Monday, January 18, 2010 0 comments ++[ CLICK TO COMMENT ]++

Opinion: Really tough for media companies to work under the Chinese regime

Almost everyone has heard of the controversy over Google's threats to pull out of China. Some always wondered what type of company Google was, and this situation should finally prove that Google is basically a media company.

I think the currently unfolding situation goes to show how difficult it is for media companies to work within a totalitarian regime. Other industries can sort of get away with questionable practices but media companies will always be, either under the watch of the state, or culpable in human rights violations of the state.

Anyone who knows about politics knows that brainwashing the population is one of the most powerful tools available to governments. In fact, when a crisis unfolds, the first task of many tyrants is to take over the media or to initiate propaganda. I once recall Noam Chomsky pointing out that propaganda was widely used until citizens started resisting it. There was even a book called Propaganda or something like it (don't remember the exact title) that was widely read in political circles. Nowadays if the government mentions propaganda, most citizens would consider it negative, whereas most people considered it positive or just didn't care in the early part of the 20th century (I'm not sure what changed things but it wouldn't surprise me if the total dominance of Nazism probably turned propaganda from a widely used concept to a condemned one.)

It goes without saying that controlling the media is very important to the Chinese government. Almost all governments try to control the media but this is far more important under totalitarian regimes. This importance largely stems from the fact that many regimes maintain their position by hiding some horrible truth that had occurred in the past. Perhaps the largest genocide in human history may have occurred when settlers to America—early Americans, Canadians, Spanish—wiped out the native population. Perhaps as many as 100 million (no accurate measure exists AFAIK) of the native population were completely wiped out. Not everyone was explicitly killed (many died due to "Euro-Asian" diseases which the Europeans were immune to) but the number of lives lost were vary large. Right now, there probably isn't even 2 million native Americans left (it's a bit tricky to count because mixed people get lumped into a different category.) To give you an idea, there are probably more Chinese or South Asians in Canada than the natives. Similarly, there are probably more Chinese than native Americans in USA. America and Canada also carried out unsavoury acts during World War II, including the internment of Japanese Americans and Japanese Canadians. None of this is pretty.

The point of all this is not bash the early settlers of America and Canada; nor is to debate actions during World War II. Rather, it is to point out that, as negative as these events may be, the general population can read up on it. The goverments of Canada and America probably never would have wanted to reveal any of this but it happens because people's minds are free (for the most part.)

In totalitarian regimes like China, this is not the case. If someone wanted to know about Tiananmen Square Masscre (apparently locally known as The June Fourth Incident) in China, they can't. The government won't let them. But the worst atrocity is not that; rather it is Mao Zedong's horrible policies in the 1960's and 1970's. Depending on which incident you are looking at, upwards of 15 million were killed either deliberately or due to incompetence by the state. Presently, and for the last 30+ years, the Chinese government has kept a tight lid on horrible things that have happened in the past. In fact, many youth apparently know a lot about Japanese killings of innocent Chinese during World War II while not knowing anything about the millions that perished under state control a few decades closer to their birth.

So, you can imagine how media companies in China are operating. You either get in bed with the state or you don't exist (at least not as an independent news/information source—media related to sports, entertainment, arts, etc, have less problems.) This is especially problematic for foreign companies who have differing value systems and behave differently. Foreign companies, especially those located in liberal countries like USA, are also vulnerable to lawsuits, either from shareholders, citizens, or government agencies, if they are culpable in some human rights abuse.

Media companies really are dancing with the devil in China (this goes for many other dubious governments elsewhere, like most of the Middle East, most of South Asia, most of Africa, and some parts of Latin America.) You saw how bad things were when Yahoo! turned over sensitive information that led to the persecution of a dissident a few years ago.

Google, finally, reached a serious breaking point. The pulic reason given by Google lawyers and senior management is that some hackers stole information from the company. This may be true but this happens to any company in China. What is different here is that the stolen information may lead to jailings, torture, or executions of dissidents. My wild guess—this is purely a guess—is that the Chinese government asked information from Google and they probably dithered (probably said  the information was stored on servers outside China and hence not under Chinese authority), and then the Chinese agents probably infiltrated the company and just stole the information. This sounds like a wild conspiracy theory until you read press stories like this one where leaks from Google suggest that employees of Google in China played a role (the only thing with this story is to figure out who is leaking the Google investigation. Almost all leaks, except some whistleblower cases, are strategically placed by people who want to influence the public.)

The dilemma for media companies like Google is to figure out if they can operate in China without being party to state human rights abuse. If they acquiese to China's demands, I suspect these companies are going to have blood on their hands in 30 years if something terrible happens. I hope nothing bad happens in China but you just never know. Although not quite to the same damage, do keep in mind that IBM played an indirect role in Nazi Germany when it sold computers to more efficiently kill Jews, Gypsies, Communists, and others. I am not equating anything from the Nazi period to China. All I'm saying is that, once you go down the path in helping the state abuse its citizens, you may end up in a place you never quite wanted to.

I suspect the current controversy is going to splinter the Internet media space, at least with respect to China. You are going to end up with Internet services that follow everything the Chinese government says; and then you are going to have companies that don't do business directly in China (or they will run operations that have nothing to do with media; for example, I can see Google offering Google Maps in China but not Google News, Gmail, and the like.) You are sort of seeing this unfold before your eyes. The Financial Times, picked up by The Globe & Mail, is reporting that Alibaba, which is 40% owned by Yahoo!, is criticizing Yahoo! for backing Google's stance. Alibaba and Yahoo! apparently don't get along with each other but, nevertheless, this looks like it is widening the rift.

Some shareholders don't care about freedoms, human rights, or anything like that. So some shareholders of Google will be critical. But even from a business point of view, the loss may not be as bad. Writing for MarketWatch, Craig Stephens points out how many media companies have already failed in China and probably have little hope of success.

Overall, this is a mess for everyone but there is no right answer.

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