Business At The Price Of Freedom

An anonymous reader writes "The TechZone has an article on how much technology companies setting up shops in China have to kowtow to the Chinese government. All the major search engines have given in to Chinese demands to throttle liberty in exchange for access to the Chinese market and Microsoft has blocked users of its MSN site from using the terms 'freedom,' 'democracy' and other concepts China has designated as dangerous. From the article: 'Most disconcerting are recent reports that Yahoo!'s Hong Kong operation is turning over emails which helped convict a reporter. Journalist Shi Tao was jailed and sentenced to 10 years in prison for "illegally sending state secrets abroad." The secrets that he revealed were information his newspaper received from the state propaganda department about how they could cover the 15th anniversary of the Tiananmen Square massacre. He was identified because he had used Yahoo!'s free email service for which Yahoo! turned over log files to authorities that were later tracked back to his computer.'"

Comments

There's Freenet and GPG on Free Operating Systems

[c0l0]

...and virtually a million ways to cloak sensitive data from You Personal Government's eyes. It's sad those who could have saved their liberty by using those, often did not do so, obviously :(

Re:Is capitalism soluble in comunism ?

[Red Flayer]

"Sometimes, I wonder if market economy can success in a totalitarian country. It would be a huge blow in face of economist's theories if this is the case."

(1) Communism != totalitarianism. Totalitarianism is a method of administering government, not economy. Here's a question for you: is it possible to have a communist economy with a democratic government?

(2) China does not have a purely communist economy; many reforms have occurred to foster (somewhat) free markets.

By accepted definition, capitalism cannot exist within communism -- they are two faces of a coin. Perhaps the subject of your post should have been, "Can capitalism exist under a totalitarian government?"

Or perhaps, "Can capitalism and communism co-exist in one political system?"

It's worse than you think!

[ImaLamer]

I wonder what the president will do about this.

Nothing, of course. Just like no one did anything when U.S. corporations set up shop in the newly formed Soviet Union. You don't challenge corporations - it doesn't work.

Do we really want our debt financed by China? What type of barganing power does this give them over us while our economy is so fragile?

Our debt financed by China? It's worse than that. Did you know that during that housing boom we just had that the Chinese central banks sunk a lot of the national treasury into the American mortgage market? They sure don't believe in property rights in China, but over here it's another story.

http://www.economist.com/finance/displayStory.cfm? story_id=4221685

Not only has China played a role in holding down short-term interest rates, but the People's Bank of China has also supported America's mortgage market by buying vast amounts of mortgage-backed securities.

What does the breaking of the yuan's peg to the dollar mean for bond yields? American Treasury yields rose by 12 basis points after Beijing made its announcement last week. Having played a hand in inflating America's housing bubble, could China now prick it by pushing up mortgage rates, which are closely tied to long-term bond yields?

If abandoning its dollar peg causes China to reduce its purchases of T-bonds, then yields will rise. But this depends on several uncertainties. For instance, will last week's revaluation reduce inflows of speculative capital into China, and hence its need to intervene in the foreign-exchange market by buying dollars? A large chunk of China's foreign-exchange intervention over the past year has been to offset not its current-account surplus but inflows of hot money. Some economists believe that, in the short term, the small revaluation will intensify speculation of further revaluations and so attract even more capital inflows, forcing the People's Bank of China to buy more Treasury bonds to stabilise its currency. If so, bond yields will remain low.

On the other hand, the switch from a dollar peg to a currency basket may cause China to diversify its reserves away from dollars. It is unlikely to dump its dollars, but it could well reduce its new purchases of Treasury bonds in favour of other currencies. And, if China really has broken the yuan's link with the dollar, then this could be the trigger for another general slide in the greenback against the euro, the yen and other currencies, prompting investors to demand higher yields. The fate of American house prices could thus be determined by unelected bureaucrats in Beijing rather than the unelected central bankers of the West.