Thursday, April 1, 2010


Google’s exit from China has lessons for both

Whether it is China’s loss or Google’s — it can be debated later, but I don't think that any other nation could have gone the China way, as far as Google episode is concerned. Google’s clash with Chinese government was not a spontaneous face-off but followed a series of disagreement over censorship laws in China. In 2006, Google launched their Chinese search engine ( in order to tap the huge Chinese market, but later didn’t comply with Chinese censorship laws, under China’s Golden Shield Project. As recent as in January 2010, Google decided to stop filtering its search results in China (following numerous cyber-attacks originating in China in order to have an access to the e-mail of Chinese advocates for human rights and many renowned companies) and has now exited China. Since March 22, 2010, Google has been redirecting all traffic to (Google Hong Kong), thereby bypassing Chinese regulations and allowing unfiltered search results.

In fact, this entire fiasco should not come as surprise to anyone. Given the political regime of the country, it was ought to happen and was largely inevitable. And as was expected, Chinese government is quite at peace with respect to Google's exit. In fact Google’s closure of its Chinese arm of search engine makes it easier for Chinese government to filter the net usage. Unlike the West — where “freedom of expression and information” are seen as an indispensable factor for successful economy and curbing such freedom can raise serious humanitarian outcries — China’s political system have never bothered about such issues! Also unlike the west, where resistance and uproar are definite in case of freedom curb, Chinese citizens try to follow their political system and to a large extent, respect and follow their political decision. And no one can deny the fact that China still remains the world's fastest growing economy despite all such civil restrictions and information-censorship.

In fact, the exit wouldn’t come as a major blow for Google’s bottom-line too, as merely around 2 per cent of Google’s profits come from China. Google was not a major player in the Chinese market and had just 30 per cent of market share. It was a local Chinese service provider, named Baidu, who dominated the market. In fact, not only Baidu, China has an answer for even ebay and Facebook too, with Chinese versions namely Taobao and Renren. As these domestic companies provide plausible alternative for all Internet solutions, China seems to be quite contained.

It is not that Chinese do not understand the ramifications of Google’s decision would undoubtedly have long term impact on its market. Not only such stances portray China as a tough destination for foreign investors but also it is quite paradoxical to envisage China as an information hub and technologically advanced country with such a strict information-censorship regulations. More so, at a point in time wherein China is trying to shift gears from “low-cost-products-making country” to “hi-tech-technology-solution-provider”. Such control of information clubbed with information hacking would definitely act as a deterrent. In the same light, as countries like Malaysia, South Korea, Vietnam and Hong Kong relaxing their censorship rules, it would really be challenging for China to establish itself as the Asia's information hub. But then as I said in the beginning — probably no other nation could have taken such an audacious step. It is no big deal that today’s Chinese Baidu, might become tomorrow's Google. But then that’s future — as of now it’s lose-lose situation for both China and Google!



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  2. Hi Sir... but don't you think that the little amount of loss that China would be getting is nothing compared to the amount of benefit. The level of corruption in the society wold fall and would be beneficial for the citizens. In fact even India should take similar steps and help our nation move forward for the uplift of the country and rather not get affected by the exploitation of the capitalist nations.

  3. Hello,Sir..what i think is...
    Google has been known for its ethics and has a very strong fan following for its name and informal motto "don't be evil", they have become synonymous with freedom as far as net users are concerned, with increase in competition from MS-Bing and Yahoo, I think it was the best strategic step Google could take to ensure its fan (users) remain loyal to it and as u mentioned they dint loose much in return.And on the other hand China got what it always wanted.
    so i think ....its been a win-win situation for both ...