Google in China

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Google in China

  1. 1. InChina<br />Globalization & U.S. International Economic Policy <br />LaurenKlein | Cristina Gomes<br />
  2. 2. Chinese Internet Market<br /><ul><li>From 1997 to 2006 Internet use grewfromhalf a million to 123 million: 60% growtheachyear.
  3. 3. Since 2008, theChinese internet markethasbeenbiggerthanthe U.S. one, </li></ul>whichhas 227 millionwith 74 % ofpenetration.<br /><ul><li>As of 2010 there are aproximately 400 millionusersoutof 1.3 billionpopulation.
  4. 4. Itwill continue to becomethebiggest internet marketintheWorld.
  5. 5. Total advertisementintheChinese internet amount to $2.5 billiondollars.</li></li></ul><li>Chineseusersspend 34 hoursperweek online<br />However, Internet hasbecome a tool for entertainment, ratherthan a source for politicalinformation.<br />Internet regulationworksthrough a combinationof active filteringandfullblockingof Web sites andservices – theChinese“Great Firewall.”<br />82% oftheChinesecitizenssupportsome typeofcensorshiprelated to porn, violenceorotherharmfulinformation to society.<br />Chinese Internet Market<br />
  6. 6. Google came to China in 2005, afteritdeveloped a Chineselanguageinterface. <br />In 2006 Google boughtthedomainGoogle.cnandwasgrantedan ICPlicensethatlegitimizeditspresence.<br />From a PR perspective Google washitinthe western media.<br />In 2002, Baiduhadonly 2% ofthemarket share andnowhas 60%,Whathappened?<br />Baiduhas more expertiserelated to cultural interestinentertainmentandissupportedbythegovernment.<br />Thetotal sizeofthesearchmarketin China is $1 billiondollars. Itisexpected to grow 40% in 2010.<br />Google’s history in China <br />
  7. 7. InJanuary 2010, Google announcedthattheywouldpullitsbusinessoutof<br /> China. <br />Reasonsinclude:<br />- Cyberattacksonits servertargetedatgmailaccountsofhumanrightsactivistsand a Businessdecision.<br />TheChineseoperation for Google issmall, roughly 1% ofthe total globalrevenuesof $23.6 billion.<br />TheyreroutedGoogle.cnto Google.com.hkwhichcouldpotentiallybeblockedinthe<br />mainlandinthenearfuture.<br />Google’s history in China <br />
  8. 8. Google’s history in China <br />
  9. 9. Options for Google<br /><ul><li> Go through a WTO compliance procedure.
  10. 10. Work with a multi-stake technology association.
  11. 11. Increase collaboration with Human Rights groups.
  12. 12. Increase support to technological efforts to bypass firewalls and censorships.</li></li></ul><li>Go through a WTO compliance procedure<br />FourModesorwaysofservices:<br /> - Mode 1or “cross-border supply” - is defined as having all services supplied<br />from one country to another.<br /> - Mode 2 or “consumption abroad” - is defined as consumers purchasing <br />services in another country.<br /> - Mode 3 or “commercial presence” – is defined as a foreign company<br /> opening subsidiaries or branches to provide services in another country.<br /> - Mode 4 or “presence of natural persons” – is defined as individuals who are <br />travelling from their own country to supply services in another.<br />
  13. 13. MostfavoriteNationprinciple, whichmeansthatallcountriesinsidetheWTO haveequalrightsinrelation to eachothersmarkets.<br />Whatwouldbethebasis for a WTO complaint?<br />WTO precedent – online gamblingcontestedbyAntigua&Barbudaagainstthe U.S<br />A resolutionwaspublishedbythe UN onJune 30, 2000, thatdefinedweb-searchportals to beunder “data processingservices.”<br />China has no restrictions for “data processingservices” undermode 1 and3 whentheysignedin 2001.<br />Go through a WTO compliance procedure<br />
  14. 14. Go through a WTO compliance procedure<br /><ul><li>Revenuesthrough advertisements comingupwith the results of the search.
  15. 15. Censorshipofthe internet it is harmingrevenues for these companiesand</li></ul>therefore China isnotabiding to the WTO rules.<br /><ul><li>Chinesefirewall blocksentire sites instead of blocking words, which makesit</li></ul>harder to defend the firewall inrelationto moral and politicalcensorship.<br /><ul><li>Theeconomicrightsofthe site weretakenaway.
  16. 16. CensorshiprulesthunderGATS and GATT are relatedto theprotection of public</li></ul>morals, butthisisnothow China censors.<br />Filtering would be less trade restrictive!!<br />
  17. 17. Gothrougha WTO compliance procedure<br />Main argument for a WTO complaint:<br />Filing a complaint in the WTO will not be used to eliminate censorship <br />in China. It will be used to make censorship more commercially friendly in the <br />Internet environment, using active filtering instead of entirely blocking sites.<br />If Google and the U.S. administration don’t use WTO to address the underdeveloped and uncommitted countries to its rules, where else would they go?<br />
  18. 18. Global NetworkInitiative (GNI), basedin Cambridge andfoundedin 2008.<br />- GNI works with several Internet and media companies, such as Google, Microsoft, Yahoo!, academics and human rights organizations to create best standards in Internet and filtering policy across borders. <br />TheseassociationsgivemembersgoodPublicRelationsat a minimal cost.<br />Google couldhelpgroupslikethisgrowinorder to ensurethefreeflowofinformationandfreetrade<br />Work with multi-stake holder technology association<br />
  19. 19. Google shouldalsoconsiderworkingwithHumanRightsgroups<br />Examples: FreePress, Center for DemocracyandTechnologyandHumanRightsWatch.<br />Inorder for the U.S. to file a complaintinthe WTO, itwillbenecessarytoIncreasepoliticalsupport<br />Collaborationwithhumanrightsgroups<br />
  20. 20. Google shouldconsiderinvestingintechnologythatallowsitsusers to bypassthe Firewall.<br />The Global Internet FreedomConsortium,isoperatedbyvolunteersthatbuilt a software thatisable to constantlyswitchtheusers IP andworksfrom servers aroundtheworld.<br />Aproximately1 millionusers use thisin China.<br />As Google moves outoftheChinesemarket, mightbeoftheirinterest to supportsuchorganizations.<br />Support technological efforts to bypassfirewalls<br />
  21. 21. Conclusion<br /><ul><li>Therecomendationis to take a multi-prongedapproach, butthe WTO complaint
  22. 22. isnecessary to effectivelyInfluencetheChinese Internet market.
  23. 23. China is committed to “data processing services”under GATS.
  24. 24. Thisisnot a newissue for the WTO.
  25. 25. The questionis, does the U.S.want to fightfor thismarket–
  26. 26. Themainforeign policy of the United States is the spread of democracy</li></ul> “through the free frow ofinformation.”<br /><ul><li>Thechineseinternet market is huge and being a member of the WTO</li></ul>comes with a responsibility of free trade that China must commit to. <br />

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