Behind Google's Recent Decision About China

yuhong writes "This article by The Independent takes a look at what is behind the recent decisions made by Google regarding China, particularly regarding Sergey Brin, born in the USSR, [and whose origins] played a big part in this decision. From the article: 'He's always had an emotional tug within him, saying "we shouldn't be making compromises," says Ken Auletta, the author of Googled: The End of the World As We Know It.'"

Comments

Hate google or not

[GundamFan]

Standing up to China takes stones. Having said that, I am more and more afraid that they'll own all of us in my lifetime anyway.

Re:Hate google or not

[yog]

Hm, I'm not sure why anyone would "hate" Google. I like using all their free stuff, and my Nexus One is the cat's pajamas. I agree with you that it takes some big cajones to stand up to the PRC government, which is getting richer and scarier. But we have to remember a few historical facts. China is currently the low cost acceptable quality manufacturer in the world. This will not hold forever. Remember when it was Taiwan and Korea, and before that Japan? China will eventually face a situation where its cheap labor is a liability rather than an asset. They can't perpetuate this divide between the haves and have-nots forever. The cities will get richer, more expensive to live in, and knowledge worker wages will rise. Infrastructure needs will scream for more taxation, and cost of living will increase. Everyone will want a car, then two cars, then a house with a garage, etc. There's a price for moving to a consumption economy. China's paranoid regime will spend more on expensive new military gear and, gradually, it will increasingly resemble a Western economy. They can "near-source" their manufacturing to the hinterland, e.g. Sichuan, Guangdong, Guangxi, etc. for a while longer but not forever. Eventually, some other manufacturing region will become prominent--maybe parts of India, South America, or Africa, where wages are still very low and people are glad for any kind of work. Or, robotics and nanotech will finally kick in and remove the low wage advantage from the equation, and the U.S. may reemerge as a major manufacturer. A factory on every corner, with made-to-order consumer goods while you wait, for example. As for the Google situation, it's not over yet. I suspect there will be some kind of win-win understanding between the two parties where Google will be relieved of censorship duties, but the PRC government will find some other way to effectively censor search results without either side admitting any concession.

Re:Hate google or not

[OakDragon]

Thank you, that's an excellent response to all the China v. America doom-saying that's going on these days. Twenty years ago - and I am old enough to remember it first hand - it was Japan that was going to bury us. There are very good reasons that China's prospects look bleak rather than promising.

Re:Hate google or not

[javilon]

On the other hand, Microsoft is quite happy collaborating with the Chinese government in clamping on freedom of expression.

If only for that reason, you'll never catch me using bing.

There are the moral reasons and also the fact that information about you can end up in the hands of Chinese officials. Of course the later is more important for the Chinese population living abroad and for companies competing against Chinese products (most of the big ones if not all)

Re:Hate google or not

[OwMyBrain]

Standing up to China takes stones.

Having said that, I am more and more afraid that they'll own all of us in my lifetime anyway.

Google or China?

Re:Hate google or not

[jgardia]

cajones = drawers, cojones = the word you wanted to use.

Re:Hate google or not

[jgtg32a]

Um no,
China owns 23.35% of the foreign dept of the US (JA is next w/ 21.13%), foreign dept is 27.90% of the total public dept.
Giving China a grand total of 6.51% of the total dept of the US

http://en.wikipedia.org/wiki/United_States_public_debt

Re:Hate google or not

[JohnFen]

I like using all their free stuff, and my Nexus One is the cat's pajamas.

Nothing Google provides is for free. You pay for everything by exchanging access to your personal information for it.

Re:Hate google or not

[jgtg32a]

Oh wow, I don't know what's worse me using dept instead of debt or you not using a regexp to correct it. ;)

Re:Hate google or not

[Anonymous Coward]

While China's overall GDP growth numbers have looked good, especially relative to other top economies, there are some underlying structural issues hidden by these numbers. In one case, I don't think they take into account the environmental sacrifices that have been made to pull their economy forward and this will be due at some point (recent green efforts, notwithstanding).

