring results on its Chinese site, Google acknowledged that it was "well aware" that the Beijing government "could at any time block access to our services." But the company also made it clear that that outcome would be better than having to censor itself any longer than it has.

Although China has not taken any draconian action against Google or its employees, it has started censoring results for sensitive searches on Google's Hong Kong-based Web site, where its users on the mainland have been redirected. (Hong Kong users could see uncensored results.)

There were also signs that China wants to punish Google in other ways. On Tuesday, a Hong Kong-based Internet company, TOM Online, announced that it had stopped using Google's search. Meanwhile, analysts predicted that two major mainland Chinese state-owned mobile phone companies were rethinking deals with Google.

Analysts say that China's willingness to stand up to Western firms is a consequence of its meteoric economic rise. The government doesn't need Westerners' investment as much as it once did, and it is increasingly bald-faced about its desire to acquire their technology.

"The Google affair is both catalyst and evidence of change," said Arthur Kroeber, managing director of Dragonomics, a Beijing-based economics firm. "We are at a turning point. It had been very, very unusual for foreign business to say anything too negative about China because the opportunities here were too large."

Indeed, for decades, Western businesses have been Beijing's closest friends. When Congress railed against China over human rights issues and threatened to revoke China's most favored nation trading status in the 1990s, the American Chamber of Commerce and other groups flocked to Washington to knock on doors and state China's case. The last major Western company to openly confront the Chinese government was Levi Strauss & Co., which withdrew from the country because of what it termed China's "pervasive violation of human rights."

More recently, Western businesses have been willing to voice their concerns about the way they're treated in China. The European Chamber of Commerce has issued a series of reports over the past several years criticizing China for a deteriorating business environment. One report accused China of embracing "economic nationalism." Another said China had effectively halted economic reforms.

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