Google’s Decision to Leave Mainland China Unwise

Google’s corporate development and chief legal officer announced early yesterday morning that “users visiting Google.cn are now being redirected to Google.com.hk.” National Security Council Spokesman Mike Hammer immediately responded, saying that “Google made a decision based on what it believes is best for the company,” and “the administration believes freedom of expression and unfettered access to information are internationally recognized rights,” etc. It has been years since Google entered the Chinese market and started google.com.cn in 2006. Hammer supports Google’s decision to stop censoring search results in China. Before, according to State Department Official Philip J. Crowley, Christopher Hill, the assistant secretary of state for East Asian and Pacific affairs, said that Beijing should give an explanation for the cyber attacks against Google and for China’s censorship on the Internet. This implies that it was China’s mistake that caused Google to leave. But such comments are biased and do not add up with the facts.

Respect Other Countries’ Conditions and Laws

First of all, as an influential multinational corporation, Google must respect other countries’ conditions and laws if they want to invest in other countries. If they try to use the Internet to spread information that is against the government, to distort political facts and to harm other countries’ interests, they are certain to be resisted and opposed by both the government and Internet users. Therefore, Chinese Foreign Ministry Spokeswoman Jiang Yu has responded that China would protect its policies on the Internet and “China welcomes international Internet companies to conduct business within the country according to law.” Foreign Ministry Spokesman Yao Jian said that whatever Google’s final decision was, it wouldn’t affect the overall situation of Sino-U.S. relations because there are many ways for countries to communicate with each other. China’s Ministry of Commerce said that countries that have invested in China should regulate their own companies consciously. Chinese companies also face a lot of issues in law, religion and customs in overseas markets, and the Ministry of Commerce is working on the improvement of regulations for Chinese companies overseas. The U.S. should also set guidelines and constraints for companies overseas, including Google and other companies in China.

It is a great loss on Google’s part to leave China. First, according to analysts from the Susquehanna Financial Group, Google, the world’s largest Internet search engine, may stand to lose $5-6 billion in advertising income before 2014 due to its exit, given the context that the Chinese online advertising market’s income would increase to $15-20 billion, and Google would still hold nearly one third of the market share by that time. Second, as of December 30, 2009, China had 346 million Internet users, with an annual increase rate of 28.9 percent. What’s more, the structure of China’s Internet users continues to be optimized. 346 million people (or 90.1 percent of internet users) now have access to broadband, a 76 million increase over 2008. That said, China still lags far behind developed countries in broadband access speed. It is unwise of Google to leave China since it has huge market potential.

Most Foreign Companies Are Self-Disciplinary

The White House is politicizing the Google-China issue and trying to spread the idea that it is “insecure” to invest in China. But the fact is, by 2009, China’s utilization of foreign investment has reached more than $1 trillion, and China has approved 660,000 foreign companies to invest there. Google is only one company with millions of dollars, which is like a drop in the ocean. Of the world’s top 500 enterprises, 480, or 95 percent of them, have entered China. Since the economic crisis in 2008, many multinational companies have suffered greatly. But many foreign companies in China are still stable and enjoy good profits. Therefore, politicizing the Google-China issue is certain to be unpopular.

China’s demand that foreign companies be self-disciplinary in China has received positive responses from most foreign companies. Global software giant Microsoft CEO Steve Ballmer emphasized on January 14 that Google’s decision to no longer filter Internet searches objectionable to the Chinese government was an irrational business decision and, “if the Chinese government gives us proper legal notice, we’ll take that piece of information out of the Bing search engine.” The second “Multinational Companies to Grow Together with China” forum took place in Beijing on January 15, and nine multinational companies have established a “Multinational Companies and Good Residents Club.” They are calling for multinational companies in China to base themselves in China and be good corporate citizens. This is in sharp contrast with the American government’s negative response to “have greater scrutiny” for China’s bilateral trade due to Google’s threat.

Last but not least, Baidu, the mainland search engine, has also suffered from cyber hacker attacks, leaving Internet users in Bejing, Liaoning, Jiangsu, Sichuan, Anhui, Huibei, Guangdong and many other places to see “Yahoo error” when they visit Baidu’s Web site. Therefore, Google’s behavior — using the excuse of “cyber hacker attacks” to criticize China, announcing that it would stop the “filter review” in mainland China and redirecting its search service to the Hong Kong site — is completely wrong.