Why now Google?

UPDATE: A Google Spokesperson just emailed me this: “This is not about market share. While our revenues from China are really immaterial, we did just have our best ever quarter [in China].”

Techcrunch’s Japan writer, Serkan Toto, tweeted at me tonight: “Astonished about how some people, i.e. @scobleizer, idolize Google now. What did G do in the past 4 years in CH besides playing along?”

Randy Holloway, who works at Microsoft, tweets: “You are a good guy, but you have lost your mind today. Ever think that Google is pulling out of China because they are *losing*?”

UPDATE: While I was writing this post, TechCrunch ran a post that said it was about business (and made the point that Google did this because it was losing again).

I think both questions are legitimate (albeit misguided) and they aren’t the only ones asking.

First, let’s take on the question of Google losing in China. I think this is an overly-cynical take (I stole that line from Danny Sullivan, search expert, who said the same thing).

Why is it too cynical? Because, well, if that was how business decisions got done than Microsoft would have pulled out of the search business long ago. But, seriously, to answer that you need to go and visit China, as I have. China is a HUGE market. In 20 years it’ll be much bigger than our own in the United States. Their people are getting online in HUGE numbers. So, to give up on this market now just doesn’t make sense.

Also, Google, and most other tech companies, have many employees there who develop features for the US market. I saw this first hand when I worked at Microsoft. Many of the coolest features inside Windows and Office were developed in China. So, to pull out of the Chinese market, even if you are a losing business concern there (Google was not, even though it was coming in #2 behind Baidu) doesn’t make sense at all because you’d have to give up these employees, many of which are smarter and work far cheaper than engineers in USA (when I visited China last year a HIGH END engineer was paid about $25,000 US per year, compare to a high end engineer in Redmond who usually gets paid $200,000 or more).

Pulling this move in China actually strengthens Google’s competitors (Microsoft, Yahoo, Apple, et al). Why? Because over in China EVERYTHING is done with government support. Every factory I visited was assisted by the government and approved. If Google falls out of favor with the government, it won’t get the best employees, won’t get approvals for offices, will get blocked even more frequently than it is today (how do you think Baidu got so big, anyway? You think they are actually more innovative? Yeah, right. More on that in a future post).

Not to mention that the best supply chains in the world are in China. Translated to English: that’s where the Google Nexus One phone was made (and the hard drives that Google uses, etc etc).

Google has EVERY INCENTIVE to kiss Chinese ass. That’s why this move today impressed me so much.

Now, onto the other point, that Google hasn’t done much up to now to fight Chinese censors and other human rights issues. Um, I’m sorry, but when I visited China I heard from many people that of the American companies Google didn’t play the game as well as, say, Yahoo or Microsoft. Remember Yahoo? Remember what they turned over to the Chinese government? When I worked at Microsoft I saw them play footsie with the Chinese government too. Heck, the Chinese president visited Microsoft’s campus when I worked there and got a red-carpet welcome. Why? Because China is a HUGE market and a HUGE supplier of labor that builds Microsoft’s products.

It doesn’t matter to me that Google played footsie up until today, either. They were the first to stop playing footsie and THAT deserves a HUGE round of applause.

UPDATE: VodPod’s CEO, Mark Hall made quite a few good points in his post about Google and China.

Comments

  1. Robert, I don't think you should quote me as an employee of Microsoft here. I don't work in search and you know that. I'm just asking an obvious question about the motivation for Google to pull out of China when nothing about China's policies has really changed. They are losing in that market and have failed to make any significant gains on Baidu. Why not consider the bigger picture for their motivations? Seems like a fair question to me.

  2. I'm sorry, but you DO work for Microsoft and my readers should know that. Just like my readers should know I work for Rackspace. Everyone knows you aren't speaking for Microsoft, but, sorry, it DOES color your opinions and don't try to tell me it does not. I worked there, remember?

  3. Robert, I am not talking about other tech companies. I am a critical Criminologist and was questioning & am specifically talking about and rightfully questioning Googles Corp. motivation today, not last week or last year. I am waiting this out…. On the face of it of course we can all applaud.. but i do try my utmost to never judge just the face of anything- till its been really mulled over. I think its great you are taking a position and this is why i find it worthy to see what your thinking or saying on twitter. I could care less about your following or clout but think you deserve respect just for saying what you feel, think, know, value as do the rest of us out here. I too have independent thoughts on this and know better then to “camp up”. You rock Robert, but keep cool and let other opinions flow………………….. @org9

  4. Google's 30% (rough based on numbers I've seen tonight) isn't something they walk away from lightly. It's a big market and 2nd place is still a *very big* place.

