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Google Outage Shows Risk of Doing Business In China
Hugh Pickens writes "The WSJ reports that widespread disruptions to Google in China over the weekend, halting use of everything from Google's search engine to its Gmail email service to its Google Play mobile-applications store, underscore the uncertainty surrounding Beijing's effort to control the flow of information into the country, as well as the risks that effort poses to the government's efforts to draw global businesses. The source of the disruptions couldn't be determined, but Internet experts pointed to China's Internet censorship efforts, which have been ratcheted up ahead of the 18th Party Congress. 'There appears to be a throttling under way of Web access,' says David Wolf, citing recent articles in foreign media about corruption and wealth in China spurred by the party congress and the fall of former party star Bo Xilai, 'that's their primary concern, people getting news either through Google or through its services.' Beijing risks a backlash if it were to block Google outright on a long-term basis, says Wolf and such a move could put Beijing in violation of its free-trade commitment under the World Trade Organization and make China a less-attractive place to do business. 'If China insists in the medium and long term of creating another Great Firewall between the China cloud and the rest of the world, China will be an increasingly untenable place to do business.'"
You have to abide laws everywhere in the world. This includes abiding Chinese laws if you want to do business there. China has many gigantic internet companies that tailor their sites and products specifically to Chinese market and they are doing just fine.
Remember that you don't hear these news about Baidu, Bing or other chinese search engines and technology companies. It's only Google that seems to be having huge problems in China. Not only with the Chinese government but also Chinese competitors and the way of life. Again, the Chinese versions of Twitter, Facebook, Google etc. are doing just fine.
Fact is, Google has never really had that good market share in China. Baidu has always been a clear winner. This has led to Google annoyingly complaining about the state of things. They are, for once, the monolith that doesn't want to change. This same holds true for Russia and CIS countries where Google is losing to Yandex.
Just like the record companies in the western world and US need to change their business, so does Google in China. More importantly they need to stop bitching and complaining when things aren't going like they would want them to go. For example, Baidu offers mp3 search engines where people can download music for free, legally. Google called quits on such service (they used to run it for a while but never gained popularity).
The fact is, Google is not struggling because the Great Firewall or because the government makes competition hard. Google is struggling on their own regards and only by themselves. They seem not to be able to justify their existence in China and doesn't seem to offer Chinese citizens what they want.
Google is also struggling because they don't have the data points Baidu has because of it's size. They have that in the west and that's also why Google seems to be better than Bing. In today's search engine market not only is your algorithm necessary, but also great amount of data that you can collect. That data is what ultimately makes your algorithm work. Google does not have that in China and Russia and that's why they're struggling in those markets. Not because of the government.
Just stop doing business with China, then.
They do this crap because they know they can get away with it, since everybody will try to do business with and in China anyway.
If you care, just take a firm stance and do business elsewhere.
if this could be related to the BGP routes issue last week
http://blog.cloudflare.com/why-google-went-offline-today-and-a-bit-about
seriously, there should be a 1 strike rule on announcing prefixes that are
not in control of the announcing entity.
dreaded scurrilous bit-twiddler from Oklahoma
to do business?
really?
since when do we CARE ONE BIT about freedom when it comes to the almighty dollar?
we'll be in china even if they start executing puppies and kittens in the streets.
there is nothing in this world that will cause western capitalism to turn its back on china.
stop acting like we have any morals here. we don't. we worship money and anything that gets in its way we will stomp on.
other than that, we could really care less what they do. and they care less about what we do.
as long as money flows, the guys who run things are happy to eat popcorn on the sidelines and watch the world burn.
--
"It is now safe to switch off your computer."
It's about time western companies towed the line of the so called developing world. Good China is standing up to Google.
Governments in the west can be hypocrites who on one hand fight for the "protection of life, liberty and the persuit of hapipiness", while on the other, they encourage abortion; like *cough, cough* Canada, *cough*, the fetus in this case not given a chance to enjoy the same freedoms.
China lacks rule of law, it only has rule of the rulers.
Thats the big problem with doing business in China, there is no actual Rule of law.