A recent BBC broadcast (link below), highlighted some of the issues related to China's growth. The guest was Jim Chanos, an investor known for his perceptiveness in shorting industries. He noted that much of their growth was asset based (plant building, etc) and as a percentage of GDP rather large. This had been going on for some time (essentially funded by State capital) and the depreciation of said assets is not taken into account when calculating their GDP. GDP in China is a goal, not one of many descriptions normally used for observing overall growth. This can affect planning, especially for an economy with so much central planning, as they target growth just to make GDP grow. Thus you get an imbalance in short term gain versus long term development.

China Crisis (BBC podcast)
http://downloads.bbc.co.uk/podcasts/worldservice/bizdaily/bizdaily_20100127-1026a.mp3

Re:Hate google or not

[Lemmy Caution]

Google is controlled by two people: Larry Page and Sergey Brin. They together own about 59% of the voting rights for the company. (Over the next few years, they plan to reduce that to about 49%, but that will be de facto control as well.)

This means that they can generally do what they want. They are not mindlessly piloted by the anonymous avarice of its shareholders.

Re:Hate google or not

[Neoprofin]

The US has been living on credit every single day of it's history with the exception of January 8, 1835, the only time in history the government hasn't owed anyone money.

Re:Hate google or not

[DarenN]

The parent is extremely informative. It's a major problem in some areas of China because property development is very short term in terms of direct input into the economy, and leads to property bubbles where property is overvalued and eventually crashes. Add construction as a large percentage of your GDP then you've got the problem we ran into in Ireland when the construction sector collapsed - it was worth something like 25% of GDP and a correspondingly massive amount of tax receipts. When that income went away... well it hasn't been (and isn't) pretty.

The other (and funnier) result is empty cities, as happened in "new" Ordos (This is a video report) on the Mongolian border. A whole empty city was built, and no-one can afford to move to it. No-one lives in it, it exists because "building is good". Baffling!

Re:Hate google or not

[Island Admin]

Yes ... nice rebly. I accebt, that I was outsmarted. I am now debressed, and will no longer write such rebulsive code. :)

Like Father Like Son

[eldavojohn]

This article by The Independent takes a look at what is behind the recent decisions made by Google regarding China, particularly regarding Sergey Brin was born in the USSR which played a big part in this decision.

Interesting, Sergey's father faced the problem of having to compromise by abandoning his faith and culture in order to get the job he wanted (astronomer) or stay Jewish and be reduced/stunted in a select set of careers. Now Sergey has a similar decision where he can choose either his principles or a chance at one sixth of the world's population as a market. Should be an interesting choice.

I hope he realizes that once he cashes in the choice will no longer be his and will be a painfully obvious one for the investors. Capitalistic greed, while much less worse than flaws of implemented Socialism, has its evils too, Sergey.

Re:Like Father Like Son

[Xest]

I wouldn't be suprised if that's why they cashed in- so that they can do a u-turn without losing face themselves, they can simply say the investors decided for them and it was out of their hand. Still, I could be wrong, we may be pleasantly suprised.

That said, he definitely seems to be the good guy at Google- he certainly seems worlds apart from Schmidt who actually seems to believe in the surveillance state.

Re:Like Father Like Son

[Anonymous Coward]

Well, even after "cashing out", they'll still control 48% of the voting rights, so it would have to be a unanimous vote against them, with nobody abstaining. That's unlikely.

Re:Like Father Like Son

[Anonymous Coward]

Interesting, Sergey's father faced the problem of having to compromise by abandoning his faith and culture in order to get the job he wanted (astronomer) or stay Jewish and be reduced/stunted in a select set of careers.

Actually, no. In the USSR, if you were Jewish, this was written in your passport and in no way a choice. Almost certainly Sergey's father was a secular Jew.

I have the same background as Sergey (Jewish parents left USSR when I was little) and I can see precisely where he is coming from. It's scary to read all of the comments from people who have never lived under an actual oppressive government about how the US is just as bad as China, echoing the Chinese government that we shouldn't censure China for murdering dissidents and blocking large parts of the internet because we've conducted warrantless wiretapping.

Re:Like Father Like Son

[blind biker]

They didn't cash in - from what I understand, they filed a notice with the SEC (per one of the Insider Trading Sanctions Acts), just in case if they want to cash in a larger part of their securities.

That said, yes, Brin seems a nice guy through and through

Well yes... but:

[saibot834]

If only they would have stood up for free speech at the beginning, and not only after they found themselves with a disappointing 29% market share.