    1. Given their 2nd place market share in China and large cost savings of engineering there, it wouldn’t make sense to pull out. Being able to monetize 30% of the Chinese search market is a good situation to be in.

      A summary of what Scoble is saying http://istldr.com/view.php?q=145

  5. Wow. Was dredging the net for some serious analysis on this very important topic. Except for you, no major blog network is following up with insights.

    The major hit could be on the Android platform as HTC is inside the walled garden. Forget about other tech companies, there is a not single Sovereign Govt. in the World that dares China publicly. So Google has just won brownie points that could last for a century. They are back in my Super Duper Good list. ( Eric Schmidt's privacy talk fiasco ruined a real lot for them).

    Will you be kind enough to investigate & post the dynamics of the breach that creeped the hell out of the World's largest search engine?

  6. I remember you being here very well and I take nothing away from your experience at MS. You do have great insights about the company and made great contributions here. I just need to make it clear that I'm expressing a personal opinion here and I'm not trying to speak for the company. Our product groups and executives are more than capable of providing their point of view on Google's activities if they choose to do so.

    While working at Microsoft probably does influence my view about many things I don't have anything to gain by Google's stance on China. I'd just like to see people give some serious thought to this situation and attempt to understand what's really going on and what the true impact will be of any actions taken by Google.

  7. “Um, I’m sorry, but when I visited China I heard from many people that of the American companies Google didn’t play the game as well as, say, Yahoo or Microsoft.”
    -> But the point is they did play the game, too, didn't they? I agree there are “layers” of censorship, but wouldn't it be the “honorable” thing to not play the game at all?

    “It doesn’t matter to me that Google played footsie up until today, either.”

    I disagree. Here's an example why:

    Type in Tiananmen in Google.com and you'll get this:
    http://bit.ly/5222fG

    Type the same (simplified Chinese: 天安门广场; traditional Chinese: 天安門廣場) in Google.cn and you'll get this (simplified word):
    http://bit.ly/7KFf1y

    Quite a difference isn't it, still, after 4 years? (I know it takes some time for Google to implement their plans into the search).

    “They were the first to stop playing footsie and THAT deserves a HUGE round of applause.”
    If it really is for the reasons Google stated, then yes.

    Nota Bene:
    As I said over on Twitter, I heard the first rumors about Google planning to pull out of China in November last year (from sources out of China). This can or can't be connected to what has happened today, but it's interesting to know.

  8. didnt you guys offer 45 billion for a company with a smaller share worldwide than Google has in China? And yet you think it makes sense for Google to pull out of the Chinese market because they're *losing*?

    Thats an interesting contradiction.

  9. Dude, seriously. Would it kill you to stop asking rhetorical questions in your tweets and blog posts FOR ONE WEEK?

  10. Good analysis as always, however I think there is more to this issue than what you state. Google can do much more “good” being in China than being out of it from both a humanitarian and openness point of view. I rambled a bit here: http://bit.ly/6ooo0e and don't think Google will follow through as it does more harm than good… Just my 2 cents

  11. Danial, I am thinking your two cents should be added to my two..Four cents! Now, when Google Corp. says “attack from China” do they mean China's Government or some person/group in China? Important distinction for some of you, i assume? @org9

  12. China's been censoring Google.cn for at least six years now, and Google (and Yahoo, Microsoft, Cisco and other Silicon Valley companies) has been collaborating and condoning that activity. They went before Congress and defended their involvement in censorship. I asked a US State Dept official about this in 2005 in Hong Kong and he said you have obey the laws of the country you operate in (meaning: US Gov't wasn't trying to change this situation either.) I really want to know if Google talked the State Dept before they made this move.

    The Chinese Government isn't used to this type of public, international rebuke from a respected business entity. They'll either make a backroom deal with Google or claim that Google is offending the Chinese people.

  13. “HTC is inside the walled garden” Yup, and interesting point, thank you for that S Mohan Ramkumar. :) @org9

  14. I applaud Google's bold move. However, speaking about your comments

    >>when I visited China I heard from many people that of the American companies Google didn’t play the game as well as, say, Yahoo or Microsoft.

    This is pretty lame.

    What exactly did you hear ?
    Why is Google's censoring of search results not as bad as that of yahoo and Microsoft ?

