Should American Government Intervene in the Google Incident?

Integrity should be a core value of any company. Strict enforcement of integrity is paramount to ensure a company does not short sight itself with short term benefit and forgo long term viability. One example of such companies is Google.

Google’s core values are deep rooted in American cultures, which differ greatly from the Chinese ones. Like many companies from western countries, Google needs to make necessary adjustments to adapt to Chinese cultures and values.

Chinese companies faced the same hurdles when trying to make inroads to the American and European markets. Adjustments have to be made in order to survive. It’s like an ancient Chinese saying, “One has to follow the local rules when visiting the rural villages.”

Google China’s contents lagged behind Baidu’s since it first entered the Chinese market. The shortcomings were due to its lack of cultural understanding. The operation was further handicapped after Kai-Fu Lee left Google China.

Faced with declining operating performance, Google announced that it may decide to withdraw from the Chinese market. While a company is free to formulate its own market strategy, this announcement has drawn the attention of those in the American government. Huanqiu reported, “In a Senate hearing on Jan 13th, many senior senators from both the Republican and Democratic parties expressed concerns about Google’s possible withdrawal from the Chinese market.” American Secretary of State Hillary Clinton also made her strong opinions known.

Many people who embraced free market economy ideology were confused by the voice of concern. U.S. government should have no influence on a private company’s decision. A direct government intervention would be unfair to Google’s competitors. It’s unavoidable for companies to have ups and downs, and some companies inevitably fail to survive a down cycle. Google deserves no special treatment from the government.

Google’s plea to the American State Department is not justified. In the event that Google succeeded, it could open a floodgate of U.S. companies seeking intervention when faced with difficulties in foreign operations. This brought back memories of Chinese state-own enterprises in 1980s. When the goings got tough, state-owned enterprises often sought the government’s help.

In the age of the Internet, it’s impossible for Google’s search engine to completely exit the Chinese market. Chinese users were already using Google before it officially set-up its operation in China. The main reason for Google’s Chinese operation was to further tap into the gold mine of the emerging Chinese market.

As the American economy starts to turn around, there is temptation to practice trade protectionism. But let’s not forget that by setting a precedent, many more companies could emulate and seek government intervention. This could burden the U.S. government. More importantly, such practices violate the very core idea of American style market economy.