Rhys Blakely: Analysis
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Google recently seemed to suggest that it was willing to wait several millennia for its Chinese business to take off. As it plays its very long game, despite losing heavily to the local players and having to face down shareholder protests on human rights issues only last week, it, like other Western internet companies, is sticking to Beijing’s rules.
It is easy to explain why, but harder to believe that the explanation will last the long term. China’s attractions are plain. It already has about as many internet users as the US, the world’s largest online market. Yet, so far, the dragon is barely blowing smoke rings when it comes to e-commerce.
For although it may be true that being rich is indeed glorious, few of China’s 1.3 billion people have tested Deng Xiaoping’s dictum. Indeed, the average Chinese citizen has roughly the same chance of being hit by lightning as of becoming a dollar millionaire. Despite the prodigious rise of a new consumer class and the advance of the Shanghai stock market (up more than threefold this year), an estimated 200 million Chinese live on a dollar a day – about equal to the number who are online.
The three big American players – Google, Yahoo! and Microsoft – look at such figures and see the beginnings of a megamarket. None of them, however, is thriving in the Middle Kingdom.
The Eastern web is a tough nut. Ask eBay, which is being crushed there by Taobao, the domestic auction site owned by Alibaba, the company into which Yahoo! poured its struggling China business two years ago to avoid going it alone on the mainland.
The story is similar in the key online advertising market. The China-based Baidu.com leads in internet search, with nearly 60 per cent of the market, three times Google’s share.
Unperturbed, Google’s plan is to hunker down and keep Beijing sweet. “China is a nation with a 5,000-year history,” Eric Schmidt, the chief executive, said recently. “That could indicate the duration for our patience.” And so, Google (or “Gu Ge”) famously censors its Chinese search engine, so results for “Tiananmen Square”, for instance, do not mention the 1989 massacre (unless, for a while, at least, you misspelt “Tiananmen”). At its annual meeting last week, it defeated a call from shareholders who said that Google should not store data that could identify users in “internet-restricting countries, where political speech can be treated as a crime by the legal system”.
Across the sector, the bad China publicity keeps dripping like water torture. Last month, in the first case of its type, a Chinese political prisoner sued Yahoo! in a US federal court, alleging that it helped the Chinese Government to torture him by providing information that led to his arrest in 2002. (The Times Online article about the case was one of the ten most-read stories on the site in the week in which it appeared.)
Cisco Systems, Silicon Valley’s largest company and a supplier of hardware to the “Great Firewall” – China’s massive online censorship machine – experienced an investor revolt when 29 per cent of shareholders voted for a motion that demanded that it should report on how its products were being used to limit free speech.
In January F&C Asset Management, one of the dissident Cisco investors, issued a somewhat woolly “warning” to technology companies to get their acts together on how to deal with such incidents.
F&C missed a trick. It called for a common industry front but such a thing was summarised when Yahoo! recently said that it was “distressed that citizens in China have been imprisoned for expressing their political views on the internet”, but that it had to follow local laws.
The real question is this: How likely is it that Beijing will keep the same rules over the long term?
There is a growing sense that something will have to give as the party state ditches Marxism and finds its free-market feet. Increasingly, it is being suggested that the same circumstances that give China its massive potential are setting the scene for a radical social and political reorientation.
Cheap Chinese labour knocked a percentage point off US inflation last year, Wall Street analysts reckon. In his recent book, The Writing on the Wall, Will Hutton wrote that ordinary Chinese “do not know the numbers, but they live with the consequences”.
The fallout from China’s economic miracle includes a growing underclass of about 150 million migrant workers. Never mind a million-dollar fortune, many Chinese labourers – who are, after all, the consumers whom Google and its rivals wish to attract – would be happy with a fair contract, a weekend break and marginally safer factories.
Where Manchester’s worker dissidents of the early 1800s had the works of Percy Bysshe Shelley to urge them to “rise like lions after slumber”, China’s modern equivalents have World of Warcraft and dissident bloggers.
On a daily basis those modern firebrands are testing the integrity of the Great Firewall. Some of them, no doubt, would like to line Google, Yahoo!, Cisco and Microsoft up against that wall for their part in creating it.
