Google and Cyber War With China

When I sat down on January 12 and made the following two predictions for 2010, I believed that a trade war was looming and that the relationship between the United States and China would deteriorate as a result.

Prediction #4: The relationship between China and the United States will deteriorate in 2010.

Prediction #5: China will begin to act unilaterally on global issues like Iran.

I could not have predicted that a cyber war would prove to be an even greater threat to the stability of Sino-American relations. Nor could I have predicted that a dispute over the internet could jeopardize cooperation between the two countries on an issue as important as Iran. But that is exactly what has happened over the past two weeks, in a surprising beginning to the new year that no one could have predicted.

At the same time that I was making my predictions for 2010, David Drummond, SVP, Corporate Development and Chief Legal Officer of Google, was writing on the company’s official blog that Google had come to the conclusion that it “should review the feasibility of our business operations in China.” The reason Drummond cited for Google’s possible decision to pull out of China was that the company had detected in mid-December a “highly sophisticated and targeted attack on our corporate infrastructure originating from China that resulted in the theft of intellectual property from Google.” Moreover, Drummond stated that Google had “evidence to suggest that a primary goal of the attackers was accessing the Gmail accounts of Chinese human rights activists.”

As an American, it’s impossible to be against freedom of speech, the free flow of information and protection of privacy. After all, those are all core values that have lead to America’s greatness. Nonetheless, Drummond’s comments were provocative to say the least. One only hopes they were made as a last resort, only after Google had aired its grievances with the relevant Chinese officials behind closed doors. If Google’s objective was to make a political statement, then the company succeeded. If it was to try and influence behavior, it had the opposite effect. While U.S. companies have a tendency to litigate publicly through the media to achieve some desired goal, that’s never a good approach to doing business in China.

American companies also like to enlist the support of the U.S. government when they run into trouble in China. And that appears to be what Google did. In a speech on January 21, Secretary of State Hillary Clinton called for a global Internet free of censorship, and demanded that China investigate claims by Google that e-mail accounts belonging to human rights activists had been targeted by hackers. “We look to Chinese authorities to conduct a thorough investigation of the cyber intrusions that led Google to make this announcement,” she said. “We also look for that investigation and its results to be transparent.”

Needless to say, China’s government reacted sharply to Google’s statements and Secretary Clinton’s remarks. As reported by the Associated Press, “China sharply rebuked the United States, denying involvement in any Internet attacks and defending its online restrictions as lawful after Washington urged Beijing to investigate an attack against Google.” The Foreign Ministry said Secretary Clinton’s remarks “damaged bilateral relations,” while a Chinese state newspaper said Washington was imposing “information imperialism” on China. The Ministry of Industry and Information Technology went on the offensive, saying the country’s anti-hacking policy is “transparent and consistent.”

The dispute took a more ominous turn, however, when a commentator in the People’s Daily, the Communist Party’s main newspaper, said that America is seeking to control the Internet and alleged that the U.S. used the Web to incite election protests in Iran last year. As reported by Jason Dean in The Wall Street Journal:

The brief People’s Daily article, which carried the byline Wang Xiaoyang, charged that the U.S. developed the concept of cyber warfare and that it had used the Internet to foment unrest in Iran. “It was America that initiated Internet warfare, using YouTube videos and Twitter micro-blog misinformation to split, incite, and sow discord between the conservative and reform factions…to bring about large-scale bloodshed in Iran,” the article said.”

So much for cooperation between the two countries on Iran.

The Xinhua News Agency also cited the State Council, China’s Cabinet, as criticizing what it called interference in the country’s domestic affairs. Internet control is considered a critical matter of state security in China. Beijing promotes Internet use for commerce, but heavily censors content it deems pornographic, anti-social or politically subversive and blocks many foreign news and social media sites, including Twitter and Facebook, and the popular video-sharing site YouTube.

After all of that, Fox News reported on January 26 that:

Google is in talks with the Chinese government to keep its research center in China. It also seeks to maintain an advertising sales team that generates most of the company’s revenue in the country and a fledgling mobile phone business. The talks are said to be delicate, because of Google’s recent move to stand up to the Chinese government’s demands for censored search results. But Google still wants to have access to the country’s engineering talent and steadily growing online advertising and mobile phone markets.

It sounds to me like Google wants to have its cake and eat it too, which is fine. I just wish Google had had those “delicate talks” before causing an international incident.

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