Test your net with Netalyzr
I ask because unlike other 'major' western democracies, the UK has no written constitution and its doing well.
So again I ask: Should China have the "rule of law", just because some western countries have it?
Let's remember that it's one thing to have rules and it's another to actually follow them. Some governments in the west have ignored their own rules too. Just saying.
real prob7ems Visit
I suppose this is just another thing that needs to be repeated until it is generally accepted. You know, kind of like "smoking is bad for you and everyone around you."
There are ample examples of how doing business in China have turned really bad on all scales. It is especially obvious when heavy tech such as aircraft and train manufacturing have been screwed over by the promises of the Chinese government which were later revoked causing amazing damage to the companies who put their faith in what they were told.
We all want to have those WalMart prices in everything we buy. Lower costs of everything from materials and manufacturing to labor and delivery are things we ALL want. But there are risks and I measure those risks with every transaction I make on eBay. (And I am talking about pennies, not billions of dollars.) The risk is heavy on my mind always. But then again, it's the question of risk isn't it?
These days, whether people realize it or not, but the risk to business has largely been shifted to employees and the general population. When things fail or go badly, who feels the pinch worse? The people on wall street or the people on the street? Somehow, we got to a place where risk is socialized and rewards are privatized.
So yeah.... there is risk to doing business with china, but the risk is socialized... it's on all of us and we have little we can say or do about it.
Mod parent up. All this also applies to users who buy stuff from stuff made in China, which is about everybody.
If you think enough people are willing to buy only American (or European or whatever) start a company that does just that and become rich. Unfortunately you will fail, because not enough people care.
Don't fight for your country, if your country does not fight for you.
Troll moderation is SO unfair...
Nothing forces a corporation to uphold the rights of ANYONE without some outside influence. If they can game the system they'll do it.
While some particularly "sensitive" content might be technically in violation of Chinese law (the law might be wrong even then, but that's a different matter), the majority of the GFW'd content are not illegal, even in China, and very often they would not even be considered sensitive in any way. On the other hand, we do have computer security laws, and disrupting the public Internet via passive and active attacks, as the so-called GFW does, is probably as illegal as they are in developed countries, and I am not aware of any law that grants special permission to such behavior, as it has little to do with either law enforcement or national security.
We still have many "old-thinkers" in high positions that do not realize the importance of network security or even rule of law, let alone free speech. It would be extremely attractive for companies to exploit the naivete of such people for their own profit; in other words, it is protectionism, and a rather corrupt form at that. While I don't know who is actually doing this, I find it rather unlikely that nobody has thought of this.
You have to abide laws everywhere in the world. This includes abiding Chinese laws if you want to do business there. China has many gigantic internet companies that tailor their sites and products specifically to Chinese market and they are doing just fine.
Laws? What part of the OP mentioned laws? In what way is any of what you said related to the disruptions?
All mighty dollar?
Somewhat of a stretch isn't it?
http://goldprice.org/gold-price-history.html#10_year_gold_price
They're just degrading service, rather than blocking it. If you degrade service, people will naturally move away because they will think it is the service's fault, not the government's fault.
lead develope8s dEsign approach. As
Is it just me, or isn't this exactly the same as submitting an app to the Apple App store?
You never know if you'll be allowed entry, and can get the boot anytime for no reason...
Even gold is priced in Dollars.
Its got nothing to do with morals. Businesses won't operate in China if they can be shut down on a whim, much too risky.
and if the internal operation of your business depends on something as flaky as the internet then prepare for profit loses.
Chinese gov. is counting on businesses being lead by short-thinking greedy fools. Look at Trans-Mag, Germany's cool and innovative mag-lev. China agreed to buy it and gave assurances that their tech would not be stolen. To assure that, Germany had posted guards at various locations to stop China from entering. Then China simply sent in the red army, forced the doors open and allowed a number of engineers/academia's to look over the tech. As such, China is now developing a number of new low-cost mag-levs based on Germany's approach.
Boeing and Airbus have been FOOLISH in allowing China to do various parts of planes. Sadly, Boeing gives one part of a plane to China and buys Boeing. But then China approached Airbus and says that if you will give us a different part from an airbus plane, then we will put that plane on the approved list. IOW, Chinese gov. is making sure that they get access to ALL of the tech because so many western companies think short-term.
