Argument

Google Confronts the Great Firewall

In the second clash between the Internet search giant and the Chinese government, will freedom of speech win?

For centuries, the Yangtze River -- the longest in Asia -- has played an important role in China's history, culture, and economy. The Yangtze is as quintessentially Chinese as the Nile is Egyptian or the Rhine is German. Many businesses use its name. But if you log on to the Internet anywhere in China, type the Chinese characters meaning "Yangtze River" into Google's Hong Kong-based search engine, and click "search," the browser screen will go blank with an error message: "This webpage is not available." (Here is a screenshot taken this morning by an Internet user in Beijing.)

It's actually not an error. This ridiculous level of censorship is the work of China's national network-level censorship system, commonly known as the "Great Firewall." It has been configured to block all Google searches containing words that could potentially be used in politically sensitive contexts. Coincidentally, the Chinese word for "river" is the same character used in the surname of former President Jiang Zemin. Jiang's name has been targeted by Chinese censors for much of the past decade for various reasons -- most recently due to rumors about his health and potential role in political succession struggles. The Yangtze River itself, as well as organizations like Yangtze River Securities and Yangtze River University, are all collateral damage.

Google's relationship with China's censors has always been rocky. It is likely to hit a new rough patch after the company rolled out a new feature on Thursday that warns Chinese users when they type words that are known to set off their government's censorship system. Now, when a user in China types the Chinese characters for "Yangtze River" into the search bar, a pop-up message warns: "We've observed that searching for [the character for river] in mainland China may temporarily break your connection to Google. This interruption is outside of Google's control."

For the first time, Google is making it crystal clear to Chinese Internet users that their frequent connection problems while using its search engine are caused by the Chinese government, not by its own systems. According to Alan Eustace, Google's senior vice president for knowledge, the purpose of this feature is to "improve the search experience in mainland China." Users are given the option to "refine their searches without the problem keywords" in order to "avoid connection problems." What Google executives won't discuss -- at least publicly -- is the obvious fact that they are exposing the Chinese government's censorship tactics in an unprecedented way.

When Google entered China in 2006 with a censored search engine, the company's justification for complying with Beijing's censorship demands was, ironically, to improve "user experience." Until Google.cn was established inside China, Chinese searchers faced annoying network blockages every time they clicked on politically sensitive links in their search results. In contrast, companies operating inside China -- along with all Internet companies with license to operate inside China -- are largely exempted from Great Firewall censorship in exchange for carrying out their own internal censorship: removing results for websites and search terms on instructions from the authorities. Once Google agreed to self-censor, Chinese users were able to use the service without interference, though a note at the bottom of each page informed users that censorship was taking place in compliance with government requirements.

Then, in the wake of sophisticated cyberattacks originating from China in 2010, Google decided to redirect its Chinese search engine to Hong Kong, where it no longer modifies its search results according to instructions from government authorities, explains Dave Lyons, a Beijing-based information science researcher. "It's outside of the mechanisms of information control, unlike other search engines which have local offices [in mainland China] and are required to comply with Chinese regulation."

Although the Chinese government consistently blocks most other Google services, including YouTube, Blogger, Google Docs, and Google Plus (click here to see which services are fully or partially blocked in China), it chose not to block the Google search completely, most likely because it had grown too popular with businesspeople, educators, and commercial elites. Instead, the censors have made it more difficult to use, causing Google's market share in China to drop dramatically in the past two years. "There is still a core of [Google] users here," one Beijing-based advertising executive told me on condition that his name not be used due to sensitivities with government and client relationships, "but I believe it is largely limited to an already highly internationalized and self-selecting crowd."

The greatest beneficiary of this situation has been China's home-grown search leader, Baidu, which carries out an extensive internal censorship operation in order to avoid trouble with the authorities. Searches from Beijing for "Yangtze River" conducted from Beijing on Baidu do not trigger a connection breakdown. (See a screenshot here.) The same searches from Beijing on Microsoft's Bing and Yahoo China are similarly unmolested because both companies carry out self-censorship from within China. In other words, you can get results for, say, "Jiang Zemin," but only the ones the Chinese government wants you to see.

