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Google and China Controversy

An incident in early 2010 stemming from Google being the victim of a cyber attack that originated in China.

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Google vs China, Round 1

  • Jan 16, 2010
Rating:
+1

Surprise, surprise! No one here on Lunch writing a review on Google after such a big piece of news hits the market?!


Let’s face it, Google challenging China on its censorship policy… is that really a wise move?
A company flexing its muscle while trying to operate in a foreign environment?
I don’t know about you, perhaps freedom of speech is of utmost importance to the Americans. We know all about Americans and western world’s ideal of human rights & freedom (although plenty of times it’s been known that governments do look away when it’s not convenient to do so; as with the Cambodia & Bosnia cases).

 
A case of Government vs Business: They don’t mix.
One is operating within another. Without a country, a business will not thrive. IMHO, politics and business do not mix. Laws are regulations made not for business but for the smooth functioning of a country. It’s a framework, it will not changed because of a foreign institution. It might one day change when its people feels it is time to (& normally it will come after a revolution; in this case, I don't see the Chinese people heading that direction!). It is not that the Chinese do not have freedom of speech at all (as some media may try to portray), it is a case of responsible speech that is required of each individual, as with the case in Singapore too. 

Logic
Google wishes to challenge that framework will result in it at the losing end of the deal. It’s a case of winning the battle but losing the war. Leaving China will not improve human rights in China (If that is indeed what it is all about! ;-)). At least if it had stayed, it would have improve its bargaining power over time.
 
For now, from history, the Chinese government has never bowed to external pressure, not from other countries, let alone from a business entity! The only time it did was the Opium War which resulting in giving up Hong Kong & Macau for a century. That is a lesson the Chinese has learned well! I would predict that for the Chinese government, It shall be a case of out of sight, out of mind where Google.cn is concerned.
A negative move for Google.cn. Positive result for Baidu.com (the main Chinese search engine which has the largest percentage of internet users to begin with).
 


 
Don’t get me wrong. I love Google as a search engine (as with Chrome, Gmail, Picasa & all thing Google); although I should qualify by saying I use only the English version of Google search.
What we are seeing here is not that you can’t access Google.com from China. Granted, China blocks site like YouTube & FaceBook but other than that, many sites I visited can be accessed from within China. What it means is that if Google leave China, that translates to Google.cn not in operation.

One can still access everything in English on Google.com, just not Google.cn simply because Google leaving means Google is giving up its Chinese search engine. I personally do not think China loses much at all. Baidu.com is as good if not a better Chinese search engine!
Google has a lot to lose! For the Chinese users, some might even see it as a lack of fighting spirit as it’s only after Google has been hacked that it is talking about leaving! In other words, is Google not even good enough to safeguard its own system?!?!?! Afterall, China is not the first or only government to filter into another country’s system (for spying or whatever purposes). American government does that all the time! I don’t have to know that for a fact, it’s all over Hollywood movies! ;-) In any case, can you really trust what the media is telling you? Or companies? Or governments? Granted, some, but not all & everything!
 
Everyone has his/her agenda in life; as with a country & a company. There are more than what meets the eyes as far as I can tell. One thing though, Google is not that profitable in China. That is a fact. It might just be a business decision for all we know! Or there might be further developments from here…

The sums
From the financial perspective, I wonder how Google shareholders will react to this piece of news? And what about its Nexus One sale & all other androids sale in future?  Does Google really intend to lose its market share which it had spent time cultivating simply as a defiant act? Makes me wonder what is really happening here! Anyone can shed some light?

Google vs China, Round 1 Google vs China, Round 1 Google vs China, Round 1 Google vs China, Round 1

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January 22, 2010

Lunch can be a refreshing change of pace from many other opinion sites that display thoughtless comment posts in which invectives are hurled at both sides of an issue.

That being said, I don't think the discussion about Google and China should be so trite. I can't believe that some would use this as an opportunity to engage in cultural relativism, and compare the West's long history of violence with China's current predicament. It would seem that many China apologists believe they can list any example of the West’s violent history in order to absolve China of any wrongdoing, no matter how insidious.

Rhetorical gamesmanship used to work better when China was not very powerful. But that is no longer the case. China will soon pass Japan as the world 2nd largest economy. The time for pretending China should not be held to the same human right’s standards as the rest of the world are long gone.

