Will Secretary Clinton’s Speech On Internet Freedom Kill Google’s Hope For A Compromise in China?

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  • on January 21st, 2010

Secrectary of State Hillary Clinton is delivering a speech in which, according to the Wall Street Journal, she will announce that “the U.S. plans to make unrestricted access to the Internet a top foreign-policy priority.” I think it is wonderful that the U.S. will push Internet freedom globally. But the timing could probably not be worse for Google ($GOOG).

Google has signaled its compromise position in China, as reported by the New York Times-Google Hopes to Retain Business Unit in China:

“Google has said it is prepared to shut down its local Chinese-language search engine, Google.cn, unless it is allowed to run it uncensored. The company has also indicated that it would like to retain much of its operations there, including its growing ranks of Chinese engineers, its sales force and its toehold in the country’s mobile phone business.”

The New York Times is also reporting that both the Chinese government and Google want to treat the issue as a commercial, not a political or foreign policy dispute. Smart positioning for Google, even if i think it is a mistaken interpretation. Evgeney Morozov makes very good points in a post today-Google+US Government=Love. Morozov argues that:

“Google has managed to turn their business quandary over what to do about China into a political affair, with the US government having no choice but to play second fiddle to Google’s first. Now it’s not just Mountain View vs Beijing, it’s Washington/Mountain View vs Beijing. Brilliant. No wonder Google has been hiring all those smart policy types with government experience: you can see they are acting very smart.

It’s a very high-risk gamble they are playing but keep in mind that Google needed to sort out their China problem anyway – it’s better to do it now, with full support of the US government/policy-makers, than later (imagine the kind of publicity fallout were it to be known than the email accounts of the Chinese human rights activists were compromised and Google didn’t warn anyone else about it).”

Back to Clinton’s speech. There is no way this speech won’t politicize the Google-China dispute. Which brings me to another official policy pronouncement, one made in the pages of “Seeking Truth” in December 2009 by Meng Jianzhu, the Minister of Public Security. Surprisingly this speech has not come into the Western media discussion around the Google China brouhaha. I quote from the always useful China Digital Times:

“The title of the article is “Intensify the Construction of Five Capacities, Comprehensively Raise the Level of Stability Maintenance”. The following paragraph is from the article (via news.163.com), translated by CDT:

Currently, the social and economic development of China shows a series of new transitional characteristics. In the domain of social stability, there are heightened conflicts among the people, a higher crime rate, and a complex situation in the struggle against enemies. The Internet has become a primary method for the anti-China forces to infiltrate us and amplify destructive energy. This provides new challenges in maintaining state security and social stability for the Public Security agencies. The interconnectivity, complexity and sensitivity of different kinds of social conflicts has apparently increased, bringing new challenges for public security agencies in controlling the complex situation. All kids of criminal activities and social order issues are growing in scale. This also presents new problems for Public Security agencies managing social order. People’s consciousness of the law and consciousness of rights have obviously increased, and the level of public opinion and social supervision has increased to an unprecedented scale. This requires new standards for Public Security agencies’ law enforcement activities.”

The key phrase in the context of today’s speech by Secretary of State Clinton is “the Internet has become a primary method for the anti-China forces to infiltrate us and amplify destructive energy.”

There are many constituencies inside the Chinese government, many of whom no doubt see the benefits of working out a compromise with Google. But I fear most of those people may be relatively powerless, especially in the face of the current massive campaign by the Party and the security services to regain “control” of the Internet. Chinese leaders usually mean what they say, especially when what they say appears in “Seeking Truth”.

And from the perspective of the official in charge of public security who is very worried about and committed to dealing with threats to the Party’s rule, especially from the time-honored “anti-China forces”, there is no more obvious threat than the owner of the largest and most accessible information network on the planet-Google. Given how large Chinese companies generally tend to work with the Chinese government, which makes many Chinese officials assume US ones work with the US government, and given what Clinton is likely to say today, I have no doubt Minister Meng and his associates will believe that Google is part of a larger set of anti-China forces bent on “amplifying destructive energy”.

If I had to bet on the outcome of a bureaucratic battle in China, I would put my money with the security services, especially when the other side is a foreign firm like Google.

What do you think? Please let me know in the comments.

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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