[The alternate title for this post could very well be "Baidu Executives Celebrate Gift-Horse with New Strategy to Capture Existing Google Customer Base."]
WSJ reports Google throwing in the towel — or at least leaking the rumor that it will, by publicly threatening immiment closure of its Chinese language search engine. A few posts ago, I strongly suggested this was likely, given the company’s extraordinary intransigence before those select few who have no need to back off.
Google’s closure of Google.cn would leave the Internet in China—which has about 400 million users, more than any other country, and is adding 250,000 each day—almost entirely dominated by local companies.
[Our old friend Jeremy from Danwei.org is quoted in the story.]
See also this report:
Google Inc. advertisers in China are being advised to switch to rivals such as Baidu Inc. and business partners are exploring alternatives as speculation grows the U.S. company will shut its Web site in the country.
Why is it Americans fail to effectively respond in kind with Chinese firms? Because, in short, standards differ.
Google’s departure could hardly be better news for the Standing Committee of the Politburo. One can imagine the round-table where a hypothetical thorn in the side is discussed…
A: On to that damn company….
B: Who is the boss? Can we shoot him?
C: No. It would be too messy. The whole world is watching.
B: It is your job to persuade the world that the execution is justified!
D: My son-in-law has internet interests. I think the stock would go down. You own stock in that company, too, don’t you?
C: I do, and many others in that commercial sphere.
A: Yes, yes, the stock will fall. No execution. Agreed?
All: Agreed.
A: Force them to leave the Motherland.
B: Yes, be as hard as nails. Attack from all sides.
E: Sirs, the company has just decided to withdraw from China.
All (in a flurry, picking up cellphones): Buy Baidu! Buy Sohu! Buy Sina!
Humor aside (if, in fact, you considered the above dialog to be humorous), Chinese media is forbidden territory for foreign firms — its control is of such value to the Party’s propaganda as to overwhelm whatever social benefit Westerners, such as Google and its executives, believe to have perceived. And frankly, if Chinese value such ideals, and wish to adopt them — which I do not believe to be the case for the majority of mainland Chinese — it is for them to overturn the ideas which Westerners (and some Chinese) believe oppress them.
However, apart from higher notions of God-given rights, and turning strictly to commerce, the US is a far more open environment for the activities of Chinese nationals than is China for American nationals. As an example, thousands of Chinese nationals, even those without immigrant status in this country, are licensed to practice law in many of these United States. No American, who is not a Chinese national and thus subject to heightened discipline by the Chinese state, is permitted to be similarly licensed.
Whither parity?
All of this occurs while a substantial portion of China’s foreign exchange reserves are in the hands of the US government — all of it eminently confiscatable.
The Google Reported to Plan Closing of Chinese Language Search Engine by AsiaBizBlog, unless otherwise expressly stated, is licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Unported License.
First class post. Chapeau!
Great article. What I don’t understand is why fewer people don’t see the inconsistencies of this system. As an Australian, I can’t own property here, yet housing prices in my home town of Melbourne are being driven through the roof by Beijing investors. The govt cries “foul” and runs to the WTO accusing Western nations of protectionism, but then manipulates its currency to artificially sustain its industries. A great article is http://www.nytimes.com/2010/03/15/business/global/15yuan.html?partner=rss&emc=rss&pagewanted=print
Why do Western governments and companies not see this? Or do they see it, and remain too greedy to do anything about it?
Your thoughts?
I can think of nothing else but that those who rule Western nations — having digested the caustic academic pap spread by their own generation which purports to prove the West responsible for the world’s ills — are too ashamed of their own civilizations to stand up for their own people, even when justice demands it and when, in fact, most of the cards are in their hands.