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Google Hacked, May Pull Out of China

D H NG writes "Following a sophisticated attack on Google infrastructure originating from China late last year, Google has decided to take 'a new approach' to China. In their investigation, Google found that more than 20 large companies had been infiltrated and dozens of Chinese human rights activists' Gmail accounts had been compromised. Google has decided to 'review the feasibility of [its] business operations in China,' no longer censoring results in Google.cn, and if necessary, to 'shut down Google.cn, and potentially [Google's] offices in China.'"

32 of 687 comments (clear)

  1. Free trade of ideas, anyone? by LostCluster · · Score: 5, Insightful

    Couple this with Slashdot's coverage of a Baidu site hacker takeover and the constant claims of a "Don't be evil" violation for following Chinese censorship demands on google.cn... maybe there just isn't any money to be made there without problems that threaten Google's reputation that it cashes in with elsewhere. So much for free trade... this means info-technology war.

    1. Re:Free trade of ideas, anyone? by NeutronCowboy · · Score: 5, Interesting

      maybe there just isn't any money to be made there without problems that threaten Google's reputation that it cashes in with elsewhere.

      Good question. I doubt that the cost in loss of goodwill exceeds potential revenue in China. Which in turn means that there might be something else at play. Does Google want to play hardball with China? Is it concerned that the external costs of doing business in China (exposed servers, lots of red tape, etc) outweighs the revenue it gets from being available in China?

      Either which way, I'm going to follow this. I doubt that much will change - but the various exchanges and discussions that come up around this should make for a good read.

      --
      Those who can, do. Those who can't, sue.
    2. Re:Free trade of ideas, anyone? by Captain+Splendid · · Score: 5, Insightful

      Good question. I doubt that the cost in loss of goodwill exceeds potential revenue in China.

      Good summary of GP's point. Bu, then you say this:

      Does Google want to play hardball with China?

      There's no hardball involved. Google looks at China and goes "It cost us more than it's getting us." Pure business, with the added bonus of nice PR for being the first corp that said no to the PRC.

      And this is devastating for the Chinese government. After keeping their populace docile and stupid, what they want more than anything else is to be taken seriously as an economic player, sit at the big boy's table and rake in some of that fat global trade cash. So, when one of the biggest companies around says China's market is more hassle than it's worth, it shows them up for the bumpkins that they still are.

      But we knew this was coming (and hopefully Nixon did too). Can't have all the benefits of capitalism without losing some of the "benefits" of totalitarianism. You can have some of one and lots of the other (like most Western democracies), but not lots of both.

      --
      Linux, you magnificent bastard, I read the fucking manual!
    3. Re:Free trade of ideas, anyone? by PopeRatzo · · Score: 5, Interesting

      I doubt that the cost in loss of goodwill exceeds potential revenue in China

      Since the average annual wage for much of China is still about $500 per year, I think the financial calculus for dealing with them might be a little more complicated that you suggest.

      Remember, even though annual disposable income in the big cities is as high as $2000 per year on average, there are one whole hell of a lot of people in China who are still dirt poor and aren't going to be buying a lot of products seen advertised on Google.

      It's going to be interesting to see how this shakes out. I suspect that the core values of the founders of Google haven't changed that much over the years, but their great success may have led them to believe that they are as likely to change a repressive society like China or Iran as those societies are to change Google.

      It still remains to be seen if their egos are right or not. Chinese society with all its complicated stratification and variety has been around a good deal longer than Google, but I've seen big and varied societies make enormous changes in a very short time during my own lifetime.

      --
      You are welcome on my lawn.
    4. Re:Free trade of ideas, anyone? by phantomfive · · Score: 5, Informative

      It's not the first foreign company that had massive problems with China, even in the last year. The government arrested employees of the Australian Rio Tinto steel company a few months ago, after negotiations broke down with a government backed company (the government didn't want to pay as much as Rio Tinto wanted to charge). The government arrested the employees for industrial espionage and bribing.

      The scary thing is, it is essentially impossible for a foreign company to do business in China without bribes, even a small company. The Rio Tinto case wasn't publicized much in the mainstream media (at least in the US), but it was fairly well covered in the Wall Street Journal, and I guarantee executives of a lot of companies paid attention. Being arrested in China because the government doesn't like you is a risk that can outweigh a huge profit margin.

      I would honestly suggest that if you are considering outsourcing to China, that you do it instead to India or Eastern Europe, because the unknowns are much smaller.

      --
      Qxe4
    5. Re:Free trade of ideas, anyone? by mykos · · Score: 5, Insightful

      Well, at least google hasn't jailed people for thought and information crimes yet. If you see google as a possible evil, they are most certainly the lesser so far.

