February 4, 2010 Jessica Sims
Google vs. China: Understanding Google’s Position

Google vs. China: Understanding Google’s Position

There are plenty of reasons to want a broadband connection, but regardless of the core reason(s) why any given consumer chooses any particular broadband service, there is a near-certainty that virtually all consumers will do one thing at some point: search.  Once surfers learn how to search, a whole new world opens up to them.  A world where images, videos, and ideas can be exchanged, and a great number of these exchanges are facilitated by search engines in one way or another.

Google is the undisputed king of search engines, though there are other competitors.  Being an industry leader is always tough, and being Google is probably not the easiest thing in the world.  In recent years Google has been caught between something of a proverbial rock and a hard place when it comes to their interest in the People’s Republic of China.  The problem is certainly complex, and has recently reached new heights, but it probably helps to understand the problem by understanding Google’s interest in China.

Why Google Wants a Piece of the Middle Kingdom

Middle Kingdom is a fairly common literal translation of the Mandarin-Chinese word for China.  China is, in many different ways, becoming the center of many things, including manufacturing and consumption.  Both of these are reasons why Google has had an interest in China, but that is a gross oversimplification.  In fact, any discussion on China that does not take several chapters is probably a gross oversimplification of such a diverse country and its people.  Lacking the space to go into such details, oversimplifications will have to be used for the purposes of brevity, but suffice it to say that Google’s two main objectives in China are related to manufacturing and connecting people.

Manufacturing is something that Google is not necessarily new at, but the company seems poised to continue expanding its interests in this regard.  After all, it is far easier to sell and finance tangible items, but mind share is far less substantial in some circles.  Furthermore, companies that exist totally based on their mindshare are in serious jeopardy, especially on the Internet where technologies evolve at an alarming pace.

Of course, the counter-argument is that there are plenty of countries that are highly-motivated to provide incentives to companies that want to manufacture there.  This is, was, and seems like it will always be the case, but China has long-since been regarded as a an excellent location to manufacture products, especially electronics.  Being that Google is a tech company, any physical product that they choose to bring to the market is almost certainly going to be technological in nature, and thus China makes a great deal of sense.  That is not to say that China is the only choice for Google, but it is certainly a very logical choice.

Google is not only interested in their own manufacturing, however.  The fact is that Google’s search engine is used to connect buyers and businesses of all kinds, and to that end, Google can serve as an intermediary for Chinese businesses and consumers alike.  Google generates revenue via its search technologies, and the manufacturing base of China is probably indirectly related to the majority of product searches consumers conduct.  After all, what does not have a ‘Made in China’ tag or sticker on it these days?  In some cases the connections are far more direct, such as when businesses search for suppliers or partners of one kind or another.

Another reason why China makes sense is that the country’s middle-class has been expanding at a stunning rate.  In less than half a century China has transformed from a country of farmers and peasants to a technologically advanced superpower that is eager to takes its place amongst the other leading countries of the world.  The scope of such a transformation is all the more impressive because of the billion-plus population of China, the vast majority of which have seen their buying power increase exponentially in relation to that of their parents.  It is this buying power that is also attractive to Google.

Middle class citizens can generate search-based revenue, start their own enterprises, and buy Google products and services.  Any tech company uninterested in the potential that comes with hundreds of millions of highly-brand loyal middle class consumers is in desperate need of a new board of directors, and thus is it no surprise the Google really wants to leave its mark on China.  Unfortunately, it seems as if a series of missteps has led Google to make a few potentially unwise compromises along the way.

Google’s Compromises

Google has had to make a handful of compromises along the long path that the company has had to take to have access to the Chinese market.  Perhaps the most notable ethical compromises are the filtering of search results and reporting of personal data to Chinese authorities.  Both of these require significant understanding of context to properly understand, but one argument is that each government has a right to impose its own rules and regulations on its own populace and businesses that operate within its borders.

It might be easy to point fingers and say that filtering search results is unethical on some level, or that turning information over to authorities who intend to use it to put someone in prison or even kill them is questionable on a moral level, and those are good points.  Are these significantly different than net neutrality laws, or subpoenas to turn over ISP logs for an RIAA indictment of a senior citizen or minor?  The point is that there are many shades of gray to consider, and these issues will be explored from another perspective in a follow-up article.  It does need to be said that Google’s unofficial motto of ‘don’t be evil’ has probably been challenged thoroughly by its experiences in China.

Why Average Consumers Should Care About Google vs. China

One thing that cannot wait for a follow-up is the reason why every single consumer should care about the rift forming between Google and China.  Google and other search engines offer many very enticing possibilities to consumers, but one of the most tangible is the connection.  Businesses connect with businesses to find the best deals, which results in amazing products at great prices.  Individuals connect with individuals for many different reasons, but the understanding that is born from that connection may start to erode the barriers of ignorance that have been at the heart of international conflict for generations; via language tools and power search technologies, Google brings the entire world together.  If ever there was an argument for giving a corporate entity a Nobel Peace Prize, this would seem to be it.

Google’s Concerns

Google’s primary concerns are the ability to operate in an unfettered way in China.  This would certainly include the cessation of cyber-attacks and the removal of state supervision of search results.  At present, the Chinese government requires Google to filter results that the ruling elite deem unseemly for one reason or another.  A company with an unofficial motto of “don’t be evil” may find these restrictions too selective and self-serving, and they may have a point.  Additionally, foreign companies operating in China have long since reported a laundry list of complaints ranging from government agencies and regulators targeting them with laws to the exclusion of local businesses, often allowing local businesses to ‘slide by’ with practices that would land foreign owned businesses in hot water.  Unfortunately, this practice cannot be taken at face value, but will need to be evaluated in our next article that will focus on China’s interests and motivations.

One comment on “Google vs. China: Understanding Google’s Position”

  1. Marat says:

    We can’t fail to note that the political conscience has awakened in Google right after Obama’s coming to power. We think though, that the matter here is not in the ideology itself but rather its economic underlying reason.
    Google as well as several other transnational structures hardly lost a lot during the crisis. But what about Chinese leadership, for whom their own country and people make up the main asset, providing a decent place in the world? Maybe the Google leadership has the grounds to believe that the time when Chinese authorities may sacrifice part of their informational sovereignty has come?
    http://www.win.ru/en/school/4655.phtml

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