    I think you should stick to applauding Google's current move instead of defending their past practices ((without a credible explanation of why they were better than all other American companies)

  15. This is generating a lot of noise, but hasn't played out fully yet. Re-read the press release and you'll see there's a lot of hedging and caveats in there: 'may', 'if', 'potentially', 'review'. No absolutes to date ..

  16. When it comes to China, Google's backbone was as flexible as that of a Chinese circus contortionist. I'm glad it found its backboe.

    Bobbie Johnson made a good comment: “Goog acted after its rights were infringed, not the rights of its users.”

    Either way, I'm glad it took this stand. Siicon Valley companies have a terrible reputation when it comes to kowtowing to China. They say they stand up for people's rights but not if it involves China.

    Seems there is a lot more to this story than we've seen so far.

  17. RB- I'm not saying that it makes sense for Google to do anything. I'm suggesting that pulling out of the market because they are losing is a possibility worth exploring. As for what was offered for Yahoo nearly 2 years ago, it's hardly relevant to this topic.

  18. So, here's a question: Why does it really matter why they are pulling out? The fact is that they are pulling out. A more interesting question might be what the implications are for the search industry in both China and the West. If there are no implications than this conversation is probably not worth happening?

    Andrew Pass
    http://www.lessontech.blogspot.com

  19. Google's “pulling out of China” doesn't mean they will entirely close down their research & development facilities in Beijing. They can still tap into China's talented (and cheap) engineering pools and in the mean time not competing head-to-head over Internet with locals.

  20. You made a really valid point there Robert: Supply chain and the Nexus One that, without chinese support, will go down the drain faster than a rat leaving a sinking ship. On quite a few accounts the Nexus is not what it was expected to be and apart from all the complaints coming in, the “superphone” is noway near a trendsetter. I'm sure that's not what Google expected in going head-to-head with Apple.

    Now let's take it up a notch, in layman's terms: Google gets mad at Apple, builds its own phone. Apple gets mad, buys the largest mobile advertising network. At this point both of them are in a toestepping dance contest and neither is winning (and please not go into the “driving innovation” nonsense) so one or the other has to put on some shoes.

    Which leads us back to China, where Google is losing (was losing) big time in terms of PR but gaining a whole lot more on the technology/inside market, which made some waves in two directions: Government and competition.

    Now, we all know that China has been buying large chunks of whatever it can find for the past 10 years and putting it aside & the money to good use. Now about having a utopian scenario of the biggest Internet company in the largest & most influential country that can do whatever it wants?

    Doesn't it sound like a sweet deal waiting to happen? Well it does, except that this company is already losing ground thanks to its first few compromises and of top of that, it's upsetting another company that is the chinese (and the world's) tech darling.

    It's just your regular case of “take it or leave it, it will make you look good either way”. And it only took a couple of phone calls.

  21. The little question here is this, let's say google is really hiding its true intentions about halting its business proposition with china. Let's say that this “SOPHISTICATED ATTACKS' where just an alibi by google too, to make china look the scrooge of today's news.

    – What will google achieve from all of this hype?

    Google is a Human Right Activist Now? C'mon details: http://bit.ly/google-china-censorship-details

  22. By throwing the ball into the Chinese authorities' court, Google is potentially setting up for not just a “Google vs China” situation, but a more complicated issue that China has been grappling with since its emergence in the last decades and how the world perceives it as an upcoming giant in terms of internet users.

    Zhou Xisheng, Deputy Chief of Xinhua News Agency, Director-General of Xinhua News Net, had recently proclaimed that “China has the most open internet in the world” – http://bit.ly/7b01tA . It will now be seen if their actions are indeed as loud as their words.

  23. I understand your point, but using Tiananmen Square as a test query is misleading. Of course “天安门广场” is going to return images of, you know, the actual square! Here are the search results for “天安门广场” in Google.com, which is US-based and uncensored:

    http://bit.ly/7C8EsD

    Huh, not much there — but this time you can't blame censorship for it.

    Why? Well, English speakers are very likely to associate Tiananmen with the 1989 crackdown, so Google's search algorithm associates the term “Tiananmen” with images of the tank guy.

    On the other hand, for mainland Chinese, “天安门广场” has a meaning outside of the 1989 crackdown. It's a place, and one that's smack dab in the middle of Beijing. When someone in China mentions “天安门广场”, they're probably using it in the context of “there's a street vendor near the northwest corner of Tiananmen Square selling kites,” not “never forget the people killed here 21 years ago.” Most people on the Internet use it for boring everyday stuff, not to foment dissent over an event a lot of “netizens” are too young to remember. Google's algorithm picks up on this kind of thing and organically ranks things related directly to the location itself over things related to the one incident that English speakers associate Tiananmen with.