The only reason why more countries and more companies do not publicly chastise China, as Google as done, is purely because of money. That is the only reason. China represents the largest untapped foreign market and the largest potential for corporate growth. But it takes a very cynical person to worry about what Google’s shareholders will think while Google is making a principled stand for freedom of speech.

Really? What will the shareholders think?? If that argument doesn’t fully reveal that this version of capitalism is completely morally bankrupt, I don’t know what does.

What would the shareholders think if a company pollutes and poisons the drinking water of a nearby town? What would the shareholders think if the company was to stop creating such lucrative, but dangerous products because the risk to children was too great?

What would the shareholders think if the company, after submitting to years of heavy-handed government-directed censorship, after discovering a massive cyber-attack on their proprietary servers, after finding out that the hackers were trying to uncover political dissidents, after determining that the only “laws” this government follows are the “laws” that it fabricates in order to consolidate its unquestioned power, that this company were to suddenly develop a conscience and want to review its complicity with censorship?

The shareholders might not care. But that is not the point. The citizens of a government should care. And not just the citizens of the government who are allowed internet access to spin censorship issues in the government’s favor.

The United States has had a long and difficult relationship with free speech. It wasn’t always so clear how the government, and the government’s most fierce apologists, felt about it. But by and large, free speech is favored by the minority (or the powerless) and feared by the majority (or powerful). And typically, any restrictions on free speech are created to stifle an open discussion on an issue. Oppressive governments will argue that censorship will keep the general populace safe because the government would only censor material that would be harmful, right?

Opinions like that are dangerously naïve or capriciously cynical. Either way, the whole point of free speech is that sometimes you’ll hear something you disagree with; and that’s often a good thing, because then someone won’t be able to stop you from speaking when they disagree with you.

I'm sure my email will be hacked by tomorrow.

 

January 23, 2010
Thanks for your comments. As much as most of the people in the western hemisphere like to believe, free speech is NOT a priority in a Chinese or Asian society. We, unfortunately, don't even have that much free speech at home! I can attest to it. Arguing for one will not resolve the problem, ie. relationships will only get worse, not for the better. There are many people in this part of the world who did not grow up thinking it is his/her right. Having said that, we are fighting for it, step by step & bit by bit. It is hard pressed to expect a country which has only opened its door in the past 30 years to be totally free simply because it has now become the 2nd largest economy. What America took a century or so to attain will not be accomplished in such a short period of time. Another generation, perhaps! Not today and not Google. Now, if censorship law is indeed the issue, Google knew this long ago. From another perspective, one cannot demand China to change its law simply to suit a company. That's my take on it. To do so will be to interfere in politics. I'm not into politics talk and won't be a good person to have a discussion about it. As for capitalism, is it not the American companies that had been offering businesses to China & thereby making it the 2nd largest economy in the world now? And then holding it accountable for the same human rights standard? Why? Was that the prerequisite to begin with? And how is capitalism not an argument then? Until America as a whole decided against doing businesses with China, I'm not convinced that free speech is indeed what it is all about. Sadly, it is not democracy or any political ideals that rule in the world. At least the world I know about and live in, capitalism rules. One cannot even get into American soil without the required amount of $$ to sustain your stay there!
 
January 18, 2010
It is a fact that the West and its media enjoy portraying China in a negative way. It's getting too much, and I'm sick and tired of it all. For example, if China trades with some African countries, the West complains. If China uses its own laws to settle its own internal affairs, the West complains. If the Carbon Footprint of only one American or European equates to that of 500 Chinese, the West will still complain. Let's face it, it's all jealousy. In the West, envy and malice are often hidden behind 'Human Rights' slogan. Well, before we condemn China too much, let me mention that with Holocaust and Slavery in our history, we in the West are not as saintly as we would want to claim. Also, I'm still ashamed of our Human Rights records in both Iraq and Guantanamo!
January 19, 2010
After the Iraq war and the last decade, I simply do not like hearing about human right issues claimed by the American government. I think that has been exploited enough. Thanks for your comments, Steve. It is refreshing :-) In the new era, I personally don't think blaming whichever party is going to prove to be useful. There are many people who travel around the world now and they can form their opinions about things and not simply believe anything the medias try to portray. At times, prejudices take time to change and us humans too. I have read in books that America is not well prepared for the future in terms of education and hence that will eventually translated to future jobs problems. Personally, I do believe the shift of power may have begun and no one in the west will like that. It is time for the government to look at that instead of simply blaming and fighting.
 
