Google China headquarters in Beijing
It certainly is not every day that a major multinational corporation announces that it is considering pulling out of China, an enormously lucrative and growing market. For example, GM sells more Buicks in China than it does here. GM’s turnaround largely depends on how it will grow its China business. But yesterday, Google announced that it was seriously considering leaving China and its 298 million Internet users. Why? Because the company says it “detected a highly sophisticated and targeted attack on [its] corporate infrastructure originating from China that resulted in the theft of intellectual property from Google.”
Google’s announcement is a potentially seismic break with the past, and represents an important change. Historically, U.S. information technology companies, including Yahoo! and Microsoft as well as Google, have made efforts to accommodate Chinese authorities who insist on government monitoring of China’s firewalled piece of the Internet. While human rights may be a factor in Google’s decision (the company’s motto is “Don’t be evil”), this is much more about the technology the company develops to further its business. If China is unwilling to accept global standards regarding the protection of intellectual property, then Google will choose not to do business with China.
We have heard multiple times about the offensive cyber campaign waged by the Chinese government to collect information by clandestine means through computer attack. Last year, The Wall Street Journal reported that plans for the Defense Department’s F-35 Joint Strike Fighter were compromised by cyber attack, likely from China. Other networks at the Department of Defense and State Department have also allegedly fallen under cyber attack from Beijing’s agents or their proxies. The University of Toronto’s Ghost Net project claims, and holds a fairly damning evidentiary trail, that Chinese sources compromised the computer network of the Dalai Lama. China is clearly throwing its weight around in the cyberpower domain.
What has happened is a fascinating flip-flop in position between industry and government. For the last decade, Silicon Valley has accepted China’s peculiar needs in exchange for the opportunities to develop business there. At the same time, many in the U.S. government have decried, both publicly and off-the-record, China’s increasingly intrusive cyber-spying practices. With Google’s announcement, the company may lead others in industry to set tougher terms with Beijing, even as the Obama administration works to improve relations with it on a host of economic and political issues.
This may not make Treasury or State Department officials happy, but Google is the current leader in a long line of companies stretching back from Western Union and AT&T through IBM and Microsoft that have represented American leadership in information management. What might happen when it is a Chinese, not American, company that fills that position after Google?
Christopher Bronk is the Baker Institute fellow in technology, society and public policy. He previously served as a career diplomat with the United States Department of State on assignments both overseas and in Washington, D.C.