Re:Well yes... but:

[eldavojohn]

If only they would have stood up for free speech at the beginning, and not only after they found themselves with a disappointing 29% market share.

Er, Baidu had 1) been operating for seven years already when Google.cn was founded in China and 2) had the benefits of being a Chinese company that no doubt had leaders more in tune with Chinese culture.

Pick a country foreign to you. Now give your competitors a seven year head start. Now try to enter the market. Now tell me that 29% is "disappointing." Has anyone come even close to that against Google in the US?

I'd say 29% is pretty astonishing. What were you expecting?

Re:Well yes... but:

[Anonymous Coward]

That's not the point. Fighting an uphill battle and then at some point claiming to pull out due to freedom of speech issues isn't quite as believable as a world leader in search not entering a market due to freedom of speech issues.

Re:Well yes... but:

[Jah-Wren Ryel]

If only they would have stood up for free speech at the beginning, and not only after they found themselves with a disappointing 29% market share.

Microsoft would kill for a 29% market share of the search business in the USA.

Re:Well yes... but:

[NeoSkandranon]

Re: Baidu, It has less to do with "leaders in tune" and more to do with nationalism really.

That google was able to establish the share they did in the face of being foreigners is astonishing indeed.

Re:Well yes... but:

[jbezorg]

AC:

That's not the point. Fighting an uphill battle and then at some point claiming to pull out due to freedom of speech issues isn't quite as believable as a world leader in search not entering a market due to freedom of speech issues.

From the article:

Could Beijing really countenance a filter-free search engine? Probably not. But it also knows that driving Google from China would be a public relations catastrophe.

I think Google entering the market and then leaving has a more profound effect since that 36% of the population will actually have a tangible experience to relate to. What may happen is that Google may be able to leverage this so that censorship is less restrictive on google.cn. and in order to compete Baidu would have to do the same.

From the article:

It was Schmidt who put the business case for Google to expand into China: with 384 million internet users, it is the world's biggest digital market – of which Google has grasped about 36 per cent since 2006. But Brin and Page spent a year weighing the pros and cons of the decision on what they called their "evil scale" before approving the launch of Google.cn.

It's a pragmatic approach to "do no evil" rather than an idealistic one and in my opinion a better one since the idealistic approach would have made less progress or any progress at all.

Re:Well yes... but:

[blind biker]

That's not the point. Fighting an uphill battle and then at some point claiming to pull out due to freedom of speech issues isn't quite as believable as a world leader in search not entering a market due to freedom of speech issues.

It is exactly the opposite: claiming not to enter a market (where they would face an uphill battle to get even the tiniest marketshare) due to freedom of speech issues is much less believable than pulling out after achieving a very respectable 29%, after all the money and time invested to get to those 29%.

And you were modded "insightful"? Mods must be smoking something powerful.

the Lesser of evils

[Andypcguy]

I've set all 250 computers in my Dept. default search engine to Google. I think Evil is just a part of human nature and it takes real effort to not be evil. I applaud Google for standing up to China and forsaking monetary gains for purity of ideals.

not surprised at Brin

[roman_mir]

I am a stern opponent to anything communist/socialist in nature, being born and raised until the age of 16 back in the non-existent USSR. I am also against this buddy-buddy system, that apparently all of these so called capitalist societies have. There is no principled system anywhere, in the 'communist' countries, it's basically a dictatorship and no free enterprise is allowed to compete with it, because there is no competition, the planned economy is doomed. In the so called 'capitalist' countries now it is all about buying power in the government to push forward agenda of getting free money printed by the government.

Hong Kong seems to be the place where the society came as close as possible to the real free market system, money is created by private entities, there are competing currencies, government can't dilute the value and give preferential treatment to certain corporations, banks, etc. You don't like what one monetary system is doing, move your business to another. I am sure it has its problems, which I am not aware of, since I never lived there, but it seems to be the best out of everything I have seen or hear of so far.

I am not surprised that Brin is the guy who takes the principled stand and I would not be surprised to find out that he came up with the 'no evil' slogan. It's obviously going to be a losing battle, if we know anything about people, they'll fuck up anything until it's dead, look at HP, they used to be the 'no evil' company of engineers. I just remembered the horror stories connected to a professional firm jumping shark-ceo type, Fiorina was her name?