January 18, 2010
Sharrie, this is a really great piece of insight. I always appreciate getting another perspective on topics, especially when that perspective is outside the American one which is often the only one I'm privy too.
January 18, 2010
Thanks, Jordan! I understand the American viewpoint. Afterall, I did live in Canada for a few years & watched CNN all my life! However, there are some issues media likes to omit just to cater to its audiences. However, after living in China for 2 years, I do feel that it is not as what we choose to think (outside China) or what the media had claimed that is the reality. Of course, there are many things that can be improved but it's not as if there is no freedom here whatsoever or that people are dissatisfied with their government. For one, I heard more complaints about the government from the cab drivers in Singapore than I do here in China! I have talked to many people, but in general, people are not miserable which we may conveniently choose to believe! 
 
January 17, 2010
The crux of the issue is government sponsored espinoage, not freedom of speech. If you advocate that business and politics do not mix, why condone or marginalize China's action to sabotage Google's systems? Is China seeking to steal Google's Intellectual Property? If doing business in China means compromising one's IP, business will go elsewhere. This is a growing concern with many High Tech companies and why you now see products made elsewhere such as Thailand, Malaysia, Singapore. As for China not bowing to outside pressure other than the Opium Wars, what about the invasion of Manchuria by Russia and Japan?? This will be the start of WW III !!
January 17, 2010
My dear Yubert, if indeed the crux of the issue is government sponsored espionage, then Google would have been considered a threat and as far as I know the way governments function (not only China, but Russia, Japan, Singapore & many other countries, including the U.S.), removal of a threat is in the pipe. It does not matter if you are an individual or a giant business entity, it is no longer allowed to stay in the country. I'm not condoning or marginalize anything, simply saying that as a business entity, Google should not need to protect the activists. However, if it is claiming that China is stealing its IP, aren't the American lawyers the specialists for suing anyone over that? Why not sue then? You are right in saying that business will go elsewhere if that's the case, but I believe that's something that China is not going to compromise over. It's always a common knowledge that home security over business, China will mostly chose it over business. During the Olympics, a lot of businesses were closed simply for security reasons & the government chose to compensate the businesses. As for start of WW III, really? You think so? I doubt it :-)
January 17, 2010
Personally, I think it's a lose-lose situation anyway.
January 18, 2010
Sharrie, American lawyers are skilled at litigating in a legal system that is based on Democratic principals and rights of the individual, unlike China's Socialist "rule of law". Furthermore would Google get a fair hearing if they sued the Chinese Government in a Chinese court? I think not! Perhaps Google should take this issue to the WTO! Google is not seeking "Free Speech" but Free Trade or at least Fair Trade. In otherwords a level playing field to compete in the China Market. But if they have to compete against the government that defines the playing field and also takes an active role in industrial sabotage, how fair is that? Google's strategy by going public with this dispute is to raise the profile of the issue to garner public support which in turn will get the US government involved on a political and diplomatic level. This strategy will be more effective than trying to sue China in a Kangaroo Court. Google is smart! They can do no wrong!
January 18, 2010
Smart they may be. Hubris more like it ;-) The world is not fair and I don't think Google is claiming to be fair. Free trade or fair trade works only if it's a win-win situation. Google should hire some Chinese lawyers who are skilled perhaps? ;-) Anyway, any entity which chooses to have a presence knows the Socialist 'rule of law' (as you so called) before they enter the market. Can't claim to have the law changed simply because they are now in it, can they?
January 18, 2010
Google is smart. Instead of battling the Chinese government in a Kangaroo court, they're battling China the Court of Public opinion where they have a better chance of prevailing. China's economic miracle is based on exports. China knows negative publicity (ie. lead toys, poison dog food) will adversely affect their exports. If China is responsible for sabotaging Google's network system, this will lead to boycotts in the West. China will lose!
January 18, 2010
Agree. I do think it's a lose-lose situation.
January 26, 2010
I do hope Google managed to change the game play. Personally, I just don't think they are going to do it in China. Not this year anyhow. In future, perhaps. Who knows. I just read the two major shareholders have just cut down their stake, by the way (if it's of any interest to you).
January 26, 2010
Wow Sharrie, you're really dialed into Silicon Valley to know that two major Google shareholders cut down their stake. Are you implying this action supports your assertion that Google's threat to pull out of China is bad for the shareholder? And shareholders are getting nervous? Well if it's any interest to you, you couldn't be further from the truth. The two major sharfeholders you cite are actually the co-founders of Google, Sergey Brin and Larry Page. And they have NOT just cut down their stake in Google. They just only announced a long term plan to sell 5 million shares each over 5 years. This represents about 17% of their combined 57.7 million share stake in Google. And due to a dual-class stock structure, they will still have a 48% controlling interest in Google after the 5 year divestiture. Furthermore selling the stock over 5 years will prevent an adverse impact on the stock price and is part of their long-term strategies for individual asset diversification and liquidity,
January 26, 2010
I know it's the founder's stake. That's probably the difference between American and Asian system or mentality. To America, it's good if founders cut down stake (that's what I can only guess from your implication). From an Asian perspective, I know of only major shareholders trying to increase their own stake if they think they are in it for the long term and the company shares represent good value. Like what Li Ka Shing did. I'm not so familiar with Google's liquidity but I'm sure you know best, Yubert! ;p
January 26, 2010
By the way, Yubert, don't try to make me sound like an opposition against Google. I'm not. It's their company and I've got no stake in it. I'm merely trying to provide a different angle to this controversy.
 
