With the infiltration of Google customers’ email accounts, allegedly from the Chinese authorities in search of information on human rights activists, Google said it would pull out of China. But doesn’t Google employ the same data mining surveillance services itself?

David Drummond, Google’s chief legal officer, announced on its official blog last week, there is to be “a new approach to China”, which means, we want out. What the ultimate outcome of this furore will be is not yet clear, but according to sources China is said to have persuaded Google to stay on and announced that: “Beijing is trying to persuade Google to stay and give up plans to pull out its Chinese version from the country.”

On the same blog, Google said: “Like many other well-known organizations, we face cyber attacks of varying degrees on a regular basis. In mid-December, we detected a highly sophisticated and targeted attack on our corporate infrastructure originating from China that resulted in the theft of intellectual property from Google.” Therefore, we quit? That simple? Not quite.

China’s foreign ministry said last Thursday that: “China welcomed international internet companies to conduct business within the country according to the law”. Well, that’s all well and good if the Chinese authorities are protecting users from viewing porn and overt sedition but the assumption of the foreign Press has been that the hacker attacks were orchestrated by the Chinese government to carry out investigations against human rights activists.

That sort of practice is, of course, unacceptable to us in the West, but doesn’t it smack of hypocrisy? There’s something awkwardly deceiving about Google’s moral stance on China when its corporate motto “do no evil”, an anachronism now but perhaps a catchy shibboleth in its time, is an almost obscene declaration of double standards while it retains data mining to service ad revenues, coupled with surveillance, digital profiling and personal intrusion.

Getting ever more involved, the issue has now become politicised, with the US government saying it will lodge a formal complaint with Chinese officials to express its concern about cyber attacks on Google’s Gmail service in China after Google announced it will no longer censor its content.

In the spirit of appeasement, China Internet Network Information Center, another official agency, said on Saturday that the number of internet users had reached 384 million by the end of 2009, a 28% jump in one year. In January last year, China also issued 3G licenses to major telecom operators, resulting in a massive hike in internet users. Now, around 8% of all internet access in China is through mobile phones, and growing exponentially.

Google is also apparently in trouble for copyright theft of Chinese writers without obtaining permission. Add to this the valid criticism by censors for allowing its site to be used for the distribution of pornography: Google should know better than to let that type of content through in China.

According to Techcrunch last week, “Google has had more success in China than a lot of other big Valley names, but [it] isn’t and will likely never be the market leader…Valley elites erupted into applause on Twitter and blogs saying Google was showing more backbone than the US government and was a model of integrity for the world.” Moral integrity and Google? A non-sequitur if there ever was one, surely?

But perhaps there are other factors at play: Google was not making a lot of money in China and played second fiddle to Baidu; and it was never going to make any substantially increase in its market share. Maybe economics was at the forefront of its decision, as last year China accounted for just under 1-2% of Google’s US$21.8 billion revenue.

This is not just a Google issue though: all foreign media companies have found it very difficult to penetrate the Chinese internet market; they make only modest returns. What the backlash may be within the country and without is yet to be revealed, but media censorship is deeply unpopular, even with the Chinese people themselves, and some have suggested  that if Google goes ahead and pulls google.cn, the Chinese may yet stage protests against the government, citing Google as the catalyst.

One statement I read that came out of Google’s statement of intent was from Warren Cowan, CEO at Greenlight, a UK-based search engine marketing agency, who told TechNewsWorld: “China doesn’t need Google as much as Google needs China . China’s got the sophistication, the strength and the will to do whatever it wants.” Not so, methinks, or China would not have held out the olive branch this weekend; the “need” is perhaps better described as mutual.

But surely there must first be some resolution between Google and the Chinese authorities, as blocking access to sites such as Blogger, YouTube, Facebook, Twitter and millions of other “undesirable” websites, is excessive use of their censorship “laws”. It was perhaps the hacking attack on Gmail that was the last straw.