    “天安门广场 1989″ and “Tiananmen 1989″ are probably much better terms for proving your point.

    That said, you're right that Google.cn hasn't implemented all or some of the de-censoring yet. You can tell, because on the bottom of the search results on Google.cn, you see “据当地法律法规和政策,部分搜索结果未予显示。”

    That is, “According to local laws, regulations and policies, some search results are not shown.”

  24. Dealing with the Chinese government is not black or white, but a wide variety of grays. You can comply with local laws while being “difficult.” My friends say that Google tended toward the more difficult side of things. There's a reason that China blocked Google a couple of years while leaving Baidu up. Google was being punished for not playing the game to someone's liking.

  25. Seriously I just don't understand your blog posts, Almost all the sentences start with I heard, I think etc.
    Journalism shouldn't be like this.

  26. I think Baidu benefits from hometown favoritism and the fact that they have close government connections. I'm sure they're better at kowtowing to the party bosses in Beijing (though they've also been blocked occassionally for not adequately censoring political content, porn etc.)

    However, Baidu isn't a US company and your blog comments were about US companies

    If you look at the US companies, all of them were equally willing to censor their search results.
    I don't think it makes much sense to say that one company's censoring was significantly better (or worse) than another company's censoring – though I'm sure that their censoring code would work differently (simply because they were written by different developers and also because of bugs)

  27. It seems obvious that Google are doing this because they are Angry. Business people have emotions too.
    It's quite an impulsive “up yours” reaction to the Chinese attempt to hack them. There's another country that likes to use cyber wars as a instrument of Government policy, and that's Russia. I wonder how long Google will stay there?

  28. So how many pitchers of toxic Chinese Kool-Aid has Scoble drunk? You're intoxicated man. Best get to an emergency room fast. China's barreling along with no brakes. China will not be where you think it will in twenty years. They will be big but not that big. You're extrapolating from the past twenty years and applying it to the next twenty. I can guarantee you 100% that it will not turn out that way. They've already hit the demographic wall. It won't matter how smart their engineers are or how many they have, just like it doesn't today. What matters is the flexibility of a nations economy based on market conditions. What a genius achieves in one economy can be achieved by a dummy in another. Smart people are less important than you think. Far and away the most important thing is a dynamic and flexible economy. China's economy is making great gains by catching up under top down command fashion. The Soviet Union made great gains for 50 years in the same manner and nationally the USSR made amazing progress for decades until rigid policies began to show just how flawed and ossified the system was. Over the past twenty years, there have been social and economic time bombs set all over China and I doubt they will be defused before they go off in a chain reaction. China's still got another revolution coming and it won't be pretty. Why not get out now. Reenter after political climate change and help clean up the wreckage in developing China into a large (but not the largest) developed country for the rest of the 21st century.

  29. Is this how people thing in Microsoft? Because Google has more
    share in China than Microsoft and Yahoo combined in US.

  30. I always thought this was a nice feature. You could safely browse google.cn, and occasionally when you saw that there were some censored results, you could decide that if you cared about the topic it was worth to do some proxying and use some encrypted channels to get this info from google.com. But most of the time it would be too much work to always surf in the paranoid mode.

  31. Well, for example, Yahoo handed down user private information that lead to arrests of some journalists, which is somewhat more serious than limiting search results.

  32. How is this any kind of victory for human rights? Google shows censors results one day, doesn't exist in China the next. Same end result for people living in China. It's not like this is going to intimidate Beijing, is it?

  33. Take a look at this: http://dealbook.blogs.nytimes.com/2010/01/07/co….

    Think about this: Google is 'shorting' China's regulators by playing poker face. Nothing is forever, everything's a negotiation, it's likely that the Chinese government will do some deep thinking over the next five (ten) years. It might just be time to indicate that Google really wants to be a more positive influence in China, that is, wants to do business without blackmail, corruption, favoritism, and so forth, so on, and so on.

    suppositio.us

  34. I have a different take on this issue. While I don't agree with the cynics that say Google's just cutting its losses–I also don't agree that Google is acting out of the altruistic goodness of their collective heart. In this post for @BanyanBranch I posit that perhaps Google is leaving China with plans to return stronger in the future. http://www.banyanbranch.com/google-vs-china-the

  35. My comment was about search censoring. Google, Yahoo and Microsoft have all done badly.

    However, you raise a good point in that we should look beyond search censoring. The yahoo case you mention is a good example of yahoo being on the opposite side of freedom and obeying a court order. Do you know if google has ever disobeyed a court order in China ?

