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Clash of the Titans

In: Business and Management

Submitted By Eilyn
Words 1327
Pages 6
How the Democratic Republic of Google is testing China's appetite for democracy itself.

Published Jan 15, 2010
Google's decision to defy Beijing's rules censoring the Internet could be seen as an isolated event—one company pulling out of China for a set of specific reasons. Certainly many other firms are acting that way, hoping to continue their pursuit of profits in the fastest-growing market in the world. But in fact Google's decision reflects important and expanding strains within China, and in its relations with the rest of the world.
"China places unique limits on information," Google CEO Eric Schmidt pointed out to me last week. It is the only major country with an elaborate, formal system of censorship that all information-oriented companies must accept. That's why in China, if you type the words "Tiananmen Square" or "Dalai Lama" into Google (or Baidu, the country's leading search engine), you will find mostly blocked sites. At the same time, China has been busily developing the world's most elaborate apparatus devoted to cyber-spying and cyberattacks. Chinese hacking has ramped up over the past few years, directed not only at human-rights organizations, but, importantly, at foreign businesses and governments. Many, if not most, such attacks originate from China; former National Security Agency director William Studeman has called them the "biggest single problem" facing the U.S. national-security establishment.
Great powers spy on each other, but China's efforts appear to be unusually intense. They are also new. U.S. officials who have served in the People's Republic say that only a decade ago, they didn't need to sweep the U.S. Embassy in Beijing for bugs because the Chinese government would never spy on America so blatantly, for fear of the loss of face it would suffer if discovered.
The most significant shift that might be taking place in Beijing right now is an increasing disregard for its relationship with Washington and the West in general. During the 1980s and 1990s, Beijing's strategy of modernization produced a simple foreign policy: be nice to the West, particularly the Americans. The Chinese government needed the United States as a source of capital, as a market for its exports, as a provider of technology and know-how, and as a political ally to achieve China's goals, such as membership in the World Trade Organization. From Deng Xiaoping to Jiang Zemin, China's leaders followed that path and kept their eyes on the prize.
But over the past few years, China has been changing. Many within the ruling elite seem to believe that they no longer need the United States as much as they once did. How else to explain Chinese behavior toward U.S. officials and businessmen? At Copenhagen, China displayed an unprecedented level of disregard for the United States and other Western countries. Here is the former National Security Council official and seasoned China scholar Kenneth Lieberthal's analysis of that event and Chinese Premier Wen Jiabao's negotiating strategy:
"Chinese diplomacy at this meeting overall was somewhat puzzling. Second-level Chinese officials showed up at critical meetings of heads of state on Friday afternoon—the kind of clumsy tactic that Beijing is usually far too smart to employ. The open dissent at the Friday-evening meeting—including having one member of Wen's delegation shout and wag his finger at President Obama—suggests that Wen had lost control over his own negotiating team. (Wen told the translator not to translate this official's initial outburst and then simply ignored him the second time he raised his voice.) Was Wen going beyond the limits of his negotiating authority? Were members of his negotiating team protecting their personal flanks back in Beijing?"
Whatever the explanation, Beijing's behavior was novel. The Chinese government is usually obsessed with protocol, and would never before have treated a head of state like Obama, who outranks Wen, so cavalierly.
Times are changing, and perhaps Beijing is reflecting these changes. Over the past decade, China's own internal market has grown; its exports to non-Western countries are now significant; it has vast capital surpluses of its own. All this might be making China less willing to accommodate itself to Western ideas, companies, and governments. Western business leaders report that the Chinese government now frankly admits it wants to develop local champions and will not give Western companies unfettered access to the Chinese market.
In this sense, China does not resemble other small East Asian countries like Singapore or South Korea, which maintained an outward orientation even as they grew more advanced. Because of its size, China appears to be fixated on its internal dynamics and less focused outward as it moves up the economic ladder. China's cultural tendencies toward solipsism and a Leninist political system that feels threatened by some global trends only add to this growing parochialism.
Another recent shift has been the renewed centrality of the state. Yasheng Huang, a scholar at MIT, notes that during the 1980s and early 1990s, China's growth was mostly led by the rural, private sector. More recently it has been driven by the urban, public sector. This has empowered the state in the economy, a phenomenon that has accelerated over the past year as China spent 12.3 percent of GDP on its fiscal stimulus.
Whether Beijing's actions—toward Google, other Western companies and countries, and the Obama administration—are part of a new strategy remains to be seen. There are voices in China, often called "the new right," that advocate a more muscular, aggressive approach for Beijing. But China's leadership might also be divided, uncertain, and confused. Its actions might be the result of tactics and blunders, not strategy. (This is often the case with governments, and we on the outside mistake confusion for conspiracy.) Beijing confronts a set of new challenges abroad and at home, not the least of which is a looming succession struggle within the Communist Party.
Will China's new attitude cost it in economic terms? Perhaps. Certainly many scholars, like Carnegie's Minxin Pei, argue that the tensions between China's authoritarian regime and its economic ambitions are growing as the economy and society modernize. Schmidt argues that limiting information and communications cannot produce the kind of economic growth, creativity, and productivity that China seeks in the long run. But whether or not that is true, one thing is becoming clear: while the Internet is changing China, China is also changing the Internet. And while globalization has shaped China, China is also shaping globalization.
We have assumed, perhaps too easily, that China's rise would be accompanied by a process of modernization within that country that would make Beijing easier and easier to deal with. And in many ways that has proved true. But now we must confront a prospect that I have worried and written about—that China's rise will reinforce Chinese nationalism and a sense of uniqueness and actually make the country less likely to easily integrate into the global system.
The world transitioned seamlessly from British to American global hegemony largely because the two countries had very similar conceptions of global order and values. Both were seafaring, free-trading countries, with a High Protestant mission and a sense of shared universal values. As China's voice rises in the councils of the world, we will notice that it speaks in a very different language than the Anglo-American dialect. And this might prove to worry many countries beyond the United States and Britain. As countries like India and Japan and Australia and Indonesia think about a world in which Chinese values will shape the rules and routines of international life, they will find themselves discomfited. If China truly wants to be a world power, it will have to show that it has an outward orientation, open to the currents of modernity that are sweeping the world. How Beijing chooses to respond to Google will be a good test of its desire and ability to be a global leader.

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