Kaiser Kuo presented today at SXSW about Google in China. He spoke about how the Google situation will impact Chinese Internet users, other companies and the Chinese government.
In the presentation, Kuo (who also spoke to ReadWriteWeb a week ago) clarified how censorship in China works. Contrary to popular belief, it is not the Great Firewall that has the most impact in China - but something China calls "self-discipline." Kuo also discussed what the next moves will be from Google, since he believes that the ball is in Google's court and Beijing won't push the situation.
History of Google in China
Before getting down to the nitty gritty of the current Google-China standoff, Kaiser Kuo gave some valuable context to Google in China.
In 2005 Google started to hire aggressively in China, he said. Google's decision to enter China with a censored product immediately brought grief to Google, with some pundits describing it as a "black day for Internet freedom." Google defended its actions at that point by saying that not providing search to a fifth of the world's population would be a greater loss than having censored results.
At first Google had a notice on their search results stating that they were censored. Kuo also pointed out that Google only omitted results that users wouldn't have been able to view anyway had they clicked through (because the pages or sites were blocked). At that point, Google didn't host Gmail, personal search history, Blogger or other services that had personal information. Google in China also protected their employees, Kuo noted.
Google never had an easy time of it in China. For example, many Chinese users couldn't spell the word "Google." Regulators made it difficult for them, as did their Chinese competitors. Google did manage to make good revenues and market share, but never "moved the needle" against its Chinese search competitor Baidu. Kuo remarked that Google was not singled out for any special treatment by the Chinese government.
In 2009 Google got into trouble due to pornography in its search results, and it went dark for a short time as a result.
There has been a massive growth in Internet users in China in the four years since Google entered that market. There were 2-3 million Internet users in China when Google began operations there; now there are 384 million Internet users in China. Google has around 35% market share in China, which has not been matched by any other Western company. Its annual revenues in China is around $300-400 million in revenue, which is nothing to sneeze at.
In mid-December 2009 there was a hacker attack on Google, which in January Google claimed on its blog came from China. At that time Google also announced it would stop censoring search results on google.cn. Kuo doesn't believe this announcement was a cynical retreat from China due to its being defeated by Chinese competitors, which many pundits suggested at the time.
Kuo said that the challenge to Google's business model is around trust, for personal data in the cloud. So Google's blog post in China was appropriate, Kuo believes.
Some people have suggested that the Chinese government used the strategy known in China as "Using Quiescience to control action." The government has however unblocked Google Docs and Groups, and has not blocked any further Google services since January.
Currently Google is still hiring in China and is in the midst of negotiations with the Chinese government. Kuo believes there is deliberate confusion right now."It's impossible to grasp what Google is up against without having a better grasp of how censorship in China works."
The Great Firewall
There are two main types of Internet censorship in China, said Kuo.
The first is The Great Firewall of China, which has been nick-named "Iron Curtain 2.0." It's a system of filters at domain name or page level. Twitter, Facebook, YouTube, Blogger and other western sites have been blocked at this level. Kuo said that it's fairly simple for Chinese Internet users to "hop the firewall " using proxy services, free VPNs.
So The Great Firewall is more of an inconvenience. Kuo pays for a VPN that allows him to access Western websites.
The second form of censorship is "more pernicious and effective," according to Kuo. It is carried out by Internet companies, on instructions from Chinese government. All Internet sites in China have to practice what is termed "self-discipline."
Failing to adhere to this form of censorship means having your website or service shut down. There are some 30,000 "Internet police." Two cartoon avatars are wont to show up if a Chinese user visits pages with content offensive to the Chinese government.
Most Internet users in China don't come across the Great Firewall, because most Chinese Internet users don't use Western services like Twitter and Facebook. But, Kuo said, "Google is different." It has become "a real part of the Internet culture in China."
Kuo then talked about how Chinese censorship nowadays is almost all social media sites, such as social networks and microblogging sites.
How Chinese Netizens Use The Internet
Kuo mentioned that the Chinese Internet is more "entertainment superhighway" than "information superhighway." Online gaming is big in China. Most Chinese Internet users, Kuo said, enjoy the Internet that they have - rather than worry about the one that Western pundits think they should have.
The Internet has also emerged as a de-facto public sphere in China. As long as you don't overstep certain boundaries (political activism and so forth), then the "will of the masses" is often expressed on the Internet through the likes of bulletin boards or social networks.
Regularly, Chinese netizens are exposing public officials. However Kuo warns that there are "very very serious limits" to what is emerging in the public sphere. For example, anonymity leads to a lot of trolling. It's ad-hoc, reactive and informal - however it is a "squeaky wheel that is regularly getting grease." Also, a minority are pro-democracy - most of the netizens in the public sphere are pro-Chinese government.
Next Moves from Beijing and Google
Kuo said that the Chinese government will wait for Google to make the next move. It realises it has nothing to gain by pushing Google or being openly hostile. The ball is in Google's court and it will probably keep to its word that it will stop censorship in China. It may still shut down operations in China, which in practice means closing google.cn. But this has a lot of problematic scenarios - including the difficulty of having translations done for Google.com and staffing issues of closing down.
The pros of pulling out of China include saving face and appeasing western users. But the cons are significant. They include a backlash from tech-savvy, urban Google users, a setback to scientific research, a global black eye for their image, and ceding the virtual monopoly in search in China to Baidu.
The moderate scenario is that Google.cn is shut down, but continues to work with its mobile partners in China, R&D and sales continue to operate in China, and Google services will be unblocked.
The best case scenario, Kuo believes, would be if Google stopped censoring google.cn - but the service stays online.