    6. Re:Free trade of ideas, anyone? by ObsessiveMathsFreak · · Score: 5, Interesting

      Forget reputations. The big question here is if there's money to be made in China at all.

      Over the last 10 years, there has been a roaring trade between the west and China. Ordinarily, this would be a great thing, but so far trade has been completely one sided. The fact is, the west has very little that the Chinese actually want to buy, or cannot manufacture themselves. Individual companies have been making short term gains by relocating their businesses to China; but in the long term, Chinese competitors (generally state subsidised) quickly emerge and dominate the local market and then the export market. For short term gain, western companies essentially write their own death warrants.

      Google has gone into China. It has gotten nowhere. It's not the only company to see this happen. This big market, a fifth or the worlds population, turns out not to actually be worth the effort in most cases. Not only do you have to put up with the nineteenth century nonsense perpetuated by the communist party, you have to accept the fact that local competitors can and will eat you alive, either with state assistance, ruthless exploitation of labour, or by flat out ignoring the IP rules you hold so dear. Tell me the Western company that is making money in China itself. Making the kind of money that's going to help pay the balance of trade deficit that has emerged from the amount of money Chinese exporters have made in the last 10 years. Name me one.

      China isn't worth it. At least not now. Come back in 30 years when the country has some human rights, democratic government and respect for trade laws. Then you can do, what is commonly called, business. There'll probably be a lot more money in people's pockets by that time too. Right now the whole country is a shell game you can never win, no matter how much you think the rules have to be the same. There's no point talking about gaining first mover advantage in a country where people can't even change jobs without a bloody chit. Not for the vast majority of companies.

      Maybe Google will finally come to realise this. People may think its signals their return to the light side of the force. Personally, I'm inclined to think Google simply has a most ironic stance towards the personal data to compiles on the world population, jealously guarding it from all comers. Either way, Google leaving China will end up being a net positive for the company, its users, and the balance of trade deficit. The Chinese might lose a few search results, but frankly, that's the bed they've made for themselves right now.

      --
      May the Maths Be with you!
    7. Re:Free trade of ideas, anyone? by Jah-Wren+Ryel · · Score: 5, Insightful

      Can't have all the benefits of capitalism without losing some of the "benefits" of totalitarianism. You can have some of one and lots of the other (like most Western democracies), but not lots of both.

      I think Singapore would beg to differ.

      --
      When information is power, privacy is freedom.
    8. Re:Free trade of ideas, anyone? by Captain+Splendid · · Score: 5, Funny

      I think Singapore would beg to differ.

      Pff. So can Monaco. Call me when you have a real country.

      --
      Linux, you magnificent bastard, I read the fucking manual!
    9. Re:Free trade of ideas, anyone? by Anonymous Coward · · Score: 5, Interesting

      It's not the first foreign company that had massive problems with China, even in the last year. The government arrested employees of the Australian Rio Tinto steel company a few months ago, after negotiations broke down with a government backed company (the government didn't want to pay as much as Rio Tinto wanted to charge). The government arrested the employees for industrial espionage and bribing.

      An acquaintance works for a Canadian company that sells machines to apply a specialized chemical coating to certain types of containers (the vagueness is intentional). A trip of executives and engineers resulted in a sale of four units (enough for a small company) and a couple of hundred thousand liters of coating to a mid-size Chinese company.

      On the next trip their were no more sales. In fact, the machines were reverse engineered (as was the coating substance) and are actively being sold at a fraction of the price, despite that all of the Canadian stuff had appropriate IP protection.

      Between this sort of stuff and the shenanigans that the Chinese are involved in with respect to cooking the books of their stock markets, I'm not so sure I'd call them an "emerging market". More like an "emerging bubble" waiting to take down their investors in the next few years.

    10. Re:Free trade of ideas, anyone? by twostix · · Score: 5, Interesting

      "the government didn't want to pay as much as Rio Tinto wanted to charge"

      Which is the crux of the issue with China that I pray people in the west start waking up to.

      When you do business in China, you're doing business with the corrupt and totalitarian Chinese Government - a nasty operation that has no intent of *ever* being any less corrupt and ruthless than it is now. The separation between any so called "private" business and the government (especially big business) in China is whatever the party leaders say it is at any given moment. Rio thought they were negotiating a tough iron ore deal with the Chinese foundries as they would do with any private business in any western democracy, that is they played hardball with them.

