Google may pull out of China

The company behind the world's top search engine may pull out of China because of censorship and cyber attacks on human rights activists.

People walk pass the Google China office in Beijing. Google vowed to defy Chinese internet censors and risk banishment from the lucrative market in outrage at "highly sophisticated" cyber attacks aimed at Chinese human rights activists.Show less

NoIndent:Google dealt a significant blow to China's credibility with international companies as the internet giant claimed it had uncovered a cyber espionage plot targeting dozens of foreign organisations active in the communist country. The alleged discovery, Google said, could lead to the online search giant's withdrawal from China, an act that could damage the country's standing in the corporate world. Google claims it detected a organised attack on its systems last month, the latest attempted breaches originating in China. The most recent attack focused on gaining information on human rights activists, based both in China and across the world, that use Google's services. "These attacks and the surveillance they have uncovered - combined with the attempts over the past year to further limit free speech on the web - have led us to conclude that we should review the feasibility of our business operations in China," the company said. "Over the next few weeks we will be discussing with the Chinese government the basis on which we could operate an unfiltered search engine within the law, if at all. We recognise that this may well mean having to shut down Google.cn, and potentially our offices in China." Google also claimed to have uncovered similar attacks on at least 20 other multinational companies. Google's allegations also prompted the US secretary of state Hillary Clinton to speak out. "We look to the Chinese government for an explanation," Mrs. Clinton said on a visit to Hawaii. "The ability to operate with confidence in cyberspace is critical in a modern society and economy." China watchers said the move is the strongest public rebuke yet by a Western corporation of the country's organised violations of human rights and intellectual property. It could prompt other internet companies, including Microsoft and Yahoo, to reconsider their own approaches to the market, which require co-operation with government censorship and surveillance agencies. "The scale of Chinese national resources going into the internet in the form of surveillance, firewalls and cyber attacks is beyond a joke," said Kerry Brown, a China specialist at Chatham House, a UK-based think tank. "This is a huge, state-supported onslaught into an area that should be primarily commercial." China watchers said the alleged attack is the latest example of the country struggling to adapt to its new position in the global economic order. "When you add this huge issue of the internet to recent developments in climate change negotiations, foreign exchange policy and deficits, all of this is creating a fairly negative environment," said Mr Brown. Google's public comments are unprecedented among the legion of multinational corporations that have flocked to China in the last decade. But its experience of state-backed efforts to infiltrate IT systems and steal valuable information is not unique. Most companies, from banks to law firms and consumer goods groups, have faced similar challenges in the theft of intellectual property. What sets Google apart, Mr Brown said, is that its foray into the market has not produced returns that justify such costs. "People like Google and Yahoo have not had their expectations met in China, and their competitors have wiped the board with them. That is part of it why you are seeing this," he said. "Plenty of other companies are making big returns, but I don't know if any internet company in China makes a penny." Chinese internet users reacted with support for Google's stance, but also concern that the move could result in foreign web companies abandoning the market, leaving only local operators that are more co-operative with authorities. "Censorship sometimes is too much," said a media industry worker who asked to be identified as Mr Ming. Andrew Wordsworth, a partner at the business intelligence firm DPW, said the threat of government-linked corporate espionage and intellectual property theft is factored into the costs of doing business in China. While counterfeiting trademarked goods or stealing corporate secrets is rampant, he said it is internet companies that face the most serious and organised threat. "At a state level, there doesn't seem to be a policy of 'let's copy dove soap,' but there does seem to be a policy followed by state organisations related to targeting these internet companies," he said. "This is a classic problem that foreign companies deal with: banks, law firms, technology companies. Any data that you move into China it is seen as property of the Chinese state, and there is a real risk of that data being stolen." [e-mail]