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Google's pulling out of China: Who will get hurt?

Google's threat of pulling out of China has caused quite a stir. The world's most popular search engine said that its potential retreat is due to the cyber attacks and surveillance originated from China "combined with the attempts over the past year to further limit free speech on the web". However, the influence of Google's announcement has gone beyond the Internet and directly resulted in negotiations between the Chinese and US governments.

On January 13, US Secretary of State Hilary Clinton said that the Google situation "has raised very serious concerns and questions"; US Commerce Secretary Gary Locke called the issue troubling; and White House spokesman Robert Gibbs expressed support to "the freedom of the Internet".

Meanwhile, China also responded quickly. Wang Chen, director of the country's State Council Information Office, pointed out that information on the Internet is a national strategy resource and that the Chinese government will continue to strengthen efforts in guiding public opinions on the Internet.

This incident can be seen as another case of trade friction between China and the US since the breakout of the global financial crisis. However, as Google can be ruled as a media company in some aspects, its potential pullout stands out among several recent anti-dumping and anti-subsidy investigations. Whether or not Google exits the Chinese market is not just a simple commercial decision; the search engine may have to focus more on the political level than corporate level.

Shortly before Google's announcement, Hilary Clinton was reportedly set to announce a new technology policy to help citizens of other countries gain access to uncensored Internet resources. The two incidents are obviously connected.

In my opinion, the Chinese government and Google both have their own logic and rationality for the stand they chose to take. With the impact of Internet growing quickly in recent years, the Chinese government expanded its supervision and regulatory system to cover the Internet. However, the country is always consistent in its action of reinforcing public opinion supervision. Also, the clean-up and rectification of indecent Internet content was conducted according to relevant laws and regulations in China. On the other hand, Google acted in accordance with its motto of "Don't be evil" and prioritized moral concerns ahead of business, a decision which also gives no cause for criticism.

Therefore, it's clearly difficult for the two sides to reach an agreement on how to be both safe and free on the Internet, despite the intervention of the US government. At this point, there's little room for concessions to be made.

If the Chinese government chooses to loosen the censorship rules on Google, it has to do the same for all websites operating in China. If so, it will far exceed the bottom line of China's public opinion supervision policy.

As for Google, although its threat has won over some support in the international world, pulling out from China is still a painful choice. Although currently the Chinese market's contribution to Google's total profit is still small, there are great potential business opportunities in the future. Also, Google has attached great importance to the Chinese market, which is why it previously agreed to China's Internet censorship and has been acting cooperatively on issues such as the clean-up of obscene contents and the negotiations on its copyright infringement.

Google is not the only one that will get hurt in this incident. Once Google ends operations in China, the country's billions of Internet users will all have their interests hurt, for they may not have the opportunity to enjoy the dazzling new technology and products in the future.

If Google is gone, China's Internet search engines market will be left with the only one major player Baidu. An oligopoly market won't do any good to healthy market competition or the protection of the interests of domestic consumers and advertisers.

Previously, even with Google's presence as a competitor, Baidu was guilty of adopting a competitive ranking system, under which the search engine places its client companies' names at the top of the search results. This business secret of Baidu's, which was exposed on CCTV in November 2008, soon stirred up public criticism in China and led to a slump in Baidu's credibility.

Lastly, if the Chinese government takes a hard-line stance on this issue, it might further tighten censorship and supervision on Internet security. As a result, domestic websites will be more obedient to authoritative rules, which could subsequently lead to a setback in China's Internet opening-up and liberalization process. China's newly established image as a major power and responsible nation in the international community will also be compromised.

Therefore, in this sense, no one wins in the Google incident, except Baidu.

The author is a commentator with www.eeo.com.cn based in Beijing.

(This article was translated by Yan Pei)