The Chinese are still very sensitive about images of Tiananmen Square, the footage of Chinese police beating up Tibetan monks and the social unrest in Qinghai. It was these scenes that prompted the shutdown of foreign social-networking sites. Also, the scare of the footage on Twitter about the Iranian election protests saw them further retreat into their protective shells.

All this, together with the political overtures of President Barack Obama’s sharp slap on the wrist in his thinly-veiled criticism of Chinese internet censorship during his recent visit, and that the US is to receive the Dalai Lama and to sell arms to Taiwan, doesn’t exactly aid Google’s cause.

Of course, there is also the argument that whether or not Google leaves China, the Chinese have become adept at circumventing these Orwellian blocks to foreign websites with the installation of “virtual private network” software.

But let’s look at some social and economic perceptions of the international press: it has recently taken up the mantle of China’s economic ascendancy on the world stage and of its future dominance. But there are negatives in this narrative. First, intransigence was China’s hallmark during the recent climate change talks in Copenhagen which turned to condemnation; and there has been an international outcry about the jailing of a human-rights activist and the execution of a mentally disturbed British drug-smuggler.

China’s strongest asset, its booming economy, has also been damned by many a reliable source, with one describing it as “Dubai times 1,000, or worse”. According to the Economist, “China’s smooth ascent is exploding because its economic miracle has proved partly illusory. In fact, China’s government may be right to see the economic gloom as in part wishful thinking from outsiders repelled by its repressive political system… China is no Goldilocks economy. Bank lending is growing too fast, which may be fine if it is flowing into useful investments, but not if it is fuelling asset prices. The risk of bubbles and excess capacity will grow unless policy is tightened soon.”

Analyses have drawn a mixed crowd: there are those that think Google is morally right to withdraw from repression; others view it as financial suicide; others still see China’s ascendancy on the world stage as an entity it simply must engage with at whatever cost.

But let’s look at a few excerpts of Will Hutton’s “China, the West and the Credit Crunch”, regarding this new utopia: His lecture reversed some common expectations that the 21st century belongs to China and asserted that its extraordinary growth has been taken out of context. He contends that China’s growth offers no new paradigm for development, and its success is based solely on high savings and low-tech manufacture, having come about as a consequence of its One Child Policy, which effected a phenomenally high savings rate of around 40% as means to ensure old age financial support.

The other point to mention here is Chinese businesses mask pervasive state control. According to Mr Hutton: “Of the 1,105 enterprises floated on the stock exchange, 81% are actually state controlled; of the 6,000 restructured state-owned enterprises, the members of communist party committees have become non-executive directors in 70%.” These figures go a long way to explain Google’s and other multinationals’ treatment by the state.

And talking of economic growth and what the board of google.cn might have realised is, as Mr Hutton states: “…economic growth requires an educated and productive workforce, discerning consumers, property rights and the capacity to innovate. A telling statistic is that China currently accounts for only 0.1% of international patents.”

To conclude, this appears to be a Mexican standoff, with reports that Google’s China operations may be “officially terminated” in February, leading the Chinese government to block the company’s main site, according to Credit Suisse Group. But their decision to withdraw should rather be a precursor in raising a meaningful dialogue with the Chinese authorities. If not, who else is to contribute in becoming a “key enabler of a better-informed world” in China?

The West has a lot to learn from the Chinese and vice-versa, but it will not be an easy task while the Right continue to hold political and economic sway in the country. Although Google will hold more talks with Chinese authorities “in the coming days”, it would also do well to remember its own fuzzy logic: don’t be evil; in other words, be up-front about what personal data you collect. People in glass houses, and all that…

If it does eventually go sour, the biggest losers in this fiasco will be Google and China; both would lose face if the withdrawal proves to be true, with China deprived of Google’s innovation, international visibility and respect and Google’s visible global hand will be impaired.
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John Sylvester is the media director of V9 Design & Build (http://www.v9designbuild.com) and an expert in search engine optimization and web marketing strategies.
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Google squirts water-pistol at China’s Great Firewall amidst hypocrisy
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