Chinese Blog

With the recent (although a long time coming) announcement of Google shutting down its operations in mainland China, comes much debate about the reasons and justifications for doing so. While Google (谷歌）has made claims about invasion of privacy, blocking content, and security breaches (including email virus attacks to gain info on human rights advocates) as justification enough for the pullout in China, the real reasons for Google’s sudden exit from the largest and fastest growing online and cell phone market in the world are much simpler: they just can’t compete with Chinese interests.

Let’s take a look at a few factors that played a role in Google’s decision.

First, Chinese internet is censored, a fact most people are aware of. However, its decisions to censor certain sites (gmail, facebook, youtube etc…) are not all due to maintaining political influence or silencing critics. Often times, websites that are censored are done so to provide greater market entry or market share of budding Chinese (often knock off) social networking sites. The justification is simple: these sites provide constant, and targeted advertisement space to sites people visit hourly. However, ad revenue is decided by those who own the pages, hence, domestic or Sino-centric sites are given preferential treatment as foreign sites are often “temporarily down” for weeks at a time. It’s not censorship really–it’s profiteering.

Second, is the nature of Chinese business and company structure. While the Open Door Reform Policy （改革开放）of 1979 ushered China into the capitalist global framework, the last 30 years have shown an intertwining of state and government-run joint ventures with private investors. In the last 10 years, as these joint ventures have shifted toward the private sector, the affiliations, dealings and financial support have not. As a result, companies like Baidu (百度) and China Mobile have been able to leverage influence or simply bribe their way into gaining market share while foreign companies like Google have to wait for any leftover scraps.

Third, due to the lack of regulations and legality in China regarding intellectual property rites, high end software is easily mimicked and provided to the population for free, removing much of Google’s profit stream for China. Google apps, Droid software, search engines, social networking sites–all of it is being re-branded in China without Google seeing a dime.

Fourth, broadband or high-speed internet is almost nowhere to be found in China. In fact, in all my time spent there, only government buildings had the fastest speeds (around 5-10 mbps) while the average internet household averaging an only 1 mbps or less connection. Compare that to the ubiquitous 100mbps or faster speed that is found in the US, and Chinese internet simply can’t handle the bandwith required for smart phone programs, youtube streams or video chat to be worthwhile. As a result, Google websites specific to these high speed settings fail to run properly and are thus infrequently used by people living in China.

Lastly, and the over-arching reason why Google is pulling out of China is common sense. Four years ago when Google gained access to China, it was seen as a thriving market with millions of internet users joining per day. Google saw it as an untapped market just itching to explore the internet with Google leading the charge. However, what they found in China was a population unfamiliar with the freedoms and curiosities put forth by a global community. Baidu seemed simpler and catered to burgeoning interests, but neglected the more controversial and complicated aspects of freedom of speech. It worked well with the internet infrastructure and carried all the western tv, movies, fashion and culture China was developing a taste for without introducing those pesky political or human rights issues. Since then, not much has changed. Before Google left China, Baidu had overwhelming market share and was overwhelmingly preferred by Chinese citizens (especially with youth and young adults). It seems the services Google provided to China was unwanted and seldom used, so Google said “why bother?” and pulled out two days ago.

While the reasons for Google leaving China are many, it highlights the singular resounding issue at hand, which is internet censorship. While a slight blow for short term Google revenue streams, this move could be disastrous for the long-term growth of Chinese ingenuity. The simple fact of the matter is that censoring information, no matter if it’s through book burning or blocking websites has a negative effect on education and the ability to advance as a society. Just as the Chinese blocked their harbors to trade ships in the 18th and 19th centuries, they are now building a “Great Firewall” of China to keep western internet out.