I prefer the "u" in honour as it seems to be missing these days.
Sadly, it is not the risk that is socialized. Only the losses. Any gains, no matter how short, stay with the foolish western company and the investors.
I prefer the "u" in honour as it seems to be missing these days.
cf title
They actually do kill cats for food in the streets via flailing, so you've got that going for your post
If the USA wants to see its economy survive, this is the time for a total embargo of all Chinese made, owned, or controlled products.
Sure, Americans will scream and hate having to pay higher prices.
If they want jobs, there is no longer any choice.
This will never happen though.
The 1% make too much money from China.
Gold is priced in anything.
I can buy gold for SEK, I could likely trade gold for silver and if I offered you enough gold you'd sell me a house.
You should be ware of doing business using Google as if you have all your business depending on one vendor then when the vendor is or not made available you are stuck.
China is not my best friend but they have their political and economical reason for controlling information as we like to think we have the right to do the same in the US. On the other hand, Google is a private corporation to whom we tend to entrust way too much information to.
Good luck
Doing legal business inside the USA doesn't seem to be any better for some companies.
* ICE can and will take over your host.
* Domains can and will be seized withuot due process
* DCMA takedowns overrule sensible checks
The USA isn't any better these days.
I don't really believe all this, it was just to make a point. The Chinese government is bad too, but at least there, you expect to be screwed when you do business. Just ask Seimens, Microsoft, Apple, Qualcom, and any other non-Chinese company attempting to do business there.
It's "couldn't care less". If you could care less about it, then that means that you do care.
However, the rest of what you say, I agree with 100%.
sorry but you are wrong.
today, already, businesses can be 'shut down' by the US gov in the US or the china gov in china. even if you follow laws, the US can shut you down if they 'want to'. they can grab your domain and hold onto it and return it, maybe, years later with no apology.
does this stop business?
NO!
they consider punative things 'cost of doing business'. its in their cost analysis they all do. they assume they'll get sued for X amount, have to pay Y sometimes, and still the remainder makes it worth it.
even if they lose all tooling and IP they have in china, they (the company) still has probably made enough to justify a short stay there. and when the 'all clear' horn is sounded, they'll pop up as another name and start all over again.
--
"It is now safe to switch off your computer."
Ching Chong
Ping Pong
Ling Long
Nip Nong
They won't fail because not enough people care. They will likely run into insurmountable difficulties. The chain for any given product is likely tied to something from China and/or other similar states. There are I'm sure many commodities for instance that aren't sourced here or non-commodities for that matter. The last remaining mines for rare earth are an example. However if you look at electronics there are only a handful of companies designing any particular piece. Are you going to run your business off paper manufactured in the USA? Because if you are your likely breaking the law. Many states have passed laws/rules/etc which require your to submit and pay taxes online.
Well, lets look at that.
There's a country that is still breaking their WTO commitments for, among other things, putting a protectionist tariff on Canadian softwood.
This doesn't seem to have hurt their standing and caused WTO to go all nuclear on their ass...
I take it you have never been in China? The only risk right now is not doing business in China. The western world is broke, these guys are a manufacturing powerhouse, cheap labor, cheap housing. Don't be a fear monger if you don't know what you are talking about please. Expanding into Asia is a great way to improve your business, no matter what you are producing.
And you may have to leave your stuff behind, but that's no different from losing all those apps you bought neither.
Google outage shows only the risk in doing business with Google and nothing else. Stop cold war rants.
Well, there are risks in doing business in China. Really, if you think you should not interest in politics, then politics will have interest in you. But in that case, it is to depend on Google for things like email that seems like the bad decision, in my opinion. When you are in China, you knowwithout being a conspiracy theorist, that the government does eavesdrop on you, or at least can.
What will you do the day where the SSL certificate from Google says it is invalid? Will you really resist getting to your email account once it is solved? Will all of your employees? How will you tell them not to, without email? Do not use gmail, have your emails in a local client, have backup smtps and VPNs. And fund Tor if you do business in China : this is an infrastructure you may need in such a time. Seriously, think about it : all your competitors are down for a day. How much is it worth to still be running?