If Mr Schmidt really is thinking about the very long term, he should not suppose that Beijing will be able to maintain its controls. The original Great Wall did not stop the barbarians it was built to block.
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Proxies are indeed very easy to use to get around the government blocks. The down side is, of course, that certain functions of websites won't work through a proxy, and access is much slower.
If you really need to read a given page, though, it's no problem to circumvent the firewall. In fact, thanks to the wonders of Firefox plugins, on my home computer I merely right-click on a link and select Open with proxy/Open with proxy in new tab.
Tom, Beijing,
I think the best chance of speeding the demise of the Great Firewall of China is to make the Chinese aware that they are being censored. Google's thoughtful approach to their presence in China has ensured this. [The way Google results are displayed shows where Government rules have prevented a link being shown. Not so for the national search engine.]
Brenda, Brighton,
Proxy..yeah right..agree with Bham..this guys doesn't obviously has a clue of what's going on here in China.
For two weeks before x-mass, me and other expats have our email highjacked, meaning not only we couldn't POP3 them, but they wouldn't reach our mail server in Hong-Kong..the sad thing about censurship in China and how it's being analysed by the west, is that analysist are always one wagon late behind what currently going on.
Anyway, a country with presomption of free market economy while restricting the freeedom of its cistizen is destined to doom,,,there's no durable free-market economy without a proper democracy.
As for T Yang, Shenzhen, you only making a fool of yourself posting this type of crap, again with this racist and paranoid attitude toward foreigners in your country, I'd like to remain you that foreign investment and foreigners coming in your country to re-build it, has proven more than beneficial to your country, if you're not happy why don't you shut your doors
John, shanghai,
If the Chinese government has nothing to hide, it has nothing to fear with allowing its' citizens to see any information on the Internet. The "net citizens" of China are living in a virtual dictatorship, seems not too long ago they were living in an actual dictatorship (under the viscard of communism)...but even that changed...and they will continue to do so.
Mao Ze Bong, London/Shanghai,
The Great Wall didn't work as a defence, but the Ming-era restoration was a boost to the economy (I'd say it created jobs, but enforced labour probably doesn't count).
The Great Firewall can be avoided with a few trivial mouse-clicks, but hey, it provides employment for thousands of net cops!
So there's one reason to keep it around, at least.
Tom, Beijing,
Is there no way around the great firewall of china? Wouldn't it be pretty easy to just move Wikipedia content to a site that is allowed? Do chinese officials manually review every website that is "authorized"? I would like to see the chinese have more access to the Internet. They they will realize how it is *they* who are brainwashed.
Joe, Vancouver, Canada
It seems T Yang has maybe read too many articles in the China Daily. As for being colonial, can I mention Taiwan here and not get a beating in the local police station? I think T Yang will find the Chinese do a good job of enslaving themselves under their resrictive laws and lack of human rights. I think it is time that both Chinese and the West opened their eyes and realise what is going on. China should realise that the usual retoric of foreigners invading their country is just outdated and pathetic. As for the West I believe it is time that instead of blindingly following the Chinese government's wishes it can use its investment to push for change as imports will have to rise for the economy to stabalise. I have a problem with the companies who seemingly seem to cover there eyes and ears and ignore the abuses that do happen in China. Yet in the West have gone to war in the name of human rights. Even writing this little comment is a dangerous action in China, how is that right?
Will, Buxton, UK
Besides all the contradicting points of view of the author; the wall threat doesnt come from outside, but from inside, because the people in China is becoming middle class very quick and with time they will find ways to increase they liberties Google will benefit from that, but obviously it would not be a mayor player in this fight, China has chose their player long ago.
Rob, Bob Zombie, UK
at least google is honest enough to tell me some searched items are not shown due to the local law when i use it; its chinese counterpart, as well as a "local rival", never gives such information on its pages.
another thing the e-commerce companies overseas should be aware is that most chinese university provide internet access for domestic websites merely, which is a major factor that more chinese college students prefer qq, rather than msn, and email service by local websites rather than gmail or hotmail.
btw, the most painful thing of internet restriction is not being able to use wikipedia.
claire, nanjing,
You could most likely break through the 'Great Firewall' using a web proxy - not exactly difficult, unless every single web proxy is blocked. We can use proxies in the UK to access US only sites, if the proxy website is based in the US. So one would image it would also work in China.
