US, Google, and PRC Censorship of the Internets

♠ Posted by Emmanuel in ,, at 6/26/2009 10:51:00 AM

The Tony Award-winning musical Avenue Q, a parody of Sesame Street, has a memorable song declaring that "The Internet is for Porn". Above is the music from that song set to World of Warcraft video game imagery. What brought it to mind are China's latest initiatives purportedly targeting the spread of mind-polluting pornography in the country with the world's largest base of Internet users. At first, authorities had little computer cops trundling across your computer screen whenever you visited forbidden sites. With the 20th anniversary of Tiananmen passing without much incident, PRC leadership appears to have been emboldened in asking for others to comply with more draconian censorship measures, such as American computer software and hardware providers.

Those who are skeptical-minded, like yours truly, see this initiative of targeting porn as a Trojan horse for more intrusive censorship should it become necessary. Certainly, events in Iran--especially the use of YouTube and Twitter to foment protest--are not dissuading apparatchiks keen on keeping a lid on dissent, I mean, "porn." So I bring you two stories, the first of Google being caught up in the censorship debate and the second of ongoing US efforts to scuttle the installation of nannyware in computers sold by Yanks in China.

Let us begin with Google. This company has uniquely hamstrung itself due to its motto of "Don't Be Evil." Interpreted literally, the firm ought not pay attention to the Chinese government's efforts to toe the line according to its wishes. In the past, Google has famously acceded to government intervention in order to ply their trade in the Middle Kingdom. During recent days, Google services have been beset by mysterious outages that many observers take as not-so-subtle hints of displeasure from the Politburo's minders. From Reuters:
On Thursday, a Chinese official accused Google of spreading obscene content over the Internet. The comments came a day after, Gmail and other Google online services abruptly became inaccessible to many users in China. Analysts said the service disruptions are unlikely to have major financial repercussions on Google given its presence in China, but may prompt the company to tweak its operations in the world's single largest Internet market by subscribers.

"China itself is a rounding error for Google. It's a high growth opportunity for them, but it's not a major contributor today," said RBC Capital Markets analyst Ross Sandler. Google, which gets 52 percent of its revenue from outside the United States, does not divulge China-related income. Sandler estimates Google's annual revenue from China at $200 million to $300 million, or about 1.4 percent of the $21.8 billion in revenue the company recorded in 2008.

"There's a lot of volume in China, but the monetization of the traffic, the online advertising, isn't as far along as it is in U.S. and Europe," said Richard Fetyko, an analyst with Merriman Curhan Ford.

Google's share of the Chinese search market lags Baidu, the country's home-grown Internet powerhouse which analysts believe has upwards of 60 percent market share. But with more than 200 million Internet users, China represents a market Google cannot overlook. "It's an important growth region for them," said Fetyko. "So they can't just ignore it and walk away from it."

The Chinese government has not acknowledged whether it had a hand in the recent Google service outages. Google said it is investigating the incidents but would not comment on whether it has had any contact with Chinese authorities.
This leads to important corporate social responsibility questions that Internet providers would prefer to avoid--as I would if I were in their shoes, actually:
That pragmatic approach is common among U.S. Internet companies doing business in China. On Thursday, Yahoo Inc CEO Carol Bartz answered a question about Chinese censorship at the company's annual shareholder meeting by saying that Yahoo was not created to "fix China"..."We have worked better, harder and faster than most companies to respect human rights and try to make a difference," said Bartz. "But it's not our job to fix the Chinese government."

Given the longer term importance of doing business in China, analysts said Google is now likely to figure out how to stay in the good graces of the Chinese authorities. "There's nothing that Google can do to get around it but make peace with the Chinese government," said RBC's Sandler.
There is an oft-repeated truism that the development of media is partly drive by, well, porn [1, 2]. Hence, unbelievers like me would point out that the PRC's intention is not really so much preventing porn but of information dissemination. Chairman Wen, pay heed to Avenue Q.

Next, we have more developments in the case of China trying to install truly vile software into the wares of US computer sellers like HP and Dell, making these firms ask for US action on their behalf [1, 2]. Requiring software that fouls up machine operation is a non-tariff barrier any way you cut it. My earlier inklings that this episode could foment a full-blown trade case have been realized as the following Reuters article suggests. In any event, it's a pretty stern test for the newly beamed-up US Trade Representative, Ron "Cap'n" Kirk:
The United States still hopes it can persuade China to abandon, or at least delay, its plan to require controversial filtering software on new computers, despite growing trade friction over the issue, a U.S. trade official said on Thursday. "The U.S. government will remain focused on the problem and use diplomatic and other available means as necessary to resolve it," said Debbie Mesloh, a spokeswoman for the U.S. Trade Representative's office one day after top American officials urged Beijing to drop the plan.

China's Ministry of Industry and Information Technology said on May 19 that all personal computers sold in China must have the "Green Dam" Internet filtering software as of July 1. Chinese officials said the filter is necessary to prevent children from having access to pornographic websites.

But critics say the software, sold by Jinhui Computer System Engineering Co, is technically flawed and could be used to spy on Internet users and to block sites that Beijing considers politically undesirable.

U.S. Trade Representative Ron Kirk and Commerce Secretary Gary Locke urged China in a letter on Wednesday to abandon the plan, which they said would mean U.S. companies would be required to preinstall software "that appears to have broad-based censorship implications and network security issues." They objected to the short six-week notice that China gave for the new requirement and said there were complaints from global technology companies and media groups about the software.

If unresolved, the issue is likely to be a sore spot in upcoming U.S.-China meetings, including the Strategic and Economic Dialogue planned for late July, the Joint Commission on Commerce and Trade this autumn and meetings between President Barack Obama and Chinese President Hu Jintao around the Asia-Pacific Economic Cooperation summit in November.

Locke and Kirk also hinted at a possible case at the World Trade Organization, but those can take years to resolve. One U.S. industry official, who asked not to be identified, said the Obama administration seemed to be emphasizing commercial concerns over the human rights aspect of the issue because China was more likely to respond to that.
You...up against the wall, cyber-comrade! Another trade spat is likely in the offing if China doesn't back down from this nonsense.