    If google has disobeyed a court order and sided with freedom, you could make a good case that yahoo was much worse than google. However, all evidence indicates that Google has obeyed every important Chinese court/govt order. So I don't have reason to believe that they would have behaved any differently than yahoo did.

    You should also consider the fact that yahoo pulled out of China a long time ago. Google didn't talk about pulling out of China until after a “highly sophisticated and targeted attack ” on them.

    To reiterate my earlier comment, I applaud Google's move and think that they've helped the cause of freedom. However, I think it is a bit naive to assume that the move was driven solely by consideration of human rights or censorship and it is also incorrect to assume that there is a big difference between past google policies and those of other American companies.

  36. You could think this even bigger. What if there weren't any Chinese behind the actual attacks but one of our many secret agencies, giving Google the reason to follow the Government's command to pull out of China? Let's see what will go on with Yahoo, Hotmail etc. the next days and weeks.

  37. Google can't win in China that is why they are embarrassing the Chinese. If they want to take the moral ground they should have not got into this to begin with. Look at the Indian workers in the U.S. the work live slaves and are pissed upon. Where is the human rights there.

  38. AFAIK, Google does not keep user data in countries that don't have very strong legal
    protections for user privacy. This means that such data can not be subpoenaed.
    This makes it “difficult to work with”, but still within the law.

    There was a high profile case recently in Brazil where courts requested access to
    Orkut user accounts, and even tried going after high ranked Google Brazil employees,
    but Google did not give them the data. The data was inside US, and it would
    have been accessible only with a US court order, and that one is hard to get
    if you are on a fishing expedition.

  39. Robert,

    China is a Huge market .The question that one should look at is “what is the cost of running an Internet business” in China to become /stay profitable? It depends on the business model, If an Internet business' primary model is based on the foundations of democracy,free speech and respecting human rights and if such a business wants to tap the opportunities available in china ,then there are challenges and limitations to what such a business can expect in china. Its is often learnt in a hard way and I think Google's situation seems to be the one limited by such bottlenecks….

  40. What you fail to mention is that the Chinese education system has purged any knowledge of what happened on June 4, 1989 in Tiananmen. Most Chinese, certainly those under 30 have any knowledge whatsoever of what occurred there.

    I'm really sick of hearing repetition of official Chinese government “party line”. It seems that the Chinese government and its supporters think that the rest of us are idiots. They are the idiots if they think that they can build a wall around China. As one blogger put it “Google isn't leaving China, China is leaving the world”.

  41. Adding to what you say about Microsoft….. indeed, how well did they play the game. They sold the source code of Windows to the Chinese government? I have no idea how it was possible, but it was done. And now, where are the worst hack attacks originating from?

  42. Yes, I should have mentioned that. It also proves my point.

    Tiananmen is a bad test query if the average Chinese person under 30 has no knowledge of the 1989 event. If no picture of the tank man shows up when you look up things related to Tiananmen on Google.cn, that could mean one of two things: Google is censoring, or the average Chinese person simply isn't linking to anything involving the 1989 crackdown.

    You can hold the Chinese government responsible under both scenarios, but you can only hold Google responsible for the first

  43. As of right now the second return on Google.cn for “Tiananmen” is the following Wikipedia page: http://en.wikipedia.org/wiki/Tiananmen_Square

    From that page there is a link with the anchor text Tiananmen Square Protests of 1989 to http://en.wikipedia.org/wiki/Tiananmen_Square_p

    This is new.

    I think that Google's announcement yesterday and their subsequent actions are indicative of the conditions that Google operated under in China. Government imposed censorship and control.

    I applaud Google's bold action and sincerely hope that other world media organizations follow them, quickly. I also hope that Google's action will be a lightening rod that will awaken the world and force the regime in Beijing to loosen it's totalitarian grip on Chinese societal thought. China is too big and unruly and the Chinese people will ultimately demand their freedoms.

    Google's usership in China is also noteworthy. Google.cn users tend to be the intelligentsia. It will be interesting to see their response to whatever draconian steps the Government will now take.

    Is this the event that will be a spark that will set off a demand for human rights to flourish in China? Let us hope so.

    To your point: yes, Google sold their soul to the devil in 2006 for the right to do business in China. Their acquiescence to government imposed procedure is their responsibility. But the ultimate responsibility belongs to the greater power that imposes the rules.