James, London, UK
I can only say this guy doesn't know china!
Huibin, Bham,
Time to test everybody's virtue, reasoning and integrity. As it's unavoidable, plz tie on the safe belt and enter roller-coaster section.
alan, Beijing, China
It should be remembered that there are still far more people living on about a dollar a day in India than in China so if one wants to talk about the continuing supply of cheap labour, it will be plentiful for a long time to come, assuming suitable infrastructure development.
Edmondson, Edinburgh,
In china territory, you should follow china's law, no matter what you claim.
please be kindly noted that any intention to destry china with internet is a pipedream, your colonial brainwashed mind to slave chinese people is totaly wrong in the 21st century!
Great Wall did not stoo the barbarians, but Great Firewall of China can stop your colonial brainwashed barbarians it is built to block.
T Yang, Shenzhen, China
If 200 million Chinese live on a dollar a day ,as reported in the article, is accurate than the West has got a lot to worry about indeed. The huge figure means that no other countries can remotely compete with China as the factory of the world for a very long time. As far as the Chinese leadership is concerned, exponential growth is the name of the game at the moment. The dragon may be only puffing steam at the moment. It is only a rehearsal for the most brilliant fire work that the world has ever seen.
Wing, Poole, UK
Here's a news flash for you: 14-year-old kids wasting time on WoW and university students writing heart-felt entries on poetry blogs aren't going to bring down the CCP any time soon. There is a complete disconnect between poorly paid workers and government censorship of the internet, as the Chinese underclass is the group which is least likely to make use of it. The author talks about "a growing sense that something will have to give" with the ditching of marxism, however this problem has been 'growing' since 1979, but the question as to what it was that was going to 'give' was answered in 1989. Change in Chinese society is highly unlikely to come from the workers, as they are essentially leaderless. The elements of Chinese society which might serve as engines of change have been to co-opted to varying degrees by economic growth. Vague forbodings about how change in China is 'inevitable' are not the same as concrete evidence, nor can we easily predict what form such change might take.
Gilman Grundy, a factory with 200,000 workers, PR China
The Great Firewall is here to stay, atleast for a while. If you consider the demographics and check their political/ social inclination, you will notice an appaling trend where very few are bothered about this Great Firewall. The 50+ are not bothered because they made their money through this very system which formulated the Great Wall. The 30+ are again busy making as the dragon is flexing its muscles in exports. And the under 30 have lots of other issues to take care of such as jobs, increasing cost of living etc.
Unlike in the west, where financially successful people tend to leverage their status for a good social cause, the ones in China are happy to see such controls. They are hardly bothered about how the whole set-up is forcing people to live in a certain way.
Google should go more aggresive. Baidu is not technically superior. On the back of its success is a monstrous sales force, connections. Google has the technology and needs a desire to push further by innovating.
InChina, Shanghai, China
So China is evil, thanks for tip. Shell we impose a trade ban with such evil country, or we will continue to do business with them as usual? Please be more realistic in "labeling", due to the fact that most of the world superpower's is more than egger to get a slice of Chinese cake.
Zoran, Limerick, ROI
I think Blakely means that as China's poor become richer, there will be more money for the West's big internet company's to go after. But at the same time, more money and consumer choice means there will be greater resistance to China's controls on free speech. There were 90,000 civil protests last year in China - THAT BEIJING WILL ADMIT TO. Who knows how many more have gone unreported? It seems clear that many are deeply dissatisfied with their conditions. Meanwhile, Why would the Chinese authorities bother to spend so much on internet controls unless it saw a real threat to the status quo?
bob, London,
Let us all hope that the day is past when governments can keep information and understandings from their people and that the free flow of information will reach into even the most closed society. Perhaps forty or fifty governments still try to filter access to outside information, North Korea and Vietnam and Cuba being perhaps the most retrobate in their efforts. Let's hope that technology will far outstrip the ability of governments to censor information that the offending governments will simply stop trying. Why not?
James, Jacksonville, Illinois U. S.
it's a fabulous explanation about the current circumstance of china,
increasing boredom agitated with the disseminating propaganda that the dragon 'rise after the slumber' persists for a while.
swagger, tokyo, japan