That's the problem, we can't live forever, so our principles die with us and there is nothing much we can do past that to promote our ideals. We try, but looks like we fail in all cases, that's too bad.

Good luck to Brin in this battle, I don't know that even his crazy fortune can fight off this one for too long and I don't know how interested he will be in that once enough pressure is applied from enough people interested in profit motive only.

Re:not surprised at Brin

[roman_mir]

Cop out ? Are you asking me if I am using the fire department service or not? I am answering to you: I am forced to only use the services, since they are already paid by the taxes. What part of 'I am already paying for it' can't you comprehend?

If I had a choice to use competing fire-departments / police departments would I be upset about the extra choices? No. I would gladly pick ones that I am more comfortable with.

Is this comprehensive enough for you?

Re:not surprised at Brin

[roman_mir]

How am I a leftie? Because I point out some turd's hypocritical statements? I didn't realize that being a right-leaning libertarian made me a leftie. I'll make sure to make a note about that.

- not a 'leftie', no, I wouldn't insult the normal people on 'the left' this way.

I read the rest of it. His whole thing about Hong Kong ignores the fact that most people in the country were basically exploited wage slaves.

- Hong Kong now has the closest system to free market economy in the world. Wage slaves live in the rest of the world, in the US it's credit slaves now, forget wages. Also it's Hong Kong, not mainland China. This is were people are doing business.

Re:not surprised at Brin

[calix0815]

>>>
Hong Kong seems to be the place where the society came as close as possible to the real free market system, money is created by private entities, there are competing currencies, government can't dilute the value and give preferential treatment to certain corporations, banks, etc.
>>>

You obviousely don't read the HK newspapers. The big tycoons have the system in their pocket. They can even control over a good part of their mini parliament because corporate bodies have exclusive voting right for some of these 'functional seats'. Just because some players can do what they like and and play the system doesn't make a free market. That kind of free market is like a duel between a marine with big gun and a five year old.

For businesses outside the tycoons areas of interest there is indeed a good and competetive market, though. In the labour market there is not really much competition possible for the labour force. Take it or leave it. The companies are unionised, not the people. But I guess eventually the erosion of wealth in the lower and middle classes will eventually lead to the most amazing collapse of a housing market the world will have ever witnessed.

In my opinion markets will always work and do what they are supposed to do. But it can take a long while and will be a very volatile process when it finally kicks in. We just had a *small* taste of it.

Re:not surprised at Brin

[Evtim]

How about increasing survival chances by working in a group? The working country should provide for this fundamental human and animal behavior pattern.
I don't get it - we have labeled basic aspects of the complicated collective behavior of an ordinary biological species (with all that implies) as "socialist" and we should avoid them at the cost of decreased chances for survival? I should hope not!

BTW, I also lived exactly 16 years of my life in a communist totalitarian state, but I do not wish "to throw in the garbage the baby with the waters", as the old ladies in my country say.....

China Betrayed Them

[Doc Ruby]

The compromise that Google made with China was agreeing to Chinese censorship in exchange for China's protection from privacy invasion beyond that allowed by the laws Google agreed to follow. Then Google saw that protection was either useless against Chinese hackers, or betrayed by the Chinese government itself (or both).

When you pay the mafia for "protection" but you get broken into anyway, you stop paying the mafia. If you can. We'll see whether Google is tougher than China's mafia government.

Re:China Betrayed Them

[elrous0]

Yep, this wasn't some moral decision. Google was perfectly happy to play ball with China until they stole some of Google's propriety code (and hence threatened their bottom line). If China had never threatened Google financially, they would happily have gone on turning over names and censoring the web indefinitely.

Re:China Betrayed Them

[Vintermann]

> they stole some of Google's propriety code

I haven't seen anyone saying they did this. What they did was attack some of Google's customers, specifically some who work for human rights in China. Granted, since it was a hacking attempt at Google itself, they could probably have gone for code instead, but that's not what happened.

China's reputation for industrial espionage may or may not be especially deserved. Their human rights record, however, there is little dispute of.

What the hell is with the summaries lately?!