      The problem is, the Chinese government decided it didn't like said foundries being negotiated with in such a harsh manner (who does this pip squeak company think it is embarrassing us internationally!) and so threw the top man Rio man in China in gaol where it then took three months to even bother *charging* him.

      And of course we know the upstanding state of justice in the Chinese legal system...

      Dear corporate west, if you deal with the totalitarian devil you will eventually get burned.

      A lesson that should have been learned once and for all in the 1930s.

    11. Re:Free trade of ideas, anyone? by guanxi · · Score: 5, Insightful

      Clearly, you've never met an actual Chinese person. Do you honestly think they don't know what's going on? No, they know. They just don't care. They're lives have been massively transformed for the better. Especially for those on the coast. (The western interior is another story.) They don't want to rock the boat. Everything is going swimingly for them. Why change?

      As a Tsinghua student, Dr. Shi joined the 1989 pro-democracy protests in Tiananmen Square. As a registered Democrat in the United States, he participated eagerly in elections. "Multiparty democracy is perfect for the United States," he said. "But believing that multiparty democracy is right for the United States does not mean it is right for China."

      How many have you met, out of 1.2 billion, that you can speak for the Chinese people? Have you met those in prisons or those who can't get jobs because of their political beliefs? What about those who can't practice their religion? What about those who censor their beliefs so they can keep their jobs? What about those in Tibet? In Xinjiang? What about those protesting against the government all over China, because their rights are ignored and trampled by a political establishment which has no responsibility to the people (because they can't be voted out of office)? Why must the Communist Party jail democracy advocates and censor the Internet, if their people don't want it?

      Your claims repeat the Communist Party line (and quote people who risk their jobs if they disagree), which itself is the same old canard despots worldwide have used: It's a Western cultural thing, not appropriate in our culture; our people don't want it. (And if they say they do, we put them in jail.) But the facts are overwhelming: Democracy and freedom are desires and values universal to humanity. The people of South Korea, Taiwan, Japan, India, Brazil, Turkey, South Africa and others, representing almost every other non-Western culture, have adopted it with great success. Only those who are forcibly repressed by their government are denied it. And all over the world, nearly 100% of the most prosperous, stable countries are democracies.

      Every democracy started out as undemocratic and unfree (including the U.S. if you count the colonial era). To say the people of China lack the motivation or ability to seize it for themselves is patronizing and insulting. They have come so far from the Cultural Revolution in the 1960s, when a totalitarian dictator's incompetence and obscene disregard killed tens of millions and reduced their country to shambles, to today's relatively stable government and rocketing prosperity. There is no reason to think they will not continue and eventually enjoy the freedom and prosperity that so many others have achieved.

    12. Re:Free trade of ideas, anyone? by Skjellifetti · · Score: 5, Interesting
      Rio Tinto is an iron ore miner that sells the ore to Chinese and Japanese steel producers. They don't make the steel themselves. An article in today's Financial Times claims that the big iron ore producers have frozen China out of talks on iron ore prices and are negotiating pretty much with the Japanese and then will make the Chinese steel producers a "take it or leave it" offer based on those prices.

      The decision to sideline Beijing is remarkable as China is the largest iron ore importer, accounting for more than 50 per cent of the seaborne market.

      The miners have so far held no substantive negotiations with the Chinese side, led by Baosteel, the big state-owned steel mill, according to people familiar with the talks.

      They added that there were no plans to travel to China for talks, meeting instead in Singapore.

      One executive said: "As far as I am concerned, they [the Chinese negotiators] could come over to Australia if they want to talk."

      There are some allegations making the rounds that Obama was played by the Chinese in Copenhagen. The mining case plus Google's actions makes me wonder if the West has decided that China has gotten too big for its britches and is being reminded that they are not a superpower yet and that they need to learn to be a little more cooperative with the rest of the world.

      India, O.K. Eastern Europe? Stay out of Russia. Guy I know had his business taken over by the Russian Mob. There is no Rule of Law in either Russia or China.

  2. I say pull out... by Geldon · · Score: 5, Insightful

    Google has been skirting the edge of their "don't be evil" policy with China since the start. If you have to censor your search results, it's not worth the trouble.

    1. Re:I say pull out... by Monkeedude1212 · · Score: 5, Insightful

      Especially since they've determined the target of the attacks were the gmail accounts of human rights activists.

      Doesn't it seem just a LITTLE odd that the Chinese government would want this information, Google knows someone wants this information, and the attack originated in China?

      I don't blame them for threatening to pull out, its likely that whoever attacked Google was on some form of Chinese government payroll. Over or under the table.