The Wise adapts himself to the world. The Fool adapts the world to himself. Therefore, all progress depends on the Fool.
The western world is not "broke." When the western world is "in debt" the next question is "two whom?" That's where you will find some obvious answers to obvious questions.
We don't need to do business with China. We *want* to save a few bucks to increase our profits or at least to lower our costs. Without these savings or cost reductions, how can we guarantee a ridiculously large bonus... a bonus so large that even people in the top 25% earning bracket would never make so much in a life time.
We live in a time of incredible greed and lust for power. The banks own the nations of the world. But I learned something about debt some time ago. It's only something to worry about when someone else is willing to do something to you as a result. In our case, it's pretty much nothing to worry about. The "federal reserve bank" is not about to foreclose on the US or any other country. The moment they do, they become immediately visible and all debts get cancelled by virtue of revolution.
WSJ is yet another masturbating eunuch.
Nobody is holding a gun to Sergey and Larry's head to be in China.
If businesses don't like it, they are perfectly free to leave the country.
But it appears businesses don't have a problem with being in China (are you writing this down WSJ?), which is forecast to overtake the United States as the largest economy in the world in 2016 (no citation, just heard it on television).
"There appears to be a throttling under way of Web access," said David Wolf, founder of consulting firm Wolf Group Asia.
So this little piece of booger is telling people not to do business with China...But his company appears to be trying to profit from "Asia".
So Dave, which is it? Are you about to shut down your business?
Google's predicament in China is entirely self created. Google elected to leave China in response to a hack attack perpetrated / tolerated by the Chinese government. Mr. Brin played a large part in the decision largely based on his experience growing up in Russia. China != Russia. Google made a huge mistake leaving China. Google used to own half of the market, now they own a fraction. Eventually Google will make a good business decision and return to China, but until then those of us living in China will just have to deal with Google's infantile hubris.
The way to affect change is to be active in the community. With Google out of China the Chinese government has no use for them. For the most part Chinese people do not care one iota about Google. As a businessman doing business in China I can tell you emphatically I do not care about Google or their market share in China. Google is a Harvard Business School textbook case of what NOT to do in China. And David Wolf's statement that if work on the Great Firewall continues China "will be an increasingly untenable place to do business" is a joke. Google's failure in China does not affect those doing business in China.
Actually, the article is right.
I am a businessman in China.
They don't mean "untenable" as in not breaking moral conscience or human rights or laws common to human societies.
They mean "untenable" as in difficult to make money.
The Chinese Communist Party has made current China and its Chinese without any morals or loyalty. It is common knowledge everyone's goal there is to get rich as quickly as possible using corruptions and cheating and outright violence, so that they can get foreign passports for themselves and their immediate familys to flee China. (which every high government officials and rich person have done successfully)
What this means in business is that there is no long-term incentive for anything e.g. basic research, integrity, trust, loyalty to business partners or companies etc.
Therefore for foreign companies trying to do business in China it has become "untenable" because after you have invested money you find your assets and business stolen by your employees and people all around you, money extorted by local officials, and whole business taken from you literally by the state.
Ofcourse, for such "business model" without any core value or laws it won't last forever.
It can manage for a period, with central planning, mass everyone to modernize and spark high growth to the untrained eyes. But ultimately it is borrowing from the future and inevitably the whole system will come collapsing down like a house of cards.
Because like a house of cards, there is no collective rules and regulations, no moral guidance, no incentive for long-term common goals.
In the near future (no one can predict exactly when) China's economy will run into a wall (if not already because official figures surely won't tell you). At that stage things become really interesting with the Chinese Communist Party, because they only thing they can offer the people in return for ruthless dictatorship i.e. high economic growth, is no longer available.
It will be a place of 1.3 billion very angry people who are set loose. (they are already very angry right now with massive social unrest all across the board)
It may not happen tomorrow, or next week, but it is bound to happen because what is outlined above is just basic classic human conditions.