    Accordingly, I believe that the Chinese government is responsible on both counts.

  44. I'm confused — I wasn't making any claim about the moral culpability of Google's action (or any sort of claim about ethics whatsoever). My original comment was simply a response to Serkan simply pointing out that his searching for “Tiananmen” or “天安门广场” on Google.cn is a poor way of assessing whether or not Google is still actively censoring.

    As for the the Tiananmen Wikipedia link showing up — I doubt that's new. Google.com has been showing that page as the top search result for “Tiananmen” for years. Google.cn, on the other hand, still doesn't display it (not surprising, since it's in English).

  45. “Indian workers in the US work like slaves and are pissed upon”.

    Vow! Being very fact-based and non-judgemental, are we? I am sure you do not mean it in a demeaning way and you are just about to petition your congressman for the emanicipation of Indian software slaves.

    When you do, Indian software slaves will be profoundly grateful to you for liberating them from their current misery of stock options, super high salaries (in INR and after adjusting for PPP) and other symptoms of disgustingly bourgeoise success.

    When, oh when, will that dawn of liberation come?

  46. To repeat what Derek said, The Nexus One and all HTC phones that I have looked at are made in Taiwan, not China.

  47. That might be so, but HTC remains a Taiwanese company. If they manufacture in China, that's fairly normal, but design and ownership remains in Taiwan. If China became a problem for Google, there's no indication it would take it out on HTC. If China did take it out on HTC, HTC could move manufacturing to any of the other low cost countries like India, Singapore, Taiwan, Indonesia, Phillipines, etc, etc. Does scaring off manufacturing opportunities sound like a trend China wants to start?

  48. U are deluded if you don't think China will have the worlds largest economy within the next 50 years, or at least have a good shot. Its track record has followed a path that has never been seen before. China has a billion people, how many does russia have. The sheer number of people, organised and unified through communism, all now working in the right direction since the shift to a market economy, is more than enough to justify how big they will be.

    China's economy is now the worlds 3rd largest is it not ? It has grown tenfold in the past 30 years, its predicted everywhere u look that it will overtake Japan. Overtaking the US is a more difficult matter, but they will be very strong competitiors. China is nothing like Russia. Just take a look at the financial crisis. China achieved 8.9 percent for the year, when the consesus was 0 to 5 percent. China has come out of the crisis unscathed.

    Its my view that it will be largest developed country in the near future (within 50 yrs or less) but its always hard to make a forecast. One thing that is for certain is that they will major players on a global scale. Much larger than most people, especially those not involved in anyway in the chinese market, expect. Just a trip down to shanghai or beijing, will skew people's worlds. Its bustling with activity, swarming with VC's, things being built everywhere. Feels like a mini new york. The cashflow is so fast n so great, u dont need to be particularly innovative or smart, just finding a way to be involved is very rewarding. Take the growth capital space for example. It's saturated ! The terms of trade have worsened as a result. In the past u get a 60% discount to ipo, with additional warrants n personal guarantees. Today its 40% discount, no warrants, no personal guarantees. Everyone is pumping money in n there arent enough deals to pump into.

  49. I disagree Maurice, with your view that the Chinese Governement are idiots. Google is the loser in this fiasco. Google is now obliged to either accept the restrictions China imposes, or leave what will be the worlds largest economy within the next 50 years. China has a billion people, all clarmouring, at an increasing rate to log on to the internet.

    The 'Western' View that the Chinese are idiots and not sure of what they are doing is an opinion. And even if this opinion is the right one, it is irrelevant. The fact is that China, with a billion people, is becoming more and more imporant as a market player, and what events that unfold (in this case regarding internet censorship), will have have huge ramifications for the future, on a global scale. We can only hope that they are not as bad as some people view them, because either way, we will be affected by their choices.

    Google is leaving China, and China is not going anywhere. There economic clout will keep increasing and we all know, that money can have some serious weightage when it comes to global influence. Whiles many see Google as the ” spark that will set off a demand for human rights to flourish in China”, I see it more as a show of the problems to come in a world where even Google cannot beat “the party”. Against all odds, the Chinese government has succesfully censored and controlled the flow of information through the internet in the past years, and show not a single sign of slowing down. The google fiasco is not a spark, Google, being the worlds largest search engine, should have been the flame. And the flame has not burned down the wall that China has already built around it.

    We are on the verge of a new world order.