Google's new exposé of the Great Firewall is unlikely to do much to woo back users who have grown frustrated by the connection resets. "I don't expect it will increase Google market share," says Lyons, "because it still puts the burden on users to modify their search terms, while those engines with local operations here in China will provide a more convenient user experience." Furthermore, those who are technically savvy and truly determined to use uncensored Google search can always use widely available circumvention tools to get around the Great Firewall.

Certainly, Google's latest move in China is not in its short- or even medium-term commercial interest, any more than the 2010 decision to move its search engine operations out of China was good for market share. It makes much more sense, however, in the context of the company's broader global strategy. Over the past two years, Google has taken a wide range of very public steps to align its global brand image with the cause of free expression. It has been vocal in speaking out against government censorship of the Internet all over the world, most recently in Thailand, where it criticized the country's harsh lèse majesté laws. It is fighting government censorship demands in India. It is a founding member of the Global Network Initiative, through which Internet companies work to uphold human rights principles. It issues a Transparency Report documenting censorship and user information demands from governments around the world (including the United States). It recently convened a major conference called Internet @ Liberty, to which activists were flown in from around the world to "explore the most pressing dilemmas and exciting opportunities around free expression in the digital age."

Just this week, Vint Cerf, Google's "chief evangelist" and one of the creators of the Internet, testified in Congress about proposals by China, India, Russia, and other states to put the web more firmly under the control of governments through auspices of the United Nations. The point is not that Google has no serious problems -- it certainly does, particularly on privacy and data collection issues. The point is that when viewed in the context of Google's global activities and statements, its decision to expose the Great Firewall looks very consistent with its image as an opponent of censorship and supporter of free speech.

But will China care? Writing on Twitter after news of Google's Firewall Exposé began to circulate after midnight Friday Beijing time, Chinese blogger Michael Anti commented in Chinese: "this will cause another headache for the Chinese government." It is unclear how Beijing will choose to react, or whether the Hong Kong-based search service will now be blocked outright on the mainland. Close observers of China's censorship strategies think this is a possibility, but only if the number of Chinese Google search users has dwindled to the point that the country's business elites would not complain. Otherwise, "blocking it completely could cause a lot of complaints and would make the censorship even more obvious," says Martin Johnson, the Beijing-based co-creator of Greatfire.org, a website that monitors Internet censorship from within China.

Johnson, who uses a pseudonym for fear of reprisals from the Chinese government, believes Beijing's current strategy is to block new Google services as soon as they become available, well before they develop any meaningful Chinese following. For example, the only reason why GMail remains unblocked in China (although it is sometimes disrupted) is because too many business and government elites have come to depend on it to communicate with friends, family, and colleagues around the world. "They don't want to repeat the GMail mistake -- waiting too long to block it, giving the service so many users that they don't dare block it anymore," he says.

But even if the government successfully blocked search, hundreds of millions of Chinese would remain dependent on another Google product: the Android mobile operating system. While Google no longer has a search engine operation inside China, it has maintained a large presence in Beijing and Shanghai focused on research and development, advertising sales, and mobile platform development. Chinese mobile companies have become so dependent on Android that in approving Google's acquisition of Motorola, which has a large manufacturing and sales presence in China, the Chinese government stipulated that Google must keep the operating system free and open-source for the next five years.

Like it or not, Google and the Chinese government are stuck in a tense, long-term relationship, and can look forward to more high-stakes shadow-boxing in the netherworld of the world's most elaborate system of censorship.

Feng Li/Getty Images

Argument

Grexit? Spexit? Let's Call the Whole Thing Off

Everyone wants southern Europe's troubled economies to go their own way, except for the people who live there.

One thing we've learned as the euro crisis has unfolded is that the enthusiasm of experts in London and New York for offering advice to the struggling countries on Europe's periphery is matched only by their passion for awkward neologisms. The world was just getting used to "Grexit" (Get it? A Greek exit from the euro!) when "Spexit" began to rear its ugly head in the financial press.

Naturally, the events of recent days have brought Spain back to the forefront of the debt crisis, generating insecurity about the reliability of the official fiscal deficit numbers, the validity of central bank statistics, and new numbers showing capital flight reaching alarming levels. Only this week, Spain announced that the central bank governor, Miguel Angel Fernandez Ordoñez, will be leaving early as part of a government effort to restore its credibility. Some are now anticipating that Spain's exit from the eurozone will come before Greece's departure.

