Google Bluffs in China

Don’t be evil. Google has recently committed itself to fully following this motto. After a sophisticated cyber-attack originating from China on the possible e-mail accounts of Chinese human rights activists and by extension, Google’s servers, Google has had enough.

Google may be alienated in a country of harsh realities; but for Google to abandon one of the largest markets in the world is not only a foolish business decision, but also one with irrevocable consequences. It is such a ridiculously bad decision that it is impossible. Hence, Google’s threat to leave must be a feint.

Essentially, Mr. Sergey Brin, Mr. Larry Page and Mr. Eric E. Schmidt are giving China’s bureaucracy an ultimatum: Either loosen regulations that infringe on internationally accepted standards of human rights, or lose the prestige of hosting one of the world’s most sophisticated and revolutionary companies.

Both sides benefit from a continuing relationship. China gets an image of a safe haven for foreign direct investment – a picturesque land where money can be sown and windfalls reaped. China’s partner organism, Google, gets access to a rapidly growing market of Internet users. Every day, more and more people will be seeking the services Google offers and many more corporations will be enticed to purchase ad space.

According to Reuters, last year, “the number of Chinese Internet users grew by 86 million – more than the total population of Germany – or a rise of 28.9 percent.” The potential for growth is astounding. It is safe to conclude that Google’s threat to withdraw from the Chinese market is nothing but a bluff, if a cunning and necessary one. Google has much more to lose by leaving.

So how will the current situation be resolved? In Asian cultures, public face and respect are core aspects of every facet of life ranging from the social sphere to the public one. Any plausible solution must make it seem as if China’s demands have been met. Concessions to Google must be made without actually appearing to do so. It has been accomplished in the past and there is no reason to suspect any different outcome in the future for a similar situation.

China is a different country, a different landscape than it was just a few decades ago and is much more amiable to foreign investment. While it still wishes to preserve face and maintain absolute control, China has learned to be pragmatic. After decades of isolationist policies, China has realized that the key to economic prosperity is to maintain permeable borders with the free-flow exchange of people, ideas and products. Globalization and competition in an international marketplace has spurred growth that no self-alienating economy can achieve alone and China’s economists recognize this.

So will Google leave China? Any serious consideration of the validity of such a move is ludicrous in a rational, self-seeking world.

Andrew Charles Wong is a fourth-year business economics student. He can be reached at andrewcw@uci.edu.