  50. I think “new world order” is a bit strong. The Chinese are progressing in one way and one way only: economically and it's based mostly on cheap consumer goods. Can they progress beyond the production for export of quality more advanced products? Probably not without the intellectual stimulation that development requires. What happens when the rest of the world builds Google's “Scholar” compendium that becomes inaccessible to Chinese students?

    China plays games with the Internet. Why relax restrictions during the Olympic games merely to reimpose even stricter restrictions now? We are not talking about censoring child pornography, the issue is the censoring of broad swaths of knowledge. My bet is that “open” societies will go forth to prosper while “closed” societies find themselves falling behind.

    The fact is that the Chinese government fears criticism and in order to hide that criticism they severely restrict access to all kinds of information. And to make matters worse, this dialog that we are having here wouldn't even be possible in China.

  51. The Chinese government fear critism and they do openly restrict the flow of all kinds of information. And this is exactly one of the issues that i worry about as China progresses. To the west, the internet stands for the free flow of ideas and knowledge. To the Chinese Government, the internet can be succesfully controlled and regulated, and they will continue to do so, and without compromise. You see, it is a western view that 'open' societies are good, and 'closed' ones bad. If you come to China, you will realise that the Chinese values today are deeply anchored in the Chinese people's hearts, stemming from a monumentally long history, and they're way of seeing things is entirely different. Now the significance of this, is that whiles China does not represent the world's view of things, and fair enough, if you discount my view that China will start influencing other nations, we can't ignore the fact that China happens to have 20% of the entire world's population, and have a very good chance at becoming the world's largest economy within the next 50 years. They are presently the third.

    Now we have not even considered the implications of having such a large economy. We all know the territory that comes with being a large economy (i.e japan), and now we are talking about what could be the largest (i.e united states, at present). They're films will start being more widely viewed, they're television programmes aired overseas, they're food more widely eaten, they will host the olympics (already done in fact) etc .. and through all of this, their culture and views will have many outlets for distribution. And one of their views is that the internet should be policed, information controlled, sites prohibited etc ..

    What has happened with Google and China in essense is this. Google's model of a free and open internet that spans the globe, can never work, because China will continue to police their internet, and they are 20 percent of the world. Whats worse is that China also happens to be the worlds largest internet market at the moment.

    With regards to the ways in which China is progressing, well, the cheap consumer goods are not the only thing they have going for them. Shanghai and Beijing are chock full of venture capitalist, investors etc … With a billion people, in a developing country, people are becoming millionaires overnight, and this in turn draws more money to be pumped in. All people have to do is see what has worked for the world, and introduce it to China. The Chinese market itself is big enough to create demand for any product or service, they do not even have to worry about exporting in many cases. Once was the case where American firms were acquiring Chinese start-ups etc .. but now the Chinese are going out there and buying things up. (please read a post i wrote in reply to someone on this site, with regards to the situation in China at present)

    What i'm trying to say is that the free flow of information, acces to information, how closed or open a society is etc … these are all irrelevant because China has succesfully kept a lid on the information flow and continued to improve economically, not showing any sign of falling behind (in any respect). And in a world where economics very much affect global influence, China can possibly change the way things work. i am concerned about a strong 20 percent of the world (all sharing the same view, having the same values and culture), and its impact on the other 80 percent (fragmented into many many smaller seperate and invdividual nations, who often do not share the same views, and definately with diff. cultures).

    This dialog is possible, I am currently in Shanghai.

    previous reply :

    U are deluded if you don't think China will have the worlds largest economy within the next 50 years, or at least have a good shot. Its track record has followed a path that has never been seen before. China has a billion people, how many does russia have. The sheer number of people, organised and unified through communism, all now working in the right direction since the shift to a market economy, is more than enough to justify how big they will be.

    China's economy is now the worlds 3rd largest is it not ? It has grown tenfold in the past 30 years, its predicted everywhere u look that it will overtake Japan. Overtaking the US is a more difficult matter, but they will be very strong competitiors. China is nothing like Russia. Just take a look at the financial crisis. China achieved 8.9 percent for the year, when the consesus was 0 to 5 percent. China has come out of the crisis unscathed.

    Its my view that it will be largest developed country in the near future (within 50 yrs or less) but its always hard to make a forecast. One thing that is for certain is that they will major players on a global scale. Much larger than most people, especially those not involved in anyway in the chinese market, expect. Just a trip down to shanghai or beijing, will skew people's worlds. Its bustling with activity, swarming with VC's, things being built everywhere. Feels like a mini new york. The cashflow is so fast n so great, u dont need to be particularly innovative or smart, just finding a way to be involved is very rewarding. Take the growth capital space for example. It's saturated ! The terms of trade have worsened as a result. In the past u get a 60% discount to ipo, with additional warrants n personal guarantees. Today its 40% discount, no warrants, no personal guarantees. Everyone is pumping money in n there arent enough deals to pump into.