I would hope that those clamoring for these countries to go their own way are at least better intentioned than they are informed, since normally they exhibit a singular lack of understanding about how political systems in southern and eastern Europe actually work.

It is now essentially conventional wisdom in the British and American press that Greece needs to return to the drachma. British journalists are even racing to hunt down the London printing works that have supposedly been given the contract to print New Drachmas, the putative local replacement for the euro. The only snag is, according to all opinion polls, the Greeks themselves are not happy with the euro but have no interest in dropping it. (Perhaps the perfect Solomonic solution here would be to have the New Drachma introduced as a non-convertible currency for use only within Fleet Street bars and the boundaries of the City of London.)

The Greeks, naturally, are tired of austerity, and of a stupid EU/IMF bailout plan that has only served to totally collapse their economy, explode their debt, and destroy what semblance of external reputation Greek companies had. The Greeks are tired of austerity in the way many in the United States have tired of fiscal stimulus in the run-up to the next presidential election. But no one would suggest that this weariness is an indication that Americans want to drop the dollar.

As an economist, I have always argued that the common currency was a mistake. I am a "euro" skeptic, but not a "Euroskeptic," and I think it important that people outside Europe understand that this distinction exists. There is no doubt that the euro, like Dr. Stangelove's doomsday machine, is an infernal device destined to blow up one day, but also so designed that any attempt to dismantle it simply detonates the bomb. This is why, tired as they may be, those who live on Europe's southern fringe have little appetite for leaving or taking part in yet another experimental new currency order. Better put, they have little appetite for leaving in a disorderly fashion. And disorderly the leaving would have to be, since if core Europe has little appetite for assuming the cost of keeping the eurozone together, it will surely have even less for paying the much larger bill associated with exit and default.

The media's increasing scrutiny of Spain is similarly misguided. Despite the many voices now recommending a "Spexit," few are really knowledgeable about daily life here in Spain, and even fewer are actually to be found inside the country.

The story of how Spain got to this point is well-known. There was a huge property bubble (could we say the mother of all of them?), a decade of above-EU-average inflation, a massive loss of competitiveness, a huge current account deficit, and an unprecedented stock of external debt. All of this now needs to be unwound, but here's the rub: It is very easy to structurally distort an economy within the framework of a currency union, but very difficult to correct the distortions once generated. This is why so many rightly say that in Spain it is all pain as far ahead as the eye can see. It is not that the Spanish people like this, but just that they don't see any clear and better alternative. And indeed, while only 37 percent of Spaniards believe having the euro is a good thing, according to a recent Pew poll, 60 percent favor keeping it.

The departure of Ordoñez, the central banker, may seem more dramatic from the outside than it does from within. Certainly Mafo, as he is called, bears a heavy responsibility for Spain's continual failure to get a grip on the rot in its financial system, and for the disastrous decision to allow the insolvent Bankia conglomerate to go to IPO last year, losing shareholders more than $2 billion and badly damaging the credibility of the country's banking sector. But his is only one name on what should be a very long list of putative villains, including members of the present government, the previous one, the EU Commission, the European Central Bank (ECB), and last but not least the IMF, where ex-Bank of Spain deputy director Jose Viñals has was busying himself for months writing reports suggesting the condition of Spain's banks was not all that bad.

The real question is what happens next. Spain, like the euro itself, is both too big to rescue and too big to fail. Spain's banks need capital from the government, but the government itself can't finance them. Foreign investors are leaving in droves, but no matter how many liquidity offers they get from the ECB, the country's banks simply can't buy all the debt. So the country needs European (read: German) money. The problem is that if this takes the form of an injection of bank equity, then Germany could end up all but owning Spain's banks, which would expose German taxpayers to considerable potential losses should the situation deteriorate further. At this point Berlin could firmly put its foot down, and we will have another impasse.

At the end of June, Europe will face what many consider to be a perfect storm: results of the Greek elections and details of the new, independent, Spanish bank valuations, which are sure to find that significantly more money will be needed for recapitalization. This will undoubtedly be a make-or-break moment in the ongoing debt crisis, and, if things were to spiral hopelessly out of control, a Spexit could become a real possibility. My advice to all those external well-wishers would be: Be careful what you ask for, since you might not like what you finally get.

PHILIPPE HUGUEN/AFP/GettyImages