January 16, 2010
Great review, Sharrie. Thanks for sharing your take on such a sensitive situation. You brought up some really good, and thought-provoking points. When I first heard this news, I thought, "Good for Google", for taking a stand, but then I stepped back and thought from an investor/stockholder's perspective, how are they going to react?
January 17, 2010
Thanks, Debbie! Knee-jerk reaction is always to think a company great for standing up to the government (be it of any country). However, in most cases, there are more to the eyes than we outsiders are getting in the news. Frankly, I've no idea what's happening behind the scene nor do I wish to know so. Simply reading a piece of news and reading a little more into it since I know that Baidu.com actually command a lot more of the searches in Chinese than Google ever had and that business hasn't been that great for Google.cn. So, a business needs to answer to its shareholders, I'm just wondering how Google is going to account for it. You are not a shareholder of Google, are you?
January 18, 2010
Oh, totally, I can't rush to judgment when I'm only hearing one side of the story. However, I have surfed the net in China before and it's astounding how much is censored, so that's what got me rooting for Google initially.  The whole issue, however, involves much more than Google though, I'm sure you read about Operation Aurora, but this whole thing seems a bit ridiculous.  I am a shareholder of Google, but my stake in it is peanuts, so I'm not too worried about the fluctuations :P
January 19, 2010
Censorship is part of the deal in China all along. Google knew that before it began operations as with most people. Trying to change the rule of the game (when one is in) simply because we have more freedom outside is probably not going to do it. In addition, cyber attacks are everywhere, not just originating from China. If there are more of it from China, it means that the Chinese are getting real smart that they are able to infiltrate the American systems now. That I think is what Google fears. Why do you think we constantly have to upgrade our virus software? Attacks are everywhere, within the U.S. too & I'm sure India with its incredible IT knowledge will also be in the game soon enough (cyber attacks, that is). So, fear it is. Not for Google but for everyone. I don't quite see Google point on this. To me, defend your own system is more crucial than pulling out. What's the point of getting out of a country? Cyber attacks are virtual, no matter where you are, if your system is not good, you'd be attacked!!! Is that not the case?
January 19, 2010
Wrong. I have been able to access all Google services, including the Google chinese search engine for the last few months in China. Your friend is not giving you the correct info, I'm afraid.
January 19, 2010
You're right, cyber attacks are everywhere, and I'm sure that other countries' governments are using Google for the same purpose, too. However, this one was a particularly big and sophisticated one, targeting over twenty big wig tech companies. This was probably what got them so defensive. The fact that the Chinese government was able to do this on such a wide scale was probably why Google decided to take a stand. I don't think Google has taken any action yet, nor has the Chinese government responded. Given China's track record though, I think they're more likely to let Google go than give them what they want...
January 20, 2010
Round 2 is out. Google is postponing Nexus One launch & all Androids sale. Chinese government not bulging & knowing them, they won't. The Chinese government will not want to set a precedent with Google. If they do so, they will have chaos in the future. Google is threatened alright, else they won't even think of involving the American government. Whatever others do is not so important as with Google guarding its own defense mechanism. Running away is not going to help. Google is in the cyber space, attacks come from all corners of the world. For all you know, we may see the beginning of cyber war!
January 22, 2010
Sorry, I burst out laughing when I read that they're postponing Nexus One launch and all Android sales. Seriously, Google? China already has waaay better technology. People may dig Nexus One and iPhones, etc, in the States, but if I brought my iPhone to Asia, particularly Japan, people will probably think, "What the heck is that huge clunker?" Asia already has such phones with these capabilities, only in even more compact form, like foldable screens.  Now I'm not feeling so proud of Google's decision anymore.  In fact, I feel a little bad for them for seemingly not understanding China... That, or they just don't care, which, if that's the case, is cool, too.