  52. The Chinese government fear critism and they do openly restrict the flow of all kinds of information. And this is exactly one of the issues that i worry about as China progresses. To the west, the internet stands for the free flow of ideas and knowledge. To the Chinese Government, the internet can be succesfully controlled and regulated, and they will continue to do so, and without compromise. You see, it is a western view that 'open' societies are good, and 'closed' ones bad. If you come to China, you will realise that the Chinese values today are deeply anchored in the Chinese people's hearts, stemming from a monumentally long history, and they're way of seeing things is entirely different. Now the significance of this, is that whiles China does not represent the world's view of things, and fair enough, if you discount my view that China will start influencing other nations, we can't ignore the fact that China happens to have 20% of the entire world's population, and have a very good chance at becoming the world's largest economy within the next 50 years. They are presently the third.

    Now we have not even considered the implications of having such a large economy. We all know the territory that comes with being a large economy (i.e japan), and now we are talking about what could be the largest (i.e united states, at present). They're films will start being more widely viewed, they're television programmes aired overseas, they're food more widely eaten, they will host the olympics (already done in fact) etc .. and through all of this, their culture and views will have many outlets for distribution. And one of their views is that the internet should be policed, information controlled, sites prohibited etc ..

    What has happened with Google and China in essense is this. Google's model of a free and open internet that spans the globe, can never work, because China will continue to police their internet, and they are 20 percent of the world. Whats worse is that China also happens to be the worlds largest internet market at the moment.

    With regards to the ways in which China is progressing, well, the cheap consumer goods are not the only thing they have going for them. Shanghai and Beijing are chock full of venture capitalist, investors etc … With a billion people, in a developing country, people are becoming millionaires overnight, and this in turn draws more money to be pumped in. All people have to do is see what has worked for the world, and introduce it to China. The Chinese market itself is big enough to create demand for any product or service, they do not even have to worry about exporting in many cases. Once was the case where American firms were acquiring Chinese start-ups etc .. but now the Chinese are going out there and buying things up. (please read a post i wrote in reply to someone on this site, with regards to the situation in China at present)

    What i'm trying to say is that the free flow of information, acces to information, how closed or open a society is etc … these are all irrelevant because China has succesfully kept a lid on the information flow and continued to improve economically, not showing any sign of falling behind (in any respect). And in a world where economics very much affect global influence, China can possibly change the way things work. i am concerned about a strong 20 percent of the world (all sharing the same view, having the same values and culture), and its impact on the other 80 percent (fragmented into many many smaller seperate and invdividual nations, who often do not share the same views, and definately with diff. cultures).

    This dialog is possible, I am currently in Shanghai.

    previous reply :

    U are deluded if you don't think China will have the worlds largest economy within the next 50 years, or at least have a good shot. Its track record has followed a path that has never been seen before. China has a billion people, how many does russia have. The sheer number of people, organised and unified through communism, all now working in the right direction since the shift to a market economy, is more than enough to justify how big they will be.

    China's economy is now the worlds 3rd largest is it not ? It has grown tenfold in the past 30 years, its predicted everywhere u look that it will overtake Japan. Overtaking the US is a more difficult matter, but they will be very strong competitiors. China is nothing like Russia. Just take a look at the financial crisis. China achieved 8.9 percent for the year, when the consesus was 0 to 5 percent. China has come out of the crisis unscathed.

    Its my view that it will be largest developed country in the near future (within 50 yrs or less) but its always hard to make a forecast. One thing that is for certain is that they will major players on a global scale. Much larger than most people, especially those not involved in anyway in the chinese market, expect. Just a trip down to shanghai or beijing, will skew people's worlds. Its bustling with activity, swarming with VC's, things being built everywhere. Feels like a mini new york. The cashflow is so fast n so great, u dont need to be particularly innovative or smart, just finding a way to be involved is very rewarding. Take the growth capital space for example. It's saturated ! The terms of trade have worsened as a result. In the past u get a 60% discount to ipo, with additional warrants n personal guarantees. Today its 40% discount, no warrants, no personal guarantees. Everyone is pumping money in n there arent enough deals to pump into.