The confrontation between Google and China is turning into the biggest news event of the year, and possibly for many years to come. According to some pretty smart analysts, it is the point on which the geopolitical relationship between the US and China could turn, and turn nasty, with severe consequences for the rest of the world, and especially the Middle East It is bizarre to think that a US company founded just over a decade ago by two computer nerds (corporate slogan: "don't be evil") should find itself in epic confrontation with the world's oldest civilisation, revamped as a totalitarian dictatorship in 1949 (current slogan: "Socialism with Chinese characteristics") by the Communist party which still rules today.
But maybe we are just seeing the tip of an iceberg of fundamental ideological disagreement which has been many years in the making. The argument goes like this: Since Deng Xiaoping, the reformist communist who declared that "socialism does not mean shared poverty", China has been happily wallowing in capitalism and consumerism. Making up for the lost opportunities of the revolution, the Great Leap Forward and the Cultural Revolution, China has embraced capitalism with a fervour that would shock even the most free-market US neo-con.
The Americans loved this, of course. It was further proof, they said, along with the collapse of the Soviet Union, that their belief system was the best. True, communists were still in power in China, but they were capitalists at heart. Go out and meet them, do business with them, teach them "our way", and they would slowly but surely be won over more to the liberal democratic ideals Americans believe must accompany free-market capitalism.
The US, under successive presidents, stuck to this premise as the basis of their foreign policy towards China since 1989. Sometimes it seemed to pay off: GM opened a huge plant near Shanghai and started producing Chinese versions of the famous American motoring brands. Starbucks opened a shop within the Forbidden City in Beijing. It looked as though the Chinese were turning American. But when it came to media and freedom of information, the Chinese never let go of their old ways. Newspapers and magazines were routinely censored for years under communism, and that has continued.
One great hope for free information was a business magazine called Caijing, written by some of the smartest and best-connected financial journalists in the country and aimed at an elite readership which valued transparency and accuracy, rather than a party line. Its editor resigned last year, complaining of interference by the communist authorities. In the 1990s, Rupert Murdoch rode in with Star TV, based in Hong Kong but intended to reach the hundreds of millions of new consumers on the Chinese mainland.
The Chinese authorities blocked it, and Mr Murdoch lost a fortune. If a determined businessman like Mr Murdoch, never reluctant to bend the content to suit the audience, could not make a go of China, what hope for the ingénus at Google? There are other examples, but they only reinforce the message: the Chinese authorities are not willing to allow a free media and the freedom of information and expression that goes with it, regardless of how wealthy or consumerist the population becomes. Liberal democratic freedoms will not inevitably follow free markets.
So American policymakers have some tough choices to make. Do they carry on with their "civilising mission" in China, in the hope the regime will change its mind? Or do they adopt a tougher stance, possibly including trade embargoes and greater protectionist measures at home? It all comes at a bad time for western capitalism. Its image has been badly tarnished by the financial crisis. Those "international best practices" endorsed and embraced by the rest of the world, suddenly look not so state-of-the-art after all.
For the US, that image problem is especially acute. Americans blame China for keeping its currency too high and so adding to the cost of imported goods to which they are addicted; they are also conscious that China holds America's financial future in its hands. If the Chinese were to dump the trillions of dollars or US Treasury bonds they hold, it would cause chaos in the US financial system and around the world.
So there is a lot more to play for in the Google situation than mere media freedoms. The Middle East, similarly bruised and confused by the fallout from the financial crisis, also has a choice to make. Does it continue to follow the US/European line? Or does it look to the east for its future business models? A speaker at a business conference in Dubai last week put it like this: "The Gulf has to decide where the east begins. Is it in Shanghai, Mumbai or Dubai?"