Make no mistake, China’s censorship of the internet is a crime against liberty on a mass scale. Still, American firms can’t just steer clear of the world’s biggest market. What to do?

Make no mistake, China’s censorship of the internet is a crime against liberty on a mass scale. Still, American firms can’t just steer clear of the world’s biggest market. What to do?

By Peter Scheer

A milestone of sorts was passed in the first quarter of this year when China blew past the United States to become the biggest internet market in the world. At 225 million users, and still growing at double-digit rates, China’s internet is a business opportunity so grand and irresistible that it can blind normally circumspect people to the moral compromises that cooperation with Chinese government authorities inevitably entails.

I experienced this first-hand when, about a year ago, I made inquiries at the China offices of a number of American law firms to ask for help in comparing internet search results for searches performed inside China–within the “Great Firewall” of government censorship, as it is called–with the same searches performed from locations outside China (and therefore outside the firewall). The law firms demurred, explaining, with commendable candor at least, that they could not risk being observed submitting to Google and Yahoo search terms like “Tiananmen Square” or “Falun Gong”.

Mind you, these were American-trained litigators, the kind of lawyers who barely flinch in the face of a grand jury subpoena, and who spend their careers pushing back against the demands of government authorities. While usually immune to intimidation, they nonetheless feared the repercussions to themselves, their firms, and their clients from the mere act of typing a few search terms into an internet-connected computer. So seductive are the business opportunities in China that the risk of losing them transforms even hardened litigators into wimps.

In conversations with internet entrepreneurs and investors active in China, one often hears arguments that are more rationalization than logic. An internet CEO recently told me that freedom of speech is a “relative” value that, despite its appeal in western democracies, is not appropriate to China. Popular variations on this theme are that freedom of speech is an unaffordable luxury in a country that must be single-minded in its pursuit of economic development; that the people of China are more interested in consumer goods than personal and political freedom; and that westerners’ pressure on China to be more tolerant of dissent is a form of cultural imperialism.

Let’s be clear: Freedom of speech, freedom of political choice, and the rule of law are not relative values; they are absolutes. China’s regime of internet censorship is, without question, a crime against individual liberty on a truly mass scale. That it coexists with a fast-modernizing economy offering its people considerable choice in the economic sphere only makes the curtailment of personal freedom more offensive because less excusable. China does not need to suppress speech to achieve its economic goals. China’s leaders are more cynical than that. They maintain censorship solely to preempt challenges to their monopoly on political power.

This can be seen in the government’s censorship policies. Websites based inside China are subject to content restrictions that are, by design, so uncertain and unpredictable that they force internet companies to censor themselves. Standards that are unknown and unknowable, backed by the threat of license-revocation for companies and jail for individuals, create a pervasive fear that is far more effective than direct regulation at muting opposition to the government and its policies.

Websites based outside China, meanwhile, are subject to blocking by the Great Firewall based not on their content, but on their capacity to create, inside China, large, voluntary online communities that are independent of the government. These include nearly all blogging services, wikipedia and wiki platforms generally (wikileaks included), social networking websites and peer-to-peer technologies of all kinds, including photo-sharing and video-sharing businesses. In other words, the full panoply of internet 2.0 technologies.

Websites commanding vast audiences for user-generated content are seen by authorities as a grave threat. The Chinese government’s worst nightmare, after all, is a lone and anonymous Tibetan uploading to YouTube grainy cellphone videos of rioting police.

What should American internet companies do? To point out that doing business in China is morally compromising is not to say that companies must forswear the world’s biggest market–hardly a realistic option, in any event, for premier internet firms like Google, Yahoo, MSN, and Amazon. And while these companies might prefer to compete in China remotely–basing their servers outside the Great Firewall–government policies force them to set up shop inside China.

Those policies manipulate the firewall to degrade the performance of websites based outside China. Because all data from foreign websites pass through bottlenecks connecting China’s internet with the outside world, and because sensors at those bottlenecks further degrade transmissions across the firewall, non-Chinese websites are experienced from inside China as performing v-e-r-y

This performance deficit is so substantial–and puts non-Chinese websites at such a huge disadvantage relative to their competitors inside China–that foreign websites must establish a presence inside the firewall. Indeed, Google, despite misgivings, established within China in 2007 mainly for this reason, while Yahoo and Amazon crossed the firewall by investing in their Chinese domestic rivals.

American internet companies doing business in China should, for starters, acknowledge the extent of their self-censorship, not hide it or rationalize it or pretend that it is something other than the intensely unpleasant compromise that it is. Spare us the tortured and hypocritical justifications. It helps for companies to admit their complicity; to clarify that all is not as it should be or appears to be; to openly assert their disagreement with Chinese government policies (if they do, indeed, disagree); and to disclose specifics about how their content has been altered to avoid displeasing authorities.

U.S. firms also should do everything they reasonably can to protect their Chinese customers from the surveillance–and worse–of Chinese government authorities. If customer data and identifying information can be stored outside the firewall, beyond the reach of Chinese regulators and courts, they should be, even though that may involve greater costs. While this step does not assure protection of anonymous users (since control of a company’s license to operate in China gives the government considerable de facto leverage, quite apart from territorial limits on subpoenas and other legal processes), it is still meaningful.

If off-shoring of confidential user information is not feasible, companies must take steps to warn their customers about the risks of using their service. And finally, where warnings are not possible or go unheeded, companies should force customers to give their real names when using their websites–which will, in turn, force users to think carefully about what they say or do online. Ironically, the barring of anonymity is the surest means of getting users to appreciate the risks of saying what the government doesn’t want to hear.

Doing business on China’s internet is a messy, though potentially very lucrative, activity. Some companies may be so put off by the messiness that they stay away. For most, however, that is not a viable option. They must learn to be both honest with themselves and honest with their customers.
Peter Scheer, a lawyer and journalist, is CFAC’s executive director. CFAC is involved in a legal initiative to use the World Trade Organization to force China to suspend its censorship of the internet on grounds it violates international treaties on free trade. This commentary was also published in the International Herald Tribune and the Huffington Post.