    2. Re:I say pull out... by DrGamez · · Score: 5, Funny

      This is like going to the snackbar at a movie theater and demanding that they sell steak and lobster otherwise they are censoring you and blocking your freedoms. The hacking is an unrelated issue, China has been hacking everyone for years.

      They never sell steak at snack bars. It's not like you're asking for soda and they say they have none, you know there is soda out there but someone is telling the snack bar not to stock it. Steak and lobster? What search engine do you see your movies at?

  3. So what will happen in practice? by RDW · · Score: 5, Interesting

    My guess: Google stops censoring itself, gaining credibility for its belatedly 'principled' stand against the Chinese government, while sending a message to China that hacking its servers is Not Polite. China predictably steps in to filter the search results using its own mechanisms, relieving Google of the burden. Google gets to keep its advertising revenue, while the users behind the Great Firewall get (at best) the same censorship as before. Now if Google really wants to make a point, with a genuine and serious risk of losing business, how about making google.cn an exclusively SSL site and seeing how fast China blocks it..?

    1. Re:So what will happen in practice? by Kalriath · · Score: 5, Informative

      What? The URL string is not available over an SSL connection. Here's a transcript, including headers, of an HTTPS request.

      AW#$GAWE$gae3gtraweRGEGaergaweRGTawerGTAWERGTW#trgse3ryg35g

      You get the idea. No URI string available. All they could detect is the destination server.

      --
      For a site about things like basic rights, Slashdot users sure do like to censor "dissent".
    2. Re:So what will happen in practice? by Anonymous Coward · · Score: 5, Funny

      That looks like some interesting perl code you have there. What does it do?

  4. Definitely Pull Out... by Foobar+of+Borg · · Score: 5, Funny

    I mean, we wouldn't want to impregnate China, would we?

  5. Re:What's the impact? by Anonymous Coward · · Score: 5, Insightful

    Google controls ~25% of the search traffic in China. Not the monolith they are in Europe or the U.S. but enough that everyone in China would know the government was blocking Google. On the other hand they are currently running a major crackdown on internet porn and could potentially try to use that (and google's "refusal to help protect Chinese children from western vice) as an excuse.

  6. And the lesson is... by JoshuaZ · · Score: 5, Insightful

    The lesson is simple: Work with evil and evil will still screw you over. It took Google wrong enough to realize this. There's a real temptation to Godwin this with a comparison to Neville Chamberlain. But the result is clear: Google tried to cooperate with China in hope that some good with come of a compromise policy. The end result is that the Chinese still tried to infiltrate Google to serve its censorious, abusive ends.

  7. Re:What's the impact? by rgo · · Score: 5, Insightful

    While the impact for chinese people could not be that large, the impact for Google is huge. It is a really ballsy move from them to risk losing the enormous chinese market.

  8. Freedom by EEPROMS · · Score: 5, Insightful

    You can only protect your liberties in this world by protecting the other man's freedom. You can only be free if I am free.

    Clarence Darrow

  9. Translation from marketspeak by girlintraining · · Score: 5, Insightful

    Translation: "We were cool with doing business with you, even effacing our own corporate values, because your country is a lucrative market. But it wasn't enough for us to be cooperative -- you got in our servers and messed with our stuff. And you know what -- that'll cost us more in our reputation and business costs than you're worth, so goodbye."

    --
    #fuckbeta #iamslashdot #dicemustdie
    1. Re:Translation from marketspeak by christoofar · · Score: 5, Funny

      That sentence still has 40% marketease in it.

      Here's the Texas-Bubba version:

      "We done come over there with our 'quipment and y'alls fucked it up royally and y'all are goin' through allour files. Jesus H. Christ y'all are so batshit I can't see straight. I ain't made dollar to donuts in this place. I'm gonna call Aunt Ethel to see if we can't move back in with the in-laws over in Taiwan."

  10. Is it? by SmallFurryCreature · · Score: 5, Interesting

    Google had a great reputation with its "Do no evil" motto. And then they went into China and they lost it.

    What is worth more to google. A great reputation in the west and no business in China, or a sullied reputation in the west and lousy business in China that may be cut off any day when the government chances its mind? You seem to assume like many others that doing business in China is easy, just follow the rules and you make a profit. But that is not the case. You IP is an open target, the government can change the rules whenever it wants and the local competition is heavily entwined with the state.

    That makes for a difficult operating environment. It is indeed a brave move by Google to go against the Wall Street mentality of "a penny today" but long term it might be the wisest move they ever make. At least they are sending a signal that there are limits. It seems that at the end of the crisis, something might be changing. Even the US seems to be considering to tax banks... unthinkable in the past. New firms are starting up that claim they will things different and now google being the first to question the Wall Street wisdom that doing business in China is worth everything.

