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Google’s China Troubles Continue; Congress Examines U.S. Investment in Chinese Censorship

In his latest blog post, Google’s Chief Legal Officer David Drummond reports that Chinese authorities aren’t happy with the automatic redirection of Google.cn to Hong Kong. They are threatening not to renew Google’s Internet Content Provider license, which is required to legally operate any kind of Internet business in China. In an attempt to thread the legal needle, Drummond says Google.cn will now lead to a landing page which—if you click anywhere on that page—takes the user to the uncensored Google.com.hk. This is Google’s convoluted way of adjusting Google.cn so that it remains technically in compliance with Chinese law while still sending Chinese users to an uncensored site. Now they just have to click through an extra page to get to the results.

It’s unclear whether this will be acceptable to the Chinese authorities. It really depends on how secure or insecure they’re feeling these days. In the meantime, the new landing page is a signal to Chinese users that they may want to remember Google.com.hk just in case Google.cn ceases to work, or update their browser bookmark.

What will happen next? Any one of four scenarios is possible:

1. The Chinese government renews Google’s ICP license and Google.com.hk remains unblocked. Google.cn remains just a landing page which sends users to Google.com.hk when they click anywhere on the page. While Google.com.hk remains unblocked, though specific searches containing sensitive words will continue to be blocked. Nothing has changed except that users have to click through an extra page before they can start searching.

2. The Chinese government renews Google’s ICP license but blocks Google.com.hk. People can get to the landing page via Google.cn, but after clicking on it they get an error message in their browser. Users who don’t know how to use circumvention tools will no longer be able to continue accessing Google’s uncensored search (unless they know to go to Google.com which as of now, I believe, remains unblocked).

3. The Chinese government does not renew Google’s ICP license but does not block Google.com.hk. Google.cn will no longer work. Chinese Internet users will be able to access Google.com.hk if they happen know enough to type a different URL into their browser.

4. The Chinese government does not renew Google’s ICP license and also blocks Google.com.hk. In this case, users will only be able to access the Hong Kong-based uncensored search if a) they know about the Google.com.hk URL and b) know how to use proxy servers or circumvention tools.

Which one do you predict? Let me know in the comments section if you’d like.

Meanwhile, it just so happens that tomorrow the U.S.-China Economic and Security Review Commission will be holding a hearing on “China’s Information Control Practices and the Implications for the United States.” I’ve been asked to testify on Baidu’s role in China’s Internet censorship system and the role played by U.S. investment in Chinese Internet censorship. My written testimony can be downloaded here (PDF).

I begin by describing China’s recent political innovation which I call networked authoritarianism. I then explain how the private sector in general—and Baidu in particular—fits into this system. I discuss the impact of Google’s withdrawal from China, then conclude with some comments about the role of U.S. investment. Here is my conclusion:

The question is: Even as government censorship requirements grow increasingly onerous, dominant players solidify and expand their market positions at the expense of smaller upstarts, and the frustration of many Chinese Internet executives grows, will anybody in the Chinese business community dare to challenge the government policies and practices that have caused this situation? Or will they continue to feel that they have no choice if they want to continue making money?

As I have described in my testimony, the Chinese government has transferred much of the cost of censorship to the private sector. The American investment community has so far been willing to fund Chinese innovation in censorship technologies and systems without complaint or objection. Under such circumstances, Chinese industry leaders have little incentive and less encouragement to resist government demands that often contradict even China’s own laws and constitution.

Two of Baidu’s five Directors are American. U.S. investors provided much of Baidu’s startup capital. U.S. institutional investors own significant stakes in the company.To be fair, American investment dollars support many businesses around the world that human rights groups and environmentalists have identified as unethical or destructive to our health and our planet. Yet in the wake of the financial crisis and the BP oil spill, it is also clear that millions of people around the world are paying an unacceptably high price for unethical—or at very least amoral—investment practices. We will not see the end of our problems unless industry and investors own up to their broader responsibilities to society and to the planet. I predict that the prospects for freedom and democracy around the world will similarly be diminished if our investments continue to support censorship and surveillance.

For the ethical investor, there are two possible responses to this problem. One is divestment from all ethically challenging situations. The other is engagement and advocacy, using financial leverage to work for positive change in industry practices and even government regulation. Such efforts often require patience and take time to bear fruit, but experience in other sectors such as mining and manufacturing show that proactive, socially responsible investment combined with advocacy and engagement can make a difference over time.

I believe the Chinese people would be worse off if all American companies and investors were to abandon the Chinese Internet. Investors who remain silent, however, should be clear about what kind of innovation they are financing. In addition to whatever product or service they set out to invest in, they are also supporting a disturbing new political innovation: networked authoritarianism.

By Rebecca MacKinnon, Journalist and activist; Co-founder, Global Voices Online

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