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For many years, American corporations have literally salivated over the commercial prospects of the Chinese market of 1.3 billion people, or 25% of the total global population. But for companies trying to cross the Pacific and enter this market, there has been an obstacle more powerful than the formidable Great Wall of China – namely, the Communist government, which welcomes foreign investment as long as it doesn’t bring along the social trappings of Western democracies.
In the past few months, several American high-tech companies received harsh media attention for their willingness to accommodate the Chinese government policies. Google, in launching its Google.cn search engine, provides a heavily censored Chinese-language service that automatically blocks out subjects and photographs banned by Beijing. Microsoft’s MSN, acting on Chinese government orders, shut down a blog by a Chinese dissident criticizing local politicians. And Yahoo! helped the Chinese authorities identify two journalists who used their e-mail system to uncensored spread news; the journalists were subsequently arrested and are now in Chinese prisons.
In reconfiguring the “anything goes” atmosphere of cyberspace to Communist-style censorship, these American companies have found themselves facing a PR backlash. A congressional inquiry regarding the aforementioned three companies plus Cisco Systems (which is accused of helping the Chinese government build its censorship-heavy Internet system) is planned. Even Amnesty International weighed in, taking an unprecedented step of condemning corporate activities by criticizing Google’s self-censorship.
But from a PR standpoint, just how bad is the PR situation for the high-tech companies? It would seem that things are not as dismal as one might anticipate.
For starters, the Electronic Frontier Foundation (a nonprofit digital rights group) was able to see the silver lining in this dark cyber-cloud.
“We're disappointed that these companies co-operate to the extent that they do with the Chinese authorities,” comments Danny O'Brien, EFF’s activism coordinator. “But we note that each of them has found some useful approaches that might be turned into a general code of practice. Google doesn't offer Google Mail or their blogging service in China, saving it from the kind of devastating complicity that led to Yahoo! handing over evidence that imprisoned two dissidents Shi Tao and Li Zhi. MSN has a clear policy (now) of only taking down websites when served with a legal order to do so, and publicly states why the site was taken down, rather than merely deleting it. And all could benefit from adopting a data retention policy that removed personally identifiable data from servers in jurisdictions where they might be used to compromise human rights. It would be better if none of these companies were negotiating away their users rights in China at all, but if they are, I think it would be valuable for them to at least work together to form a code of practice.”
Among PR professionals, the view of the China situation also reflects the acknowledgement of the playing field’s Beijing-driven rules. “What Google and Yahoo! and Microsoft have done is to start to pry open Pandora’s Box – to start to even the global playing field of information access,” says Robbin Goodman, executive vice president of the New York agency Makovsky + Company. “Whether or not you agree with their acquiescence on censorship, it is clear they understand that to bring the Internet out into the open, in this moment of time, they have to make it palatable to the powers that be or risk being an also-ran. It has to start somewhere.”
James Lee, president of The Lee Strategy Group, Inc. in Los Angeles, points out the domestic anger at the U.S. companies is stained with political residue. “One of the criticisms that will mount will come from politicians looking to attack these firms, especially in states where tech is not a dominant industry and freedom has high currency -- red states -- during the upcoming election cycle,” he says. “All it will take to really light this powder keg is for the story of one young student who is hauled off to prison or even executed based on data provided by Google or another US firm. That will be the ignition for human rights groups to attack.”
Gene Grabowski, vice president with Levick Strategic Communications in Washington, D.C., also points out this controversy received a considerably higher degree of media attention than another recent controversy regarding the Chinese government’s failed attempt to play down the news of chemical spill that dumped 100 tons of a toxic benzene compound into China's Songhua River; the environmental damage created by the spill became an international concern when the chemicals flowed out of China into Russian waters.
“One of the reasons the high-tech story is news is because it has a special sensitivity for reporters and the news media,” says Grabowski. “The benzene spill that went into Russia did not have a special place in the hearts of reporters. Also, the Yahoo! and Google case – with its issues of free speech, human rights and high-tech – can be covered by thousands more journalists who don’t have to be in China to see it because it is a conceptual story. Unlike the benzene story, where you have to be there to see the extent of the damage.”
So is there a PR solution for the current high-tech issue, or at least an idea of how to prevent this from repeating in the future?
For Lee, the best strategy for the high-tech companies is to be in close communications will all sides of the equation. “ U.S. companies can inoculate themselves by pressing the Chinese government for more guarantees on what is going to be done with the data or even aligning themselves with human rights groups in a pre-emptive attempt to partner with them before something like this happens,” he explains.
Grabowski also points out this type of controversy is double-edged, cutting the Chinese where it hurts them the most: In their wallets. “We’ve already seen a drop-off in tourism to China due to bad publicity,” he says, noting tourist revenues is a major source of financial vitality for China’s economy.
Furthermore, Grabowski points out negative press regarding the business environment in China does not benefit Beijing within the global economy: “I think Chinese officials know that partnering with Yahoo! or Google benefits their ‘brand’ versus Yahoo! or Google benefiting from the China ‘brand.’”
Jonathan Halloran-Koren, executive director at Fashion Outsourcing Group, Inc. in South River, NJ, argues that one can cut the high-tech companies some slack by acknowledging the bottom line economics that drive their eagerness to be a part of today’s Chinese marketplace.
“With China having a population over 1.3 billion and an estimated 94 million Internet users there is no question as to why companies like Google, Yahoo! and Microsoft are following the government’s Internet protocols,” he says. “The growth potential is enormous and competition is sure to get fierce as it is here in America. Those who do not enter now will find themselves with a great deal of competition from local Chinese and foreign firms in the future.”
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