by YAHOO! SEARCH
Google should pull the plug on China
Updated: August 21, 2010, 4:15 AM
Here’s hoping Google makes good on its threat to quit China. It’s time someone in the United States stopped coddling the Chinese police state. The U. S. government can’t, or won’t.
Though Google is late coming around as an advocate of free speech in China, it still deserves applause. The company said recently it would stop censoring its Chinese search engine, Google. cn, as the communist government dictates — and might even close the business.
Google got religion after discovering that last month hackers — read Chinese government technicians — tried to access accounts of, and managed to steal information from, human-rights activists who used Google e-mail.
Hackers went after at least 20 other companies’ computers, including Adobe Systems, Juniper Networks and Rackspace Hosting.
Google can exit China without hurting its stockholders, at least in the short run. The company’s revenue from China would be as much as $350 million this year, about 1.5 percent of total sales, according to a report from Citigroup Inc.
Still, the potential market is huge. Some 330 million Chinese use the Internet. Google’s departure would benefit search rival Baidu no end. The Beijing-based company now has 58 percent of the country’s Internet search market against Google’s 36 percent, according to researcher Analysis International. With only 6 percent of the market left for others, Google’s U. S. competitors in China clearly could afford to thumb their noses at the police state.
It’s easy to see why most companies choose Chinese profit over political stands. China is now America’s No. 2 trading partner after Canada, with 2008 transactions of $409 billion. U. S. companies manufacture there. Money managers invest there. American companies keep doing business with the communist state in the face of complaints from the auto parts, steel, insurance and electronics industries that China manipulates its currency to help its exporters, prices products at unfairly low levels and protects its home markets from competition.
The U. S. government has both economic and political reasons for not challenging a government that muzzles its people and kills them if they get too obstreperous.
China has been the biggest purchaser of U. S. debt at a time when this country is borrowing massively to right its economy and financial system. China held about $800 billion of Treasury securities on Oct. 31. Still, China has nowhere else to invest its huge trading gains.
The political front may be tougher. The Obama administration needs China’s cooperation, for example, in its effort to curtail the nuclear weapons capability of Iran and North Korea.
Google may eventually compromise with China. That would be a shame. Someone in the United States has to let the dictatorship know what we stand for. Google slamming the door as it leaves China would be a welcome step.
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