Well, at least cyber wars don't involve weapons of mass destruction, so if they really care to duke it out, go for it!  Should be interesting to watch unfold.  Will one side call the other's bluff?  Will they both be stubborn?  Or will this quietly go away?  We'll see.
January 23, 2010
You come often enough to Asia, you know what it's like here. How things function and generally how people think. For all we know, those Androids are even made in China! So, not selling it or not manufacturing it is still a question! Now, I do not engage myself in discussing a topic related to Asia when the person's perspective is from that of America and has not been in Asia (or China for that matter) long enough to know that with or without United States, China is functioning at such. Putting western values or democratic one for that matter on a country that has different system belief is just not going to fit. That's my take on it. And I'm not going into a discussion fighting for something which I know most of its citizens are not ready to fight. One day in future perhaps. Not now. Google is not going to do it for a higher purpose either. It's simply self-defense at best. Capitalism is the name of the game for any business. They are not there to change the world to begin with. Citing that for a reason, well, perhaps only American citizens will believe it; like going to Iraq war.
January 26, 2010
Found an extremely interesting blog on this issue on CNN. Check it out! http://www.cnn.com/2010/OPINION/01/21/zakaria.google.china/index.html
 
January 16, 2010
nice work with this topic, Sharrie! I am eagerly awaiting what else would develop from this..
January 17, 2010
Frankly, as far as I know, those who use chinese search engine normally use Baidu.com and not Google.cn.
 
January 16, 2010
Fine assessment of a very touchy situation. This is a story well worth keeping an eye on as it unfolds in the weeks ahead. Thanks for getting us all up to speed.
January 17, 2010
You are certainly right in saying so, Paul. I'm merely writing some thoughts which I won't even call it a review. Just seeing it from another angle as I think most Lunchers here will think it's good for Google. However, it's never good for a company to lose a huge market share and from a shareholder's perspective, it's a bad deal! Personally, I'd think it's not a case of who needs who but if Google does indeed leave, then it's a lose-lose situation for both.
 
1
More Google and China 2010 Controve... reviews
review by . January 22, 2010
Lunch can be a refreshing change of pace from many other opinion sites that display thoughtless comment posts in which invectives are hurled at both sides of an issue.      That being said, I don't think the discussion about Google and China should be so trite. I can't believe that some would use this as an opportunity to engage in cultural relativism, and compare the West's long history of violence with China's current predicament. It would seem that many China apologists believe …
Quick Tip by . January 23, 2010
A lose-lose situation if Google indeed pull out of China. Is it free speech / is it fear? Does it accomplish anything?Who/ what is at stake?
Quick Tip by . January 23, 2010
An unfortunate situation where no one really seems to be winning. Waiting to see how this will play out.
Quick Tip by . January 23, 2010
so many issues at play with this issue. still trying to wrap my head around it.
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Sharrie ()
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I'm a traveler at heart & have been nicknamed Travel Queen by friends & colleagues alike. Traveling has been my life passion for the last decade or so. As we enter a new decade, I'm excited … more
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On January 12, 2010, Google announced that it is "no longer willing to continue censoring" results on Google.cn, citing a breach of Gmail accounts of Chinese human rights activists. The company found that the hackers had breached into two Gmail accounts but was only able to access 'from' and 'to' information and subject headers of emails in these accounts The company's investigation into the attack showed that at least 20 other companies had been similarly targeted. Additionally, "dozens" of Gmail accounts in China, Europe, and the United States had been regularly accessed by third parties, due to phishing or malware on the users' computers rather than a security breach at Google. Although Google did not explicitly accuse the Chinese government of the breach, it said it was no longer willing to censor results on google.cn, and that it will discuss over the next few weeks "the basis on which we could run an unfiltered search engine within the law, if at all. We recognize that this may well mean having to shut down Google.cn, and potentially our offices in China."

On January 13, 2010, the news agency AHN reported that the U.S. Congress plans to investigate Google's allegations that the Chinese government used the company's service to spy on human rights activists.
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