China and Google: searching for trouble - part II

First, Washington’s soaring debts and increasing reliance on loans and investments from China, plus its need for Beijing’s help when it comes to preventing nuclear proliferation in Iran and North Korea, ties its hands in providing sustained and high-profile support for one of its great companies, as it surely would have in the past.

It is also a good bet that many governments who are beholden to Beijing will hold their tongues, and that a number of them - such as Russia, Saudi Arabia, Iran, Venezuela and Vietnam, plus many dozens of authoritarian governments throughout the former Soviet Union and Africa that fear the power of the Internet to be a subversive force - are rooting for Beijing. If the Google-China dispute was put to a vote in the UN, I’d bet the search-engine company would decisively lose.

Nor can Google expect very much support from other Western companies, almost none of which would risk their prospects in China’s rapidly growing market by offending Beijing.

Finally, compared to the 1980s and 90s, the lustre and clout of Western multinationals have been vastly reduced, their reputations soiled by the Enrons and AIGs. Beyond that, emerging markets are producing their own corporate champions which are providing ferocious competition to their developed nation counterparts, and in many cases being savvier about serving their own populations.

Hopefully, Google and China will find a way to settle amicably. For the foreseeable future, however, not only does Beijing hold all the cards, but could actually reinforce its authority and enhance its standing among many countries of the world by humbling Google and warning all other multinationals against challenging its political power.

Long term, which vision of the world will prevail? I’d say we’ll end up with less openness and globalisation. Reason: in addition to China’s having the political winds in its sails, other issues such as concerns over privacy and the need to combat terrorist threats against critical cyber networks will slow down the expansion of an open, unregulated Internet. Nevertheless, we will see more freedom than China is currently willing to allow, because China’s domestic Internet system is expanding so quickly and becoming so vibrant. Ultimately, its tens of millions of tech-savvy inquisitive minds will have the ability and the compulsion to scale any fire walls Chinese authorities erect. Many already do.