Net loss

It is 2011, and even email is being curtailed. The good news: a revived post office, which is recruiting 100,000 new workers.

Such was the online satire last week, prompted by continuing speculation that Google will exit the China market. There’s a twist. The forecast was penned not by a frustrated Silicon Valley executive but by China’s most popular blogger, Han Han (see WiC28). Silicon Valley executives might be less surprised to hear that the material was soon pulled down from his website. Another victory for the Chinese government as it seeks to control the unruly net?

It wasn’t supposed to be like this?

Most of the internet pioneers believed that the information superhighway would become an irresistible force. Web users were expected to converge on similar standards of online access and disclosure.

Instead, an alternative view is emerging. Perhaps independent ecosystems of online information, dialogue and ecommerce might survive. The lead exhibit: the ‘walled garden’ of the Chinese internet, with content produced by Chinese companies for Chinese consumers, all under the watchful eye of the local authorities.

Sounds more like an intranet…

For all the talk of it transcending borders, the internet works through a network of servers and routers hosted on sovereign territories. That gives governments the chance to have at least some say in how their citizens behave online.

In China, as many WiC readers will already know, the principal method of technical control is the ‘Great Firewall’, a filter that prevents Chinese users from accessing a long list of websites, like Twitter, FaceBook and YouTube. Specific keywords or search terms for topics deemed undesirable can be blocked too. For example, the Financial Times reported on Tuesday that internet searches for a ‘Winston Wen’ have been blocked in recent days. Why? It posited that there was some sensitivity to news that Winston, the son of Premier Wen Jiabao, was raising $1 billion for his private equity group, New Horizon (searches for which were likewise disallowed). The business activities of the leadership’s children remain off-limits, it seems.

The firewall is not a fail-safe barrier. Bill Gates told ABC’s Good Morning America this week that it was pretty easy to get around. Determined locals can bypass most of the restrictions by signing up for proxy servers outside the firewall too.

Perhaps that’s why the authorities went for reinforcements last year, mandating a pre-installed filter called Green Dam for new computer sales. But the software didn’t work properly. Beijing underestimated opposition to the move, and had to back down in an embarrassingly public fashion.

In December it went on the attack again, with new rules announced on who could own domain registrations (the names that identify web site addresses). No individuals were permitted to register – with ownership was restricted to companies only. That makes sense from the government’s perspective. Companies are easier to hold responsible, and they are already liable in China for all that their customers read, post, transmit or search for online.

If the rules are broken, licences can be withdrawn. CBN Weekly claimed this week that more than 100,000 websites were affected by a ‘clean up campaign’ – ostensibly targeting pornography – that ran for much of last year.

Still, the major internet firms (many of whom show more than a passing resemblance to their American equivalents) generally observe the online rules. Each year the industry gathers for an “Internet Self-Discipline Awards” night, in which its executives are honoured for their contribution to “harmonious internet development”.

In return, they get a largely exclusive bite at an expanding local market. The result: the US web majors barely get a look in and the homegrown news portals, video-sharing sites, online messaging services and social networking sites dominate.

But China’s netizens want more?

There are obvious obstacles to a deeper connection between the Chinese internet and the wider world. One is linguistic: the massive majority of Chinese cannot understand foreign language content, just as most English-speakers are unable to read Mandarin.

Then there are the cultural disconnects. Many Chinese know little about Google. Fewer see its threat to shut up shop as the frontline in the battle for internet liberty.

Not that they can’t be riled by government heavy–handedness, as the furore over Green Dam indicates.

But other influences, like education or a limited awareness of the wider world, mean that many (if not most) would not see a Google withdrawal as a seminal moment. The Global Times thundered about American “information imperialism” in typical stroppy style this week. But it had a basic point in talking about two different world outlooks.

Additionally in the Google case, the majority of Chinese already prefer Baidu’s search service (which has twice Google’s market share).

Baidu argues, like many of its domestic peers, that it has a cultural affinity with its customers that foreign competitors lack. It has developed a user-friendly search format far more in keeping with Chinese language needs, for instance.

That cultural common ground should not be overlooked. In fact, there are many cases in which the internet seems to have stimulated patriotic fervour – rather than promote the path to a more common understanding (see WiC 9 and 29 for more on the fenqing brigade). For every comment in cautious support of Hillary Clinton’s plea for internet freedoms last weekend, there will be many more telling her to keep her nose out of China’s business.

But the “walled garden” won’t last forever?

Famously, the Chinese claim to take the long-term view. Web activists may now try to argue something similar – that it is only a matter of time before the walls are finally breached.

How might that process be accelerated? Some point to the coming explosion of internet access (especially a movement away from internet cafes towards personally-owned PCs and the spread of internet-enabled mobile devices). That will take the web beyond state control, they claim.

Others insist that China already has a vibrant internet culture. To some extent that is true, especially in online campaigns that expose corrupt local officials and bureaucratic negligence (see Talking Point, WiC18). By “speaking truth to power” are netizens already creating a sense of shared experience that cannot be reversed?

And what about the economy…

China will suffer if it misses out on the productivity gains made at the ‘internet frontier’, the critics warn. And why would it even want to isolate itself from the rest of the online world, especially when it has done the opposite in trade terms? Exports have taken off, and living standards have risen, through engagement with the global economy. Not by shutting it out.

But economic growth has been sought on China’s terms whenever possible and engagement with the internet will be viewed in a similar way. That may mean Baidu and the other favoured firms grow lazy behind their protective fence (a shame, as the country has enough overbearing monopolies already, complained the Economic Observer this week).

It might happen. But domestic firms seem to have learned quickly enough from their international peers, and they are already proving that they can adapt foreign business models to the local market.

More than that, they are likely to have at least a few creative ideas of their own. With close to a quarter of the world’s internet users (384 million is this month’s estimate from CNNIC, the government’s internet research agency), they also have a huge market to play with. China’s share is growing rapidly too; only 29% of the domestic population is currently online. So with firewalls and filters in place, an industry disposed to self-discipline and an internet audience still far from enraged by the state of online affairs, China’s standalone ‘intranet’ looks like surviving for the foreseeable future.

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