Google and U.S. vs. Chinese Censorship

Jan. 22, 2010 -- Two cheers for Google and Secretary of State Hillary Clinton.

Last week we saw Google publicly complain about China's growing censorship of the Internet -- and worse, cyber-attacks on Google's search engine that were, in all likelihood, backed by the Chinese government. The search engine giant went so far as to threaten to leave the Chinese market if these concerns weren't addressed.

Wednesday, Clinton, in a speech carried on the State Department Web site, declared that unrestricted access to the Internet would become a top priority for the administration – and directed sharp criticism at a number of countries around the world, notably Egypt and its recent arrest of 30 bloggers, for the recent spike in Internet censorship around the world.

But she gave special emphasis to China, now with the world's largest number of Web users, calling on that government "to conduct a thorough review of the cyber intrusions that led Google to make its announcement. And we also look for that investigation and its results to be transparent."

Secretary Clinton built her case on what might be called the "Three Internet Freedoms":

1. The right of all peoples to have access to an uncensored Internet.

2. The right of individuals to exercise free speech on the Internet.

3. The right of businesses and other organizations to have access to uncensored information on the Internet in order to compete fairly.

Pretty impressive stuff, actually, and one showing a level of understanding about technology that one rarely encounters inside the Beltway. Kudos to Clinton for stepping up, in an era of kowtowing to dictators, for human freedom and (in the case of those Egyptian bloggers) liberty.

The question now, though, is whether there are any teeth in those threats.

Let's take Google first. Not to be too cynical, but getting some back-up on this problem with China (as well as some anti-trust protection) from the Obama Administration was no doubt the reason Google chairman Eric Schmidt risked a lot the company's goodwill sucking up to candidate Obama during and after the presidential campaign. In that respect, Clinton's speech can be seen as a partial payback.

But what now? Washington is hardly in a position to put much leverage on Beijing these days. The Chinese hold a ton of our debt, the Chinese market is helping prop up many of our failing companies, and Chinese power around the world is growing, even as ours is, voluntarily, on the wane. The snubs by the Chinese premier to President Obama are now even the stuff of "Saturday Night Live" skits.

So, is the U.S. really prepared to ignite a trade war with China over Google censorship? Not hardly. We'll complain, we'll threaten, but in the end we'll do nothing. China holds the cards on this one.

And Google? Will it really pull out of the Chinese market? Probably not. China is rapidly becoming the number one search user in the world as well -- and thus it is a market that Google simply can't give up. Worse, Google is already struggling against a homegrown Chinese search engine competitor, Baidu -- and walking away from what will likely soon be the world's most valuable search market would not only be foolish in the short term -- but in the long-term might create a powerful new global competitor.

As for the Chinese government, like all good totalitarians, they've got their reasons for censorship. In China's case, it's couched in a call for everyone to row together in harmony on the Good Ship Prosperity -- a bit of cheerleading that one presumes is starting to grow a little hollow among the citizenry.

Still, the party is going for it. Said Minister Wang Chen of China's State Council Information Office, presumably with a straight face, "Our country is at a crucial stage of reform and development, and this is a period of marked social conflicts." He did not specify when this "crucial stage" might end, but only added for good measure, "Properly guiding Internet opinion is a major measure for protecting Internet information security." In other words, he seemed to be saying 'we'll use porn to justify rounding up anyone who doesn't agree with us.'

Nor, for the moment at least, can Chinese industry be expected to give anything other than sub rosa support for Internet freedom. At the heart of the Chinese economic revolution has been a tacit acceptance of a distinct boundary between what belongs to the party and what belongs to the commercial sphere in China. As long as the cranes are busy and skyscrapers being built, if the ChiCom Party wants to control the Web, nobody in Chinese industry is going to say a word of complaint.

Google knows that. As I've often written in this column, I think Eric Schmidt is one of the smartest (and shrewdest) executives in high tech. I'm sure he knows he can't win this one. And so, he's going for the tactical defeat. My bet is that Google will stay in China. But for now at least, it has put itself on the side of the angels by coming out publically against both censorship and (unlike, say, Yahoo) the abuse of Chinese dissidents. In doing so, Google makes sure that competitor Baidu, as a perceived handmaiden of the Chinese government, will forever be suspect both inside and outside China. That's a smart competitive move.

Meanwhile, by aggressively pointing out the seemingly government-backed hacker attacks, Google probably hopes to embarrass the Chinese government and get it to pull back on this aggressive behavior. And getting the Obama administration to step up and announce its support for Google, is a reminder to the Chinese that the U.S. may be toothless now, but it won't be forever.

Still, to my mind, the real impact will come from Clinton's speech. This is the strongest position probably any nation has ever taken regarding human freedom in the Internet age. After pointing out the various abuse of this freedom around the world, Clinton made the shrewd argument that any nation that censors digital information ultimately robs its industries of the information they need to stay competitive in an increasingly global marketplace.

"We feel strongly that principles like information freedom aren't just good policy, not just somehow connected to our national values, but they are universal and they are also good for business", Clinton said. In other words: censor the Internet and eventually you will sacrifice prosperity -- and that will, in turn, put your regimes at risk.

In a fast-growing nation like China, those words may not mean much right now. But good times don't last forever; and for China they may end sooner than we think. And when that day comes, Chinese business leaders and workers are going to remember Clinton's warning and start asking the party some tough questions.

This is the opinion of the columnist and in no way reflects the opinion of ABC News.

Michael S. Malone is one of the nation's best-known technology writers. He has covered Silicon Valley and high-tech for more than 25 years, beginning with the San Jose Mercury News as the nation's first daily high-tech reporter. His articles and editorials have appeared in such publications as The Wall Street Journal, The Economist and Fortune, and for two years he was a columnist for The New York Times. He was editor of Forbes ASAP, the world's largest-circulation business-tech magazine, at the height of the dot-com boom. Malone is the author or co-author of a dozen books, notably the best-selling "Virtual Corporation." Malone has also hosted three public television interview series, and most recently co-produced the celebrated PBS miniseries on social entrepreneurs, "The New Heroes." He has been the ABCNews.com "Silicon Insider" columnist since 2000. His new book, written with Tom Hayes, is "No Size Fits All."

A version of Malone's "Yes, Virginia" column has run every December since 2001.