What is the deal with Google and China?

Two days ago, Google posted on its blog that it is taking a “new approach to China.”  Google lawyer David Drummond announced that Google would no longer censor search results (for “tiananmen square massacre,”  “falun gong,” and the like) on google.cn and was also considering a complete withdrawal from the country, shutting down its offices in China as well as its google.cn domain.  This “carefully worded statement” comes as a surprise to many since Google, like many other international corporations, seemed to be enthusiastically expanding its business in China.

So what, exactly, prompted this change of heart?  Drummond blames a “highly sophisticated and targeted attack on our corporate infrastructure originating from China” that also targeted “at least twenty other large companies from a wide range of businesses.”  A main target of these attacks, allegedly, was human rights advocates.  Not only was accessing these activists’ Gmail accounts a “primary goal” of the attack, but the activists also seem to be the victim of third-party attacks like phishing.

Drummond carefully avoids implicating any particular party as responsible for the attack, but the nature of the attack (targeting human rights activists) and the nature of the response suggests that the Chinese government or an entity closely affiliated with the Chinese government is behind the attack.  This is not certain, however.

After the announcement, speculation ran wild on what the real reasons were for the unexpected Google announcement.  The explanations fall into four categories: business, ideological, political and governmental.

Business: Sarah Lacy makes the case that Google’s move is “More about Business than Thwarting Evil.”  She claims that since Google’s business is not doing well in China anyways, and Google was looking to exit the scene.  Her conclusion is defensible (business is the primary concern) but her reasoning is flawed.  It seems as though, purely on a revenue basis, Google is doing quite well in China, according to a Google spokesperson (one should not trust corporate spokesmen to be objective, but I think this view reflects reality).  The cost of staying in China, however, might be too great when one factors in bad PR, constant defense from network attacks, compliance with Chinese government regulations, etc.  In other words, all things considered, Google loses more than it gains in China and it makes sense for it to leave.  A variant of this argument holds that Google was looking for an excuse to leave the country and doing it with such bravado is a convenient way to distract shareholders from the fact that it is exiting a lucrative market.

Ideological: Another perspective is that Google is sick and tired of China’s human rights abuses and censorship and wanted to take an ethical stand on the issue.  This view strikes me as highly inaccurate given how Google made a conscious decision to enter China knowing the terms of its operation there and didn’t feel like taking a similar stand for four years.  As Paul Carr says,

But what [Google's decision is] absolutely not is a “moral position”, nor one that they should be particularly applauded for, any more than a man who has spend (sic) four years beating his wife should be applauded when he decides to stop. If anyone should be applauded it’s the man who didn’t beat his wife in the first place.

Furthermore, it seems naive to ascribe ethical motives to a corporation, an entity that is motivated purely by profit.

Political: This view holds that Google is trying to play hardball with the Chinese government, attempting to employ brinkmanship to extract some concessions.  Perhaps Google wants the hacking, spying, etc. to stop and it feels like this bold move is the best way to achieve it.  It’s unlikely that calling out the Chinese government in this way will make the Chinese government more willing to listen to Google’s suggestions.  Google is hardly indispensable in China; the lead search engine (by a wide margin) is Baidu.  Google does not hold an advantageous position from which it could aggressively negotiate to change or end long-standing Chinese policies.  So, given the slim chance that this strategy would succeed, this view also seems tenuous at best.

Governmental: Drummond states that Google was not the only company targeted in these attacks.  Indeed, it seems that more than 30 US companies including Adobe were also victims.  Given such large-scale disruption of US corporate activity, the US government might have felt the need to intervene.  Perhaps the US government needed at least one corporation to publicly announce their discontent with China in order to pressure the Chinese government for more favorable business conditions, and Google is playing that part.  Secretary of State Clinton has demanded an explanation from the Chinese government in the wake of these attacks.

Regardless of which (or which combination) of these views is most accurate, many questions remain.  Namely, who is responsible for these attacks?  What is the nature of these attacks, beyond the vague description that Google laid out in its blog post?  Why was this decision made now (attacks on network infrastructure happen constantly)?  Who at Google is behind this decision?  What will the reaction of both the US and Chinese government be?  And so on.  In any event, this is a developing story and the facts are far from clear.

But the plot thickens.  On the same day, Gmail announced on its blog that it would be switching to default HTTPS encryption for all users (instead of previously having it as an opt-in option).  This means that it will be impossible to effectively eavesdrop on Internet transmissions between a Gmail user and the Gmail servers.  No mention was given in either blog post that the Gmail move was related to the China decision, but the timing is highly coincidental.  The fact that Gmail was described as a target of the attack seems to indicate that these announcements are related.

This is already a tangled web of a story, and will get even more interesting as further revelations emerge.