A couple of months after Google bid adieu to China due to the so called “Great Firewall of China,” Microsoft have made a policy of tolerance clear to all. Steve Ballmer said that Microsoft preferred to stay in China and solve Internet censorship issues through dialogue instead of fighting against the host country’s policies. Ballmer thinks this could be a more productive approach. Human rights groups have opposed China’s policy, but the country has refused to budge. What’s all the fuss and noise about?
Each country has its own Internet policy and China’s rigid policy seems to have irked many. China has clarified that the Internet within its borders will be regulated according to the country’s policies. China has developed a Whitepaper defending its policy to censor the Internet. China reasons that illegal information regarding matter such as state security, public interests and childrens’ affairs should not be available to the general public in China.
The Internet is regularly filtered in China for certain keywords, and websites are blocked based on this. Popular websites such as Facebook, YouTube, Twitter, Flickr and Hotmail are also blocked in China. The Chinese government has also reportedly asked local PC makers to install software call Green Dam, to help with censorship efforts.
With more than 400 million web users, China has a huge online market. The Chinese market is also unique in that it has a dominant local search engine unlike other countries. In spite of its international standards and market share, Google has been way behind its Chinese rival Baidu, with a market share of 33% in China compared with 63% for Baidu. The decision to pull out of China was critical for Google since China’s Internet ad market is projected to rise from the present USD 3 billion to about USD 15 to 20 billion by 2014. This would have meant USD 5 to 6 billion of business for Google if the company had stayed in China.
Google went public with its grievances, bringing the censorship issue into the limelight. Google also alleged that their source codes were stolen by Chinese hackers. International agencies such as Amnesty International have appealed to the Chinese government to reconsider Internet censorship. Roseann Rife, Amnesty International's Deputy Asia-Pacific Director, said, “…It is also a welcome move that the company has highlighted the need for people to have access to uncensored information. We hope other corporations will also challenge the government of China over their censorship policies." Other companies are not expected to follow in Google’s footsteps, however.
The censorship issue raised by Google has also gave rise to apprehension that Chinese business environment may become unfavorable for foreign companies. The United States is investigating the possibility of la egal confrontation with China. The country wants China to amend its policy in favor of foreign companies. While the Chinese government’s policy may seem to protect local business, in the age of collaboration, a relaxed business atmosphere will be more beneficial for both parties.
Take the case of the Chinese shanzhai for example, their innovative gadgets could benefit from acquiring intellectual property from foreign companiesto give them a more universal appeal. While the aggressiveness in marketing and the design talent of the shanzhai is well known, collaboration could be the key to entering into tougher markets. Another hurdle for foreign companies in China is the threat to intellectual property. China is reportedly losing its charm due to the high level of piracy in the country. If China can safeguard intellectual property, there will be an increased flow of intellectual property to China.
With respect to Internet censoring, China is not the only country which filters content. Others like Saudi Arabia, Pakistan, Iran, Cuba, and Burma also block content considered unfavorable by the government. In most of these countries, it is even difficult to raise an objection to Internet censorship, let alone refuse to cooperate. Those countries have their own laws of the land and foreign companies and their respective countries don’t seem to think it is their business to interfere. The reaction to China’s censorship could be due to the reasoning that there is scope for dialogue. Microsoft’s policy may well work to the advantage of both parties in the long term.
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