    And as for enormous. China only passed Germany this year in exports. The market really ain't all that large. Large parts of it are dirt poor and the rest works for pennies. India is equal in population size and a lot more open. You don't see everyone bending over backwards for India do you? Wall Street loves China, no meddling human rights to upset things, simple rules. But Wall Street has shown it doesn't know shit.

    I am frankly surprised at reading this story. Either we soon will get an update that this guy was fired or Google is very serious about this. Because somewhere in China, someone just fainted. The Chinese government does NOT want google to just disappear because of its actions, the average Chinese person doesn't really believe that censorship affects him/her personally. It is just for troublemakers. When google goes (and with that youtube etc etc) it will be noticed far more clearly then some dissident being locked up.

    Who knew, Google might actually life up to its motto "Do no evil". Wonder what other companies will do... If Google follows-up on this, MS apologists lost a major piece of ammunition.

    --

    MMO Quests are like orgasms:

    You may solo them, I prefer them in a group.

  11. Re:What's the impact? by Sycraft-fu · · Score: 5, Insightful

    Actually it could be large to China. Not so much in and of itself, but what it overall represents. China's policies risk creating a situation where there is the "China Internet" and the "Real Internet." That is going to be problematic for business. If China is all home grown, censorship based systems that are in use there and nowhere else, it'll make it a lot harder to do business in the world.

    Also, it can cause loss of face and legitimacy for them. Remember that China is not like North Korea, their populace kept all at home, ignorant of the rest of the world. The Chinese travel a lot, they study and work in other countries. In the department I work for on campus we have tons of Chinese grad students. If it turns out that the Internet is totally different in China than the rest of the world, that China won't let you see most of what is out there, well then these people are going to start asking why.

    When the censorship is more low key, more invisible, things like the Chinese Google just having different search results on things, it isn't the kind of thing many will notice. After all Google localizes results everywhere, that certain ones are omitted in China is harder to notice if you aren't looking for it. However if it is a situation where they discover that these services everyone else uses are available AT ALL in China, then they start to wonder why.

  12. culture is an addendum to humanity by circletimessquare · · Score: 5, Insightful

    it does not override, modify, or negate basic human rights

    if there is in fact as aspect of culture, any culture, western, indian, russian, whatever, that is an aborgation of human rights, then it is up to you, if you consider yourself someone with a sense of principles, to oppose it

    i'm not saying that the chinese should eat mcdonalds, i'm saying- hell, the CHINESE are saying (as in, the actual chinese, not their autocrats) that the chinese deserve HUMAN RIGHTS

    there's a reason its called HUMAN rights, and not american rights or western rights

    you are truly one deluded fool if cultural differences excuses gross violations of basic human dignity

    what is your take on clitorectomies? is that west african tradition something to be respected, or fought? if you fight it, are you simply a cultural imperialist, an ethnocentric westerner?

    do you believe that if you cross the straights of bosporus or the straights of gibraltar or the rio grande and *snap*, magic! human beings are fundamentally different and gross violations of human rights should be respected as quaint local custom?

    i am not an american. i am a human being. it is in fact, those who think of themselves as american first, and a human second, or a brazilian first, and a human second, or a muslim first, and a human second, or whatever, that is the source of all the suffering in this world. what random arbitrary tribal boundary you are born within is a far, far secondary consideration to your allegiance to your HUMANITY. or, at least it should be. too many in this world have that backwards, and they are the source of our problems

    --
    intellectual property law is philosophically incoherent. it is your moral duty to ignore it or sabotage it
  13. Guess what Baidu has already censored? by Anonymous Coward · · Score: 5, Interesting

    Step #1: Visit www.baidu.com.
    Step #2: Search for Google or blogspot.com. Note that both work.
    Step #3: Now search for google.blogspot.com.
    Step #4: Enjoy your Baidu lockout. You should be able to search again in 5-10 minutes, I haven't timed the duration exactly.

    1. Re:Guess what Baidu has already censored? by Game_Ender · · Score: 5, Informative

      Confirmed. This kind of stuff is pretty crazy.

  14. Re:Stereotype by interskh · · Score: 5, Informative

    I am a Chinese student.

    Thanks to Internet, we Chinese ppl these days could get these information easier than before. We know about these things like Tienanmen event, etc. Well we have some places to share these information(p2p rocks, doesnt it?) As far as i know, most student in my college have knowledges of what happened those years and sometime we chat about that.

    Admittedly, there is GFW trying to block some websites. But in the age of Internet, there is really nothing that could block us from the facts.