The following is my latest post on Digital East Asia.
I’ve just been on a Berkeley Haas MBA student trek to China, where one of the companies we visited was Google China (before the recent news broke). Having talked with several Googlers and also pondered on the issue for a bit on my flight back to Berkeley, I’d like to share a few thoughts on the still developing showdown regarding Google Inc.’s (NASDAQ: GOOG) Chinese operations:
- As regards the abstract and philosophical issue of “what is the right thing for Google to do” — “abide by Chinese law” or stand by its “do no evil” mantra? — there is actually no right answer to this question. First off, most governments in the world adopt some form of censorship, and China is not the only country where Google has to abide by local law. Chinese netizens have pointedly dug out the 2008 news story in which Google assisted the Indian government in arresting an Indian man. Secondly, the argument made by Google 4 years ago when entering China (ie – that offering Chinese netizens access to limited information is better than no information) is still just as valid as the moral claims Google is now stating when threatening to exit China. As a poor analogy, should a man steal from a food bank if he sees lots of hungry people on the street? The act of stealing itself may be repulsive, but does the end (saving people’s lives) justify the means? I honestly believe this is an issue which you can side with either way and there is no right or wrong. Furthermore, a cyber-attack is illegal by any country’s law, whereas what is censored and what is not censored can be different due to country-specific issues like religion or in the case of China, politics. So for Google to use the hacker attacks as justification that it can’t tolerate Chinese censorship anymore is somewhat dubious, since this is not exactly the same issue.
- Secondly, this confrontation helps highlight the different cultural differences that are important in business in the US and in China. On our recent student trek, every company (whether multinational or local) emphasized the huge difference in business culture – “it’s not right or wrong, it’s just different.” What I mean by this is that Google’s going public has made the Chinese government lose face, and this will only result in a lose-lose situation. If Google was pissed about the hacker attacks, it should have escalated that to the relevant US government agencies, and therefore go through official diplomatic channels. From the Chinese perspective, by breaching the regular channels and creating such a PR issue, Google has shown that it has no respect for China, its government, or even its people. Just a quick glance at my friends’ statuses on Kaixin, the most popular Chinese SNS, and I can see just as many people who are sad and “mourning” for Google as there are who are angry and skeptical of Google claiming the moral high ground (“just leave”). Google has arguably alienated some Chinese netizens by escalating this political disagreement into a high-profile media story.
- Thirdly, what is the fallout? A few possible scenarios are as follows (my own speculation, neither confirmed nor denied by my chats with Googlers):
- “Worst case” scenario: Google China is completely disbanded, all .cn services sare hut down, and all employees are let go (or for some people, offered transfers to the US); the aftermath is very likely that the Chinese government will block Google.com for an extended period of time to recover its lost face. Absolutely worst possible outcome, termed “lose-lose-lose” by the WSJ editorial.
- “Moderate case” scenario: Google’s .cn services are shut down, but Google China’s engineering staff is kept on, in a pure R&D center (think Microsoft Research Asia). Some form of comprise will be reached between the Chinese government and Google, and Google.com will remain accessible but prone to occasional blocks in China.
- “Best case” scenario: Business as usual. Somehow all parties get out of this political row with something to show, and everyone can forget that the whole thing even happened. This is only “best” in that we can go back to our prior state, not necessarily “best” in the moral and philosophical debate about censorship etc.
In closing, I’d like to say that the current events are unfortunate by any measure, since the biggest losers potentially are the Chinese netizens. Competition is necessary for a healthy market, and letting Baidu, Inc. ((ADR) NASDAQ: BIDU) own the Chinese search market is just as bad as letting Google own the US search market. This is why I root for Google in China and Microsoft Corporation’s (NASDAQ: MSFT) Bing in the US.