[Dorkmaster Flek]

particularly regarding Sergey Brin was born in the USSR which played a big part in this decision.

Holy shit, can we please proofread summaries before submitting stories? How the hell did you people pass high school English?

Re:Corporate warfare...

[tnk1]

Could MS have done it? Yes. Did they have to? No. China's government is plenty evil without Redmond being involved. Occam's Razor and all of that.

These Remarks Are Signs of a Healthy System

[eldavojohn]

It's scary to read all of the comments from people who have never lived under an actual oppressive government about how the US is just as bad as China ...

It's not scary, it's the sign of a healthy system. If you have a population of over a million and no one is complaining about the leadership than something is terribly terribly wrong.

I will always have comments to criticize my government with and I will decide how loudly I voice them. You are correct in asserting that China is worse on censorship than the US but that won't stop people from drawing analogies to prevent the equivocation from being complete. The fact that a North Korean or Iranian or Chinese citizen cannot get up and loudly voice criticisms (no matter how true/untrue) of their respective governments is what should scare you.

I assure you that we know it's not as bad here but some of us feel that any mild form of censorship is horrible. And so you'll hear it from time to time and that's just a sign that the system that allows dissent is working. If I didn't have that to bitch about, trust me, I'd find something else. It was literally designed that way by our founding fathers and is the American Way*.

*Note: I'm not saying it was started by or is exclusive to Americans, just that it's how we expect it to be.

Re:Poor people had to leave the USSR

[jgardia]

3 room means 1 kitchen, 1 living room and 1 bedroom.

Re:That's silly.

[KarmaMB84]

If you have any size population, it is inevitable that someone doesn't like how things are being run since it's impossible to please everyone. If nobody is complaining there certainly is something wrong. They're probably just staying quiet for fear of punishment.

Japan, korea, china, etc. and why you don't get it

[zogger]

Since when didn't Japan take huge chunks of the US economy? When I first started to drive, it was really rare to see a japanese car, as in..nevah. Now? Who needed emergency bailouts again, to keep from going completely bankrupt? How about electronics? I remember when all the TVs,radios, HiFis, etc were predominantly US made, that's what you saw in the stores and in people's homes, with germany actually being second tier, then, Japanese electronics hit. Whammmo they hit. Now, how many US made TVs are there and so forth? Like zero? How about heavy equipment? We are the largest farm in this area, and just for tractors.lemme see here..we have one US made, john deere (and their smaller ones they sell are just rebadged yanmars AFAIK) *six* japanese (kubotas), three german or austrian (deutz and vetter) (that's just tractors, of course we have all sorts of other equipment, mixed as well) (and Indian mahindras are starting to sell pretty good around here now). How about motorcycles? Way back you saw some US and english bikes mostly, (harleys and triumphs mostly, with the odd bmw thrown in) Now? Rough guess, what I see is 7/8ths japanese bikes on the road, with china taking the dinky scooter market so far, but they will be expanding that. And so on

Ya, it changes around, the main point from a US perspective to keep focused on isn't so much where stuff is sourced *from*, it is where it *ain't sourced from*, which is more and more daily the USA being the "ain't". We continue to lose manufacturing all across the industrial spectrum, which is value-added wealth creation that increases the internal economy to a large degree. And hand in hand with losing manufacturing over the last four decades now, the US government and economic overlords (same dudes in the revolving door wall street/DC government axis) have had to result to accounting tricks and issuing ever more stupid compounded IOU paper to give the appearance of prosperity.

The number one US manufactured *thing* today is debt. Followed by advanced military weapons.....contemplate some outcomes there for awhile..

You can only do that "debt manufacturing" for so long before good money stops being thrown at bad money. Eventually, the planet is going to call the US on its debt and just stop doing that. Interesting times then...

This reserve currency deal, that came about from the Marshall Plan and the petrodollar phenomenon, has made accumulating all this debt possible, but it sure isn't going to last forever. You can't do this accumulate more debt than what you make on a smaller personal scale forever, as everyone knows, you'll go bankrupt and get bounced out on the street and your ride go away to the repo man, nor can you do it on a medium scale, nor even a huge large scale.

  The timeline varies on your bankruptcy and crash and repo man showing up, but not that outcome.