For many years, American corporations have literally salivated over the commercial prospects of the Chinese market: 1.3 billion people, or 25% of the total global population.
But for companies trying to cross the Pacific, 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 (such as the Dalai Lama, Falun Gong and the Tiananmen Square massacre of 1989). 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 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) took place on February 15, with Rep. Christopher H. Smith (R, NJ) condemning the four companies for a "sickening collaboration" with Beijing and for "decapitating
the voice of dissidents" in China. Even Amnesty International weighed in, taking a rare step in criticizing non-industrial corporate activities through its public
condemnation of Google's self-censorship policy.
But from a PR standpoint, just how bad is the 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 with a history of denouncing high-tech censorship) was able to see the silver lining
in this dark cyber-cloud.
"We're disappointed that these companies cooperate 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 Web sites 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."
The PR Perspective
Among U.S. 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 of 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."
Preventing a Replay
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 with 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."
Contacts: Danny O'Brien, [email protected]; Robbin Goodman, [email protected]; James Lee, [email protected]; Gene Grabowski, [email protected]; Jonathan Halloran-Koren,
646.546.5028.