Table on contents
2.1. Domestic Policy
2.2. Foreign Policy
3. Business and Economy
3.1. Trade barriers
3.2. Knowledge- and service-based economy
When thinking about China and the Internet, the first thing that probably comes to one’s mind is censorship: It’s the Great Firewall of China that insulates the Chinese population from western influence via Google, Facebook or Wikipedia. But it is not only that. The restrictions do not only disconnect China from foreign webpages that may contain critical information. Censorship of the internet impacts the People’s Republic of China on many different levels.
First of all, it is a political topic, because of the internet’s influence on public opinion. But this also affects China’s international relations to other governments. Second, it is a business-related topic. So many industries count on the internet and censorship is a hurdle for their development. Instead of blocking this development, China will have to embrace the internet as a cornerstone for its future economy to be able to continue growing.
To support this statement, this paper will discuss the implications of online censorship on domestic and foreign policy and the affects on international trade and China’s future growth, respectively.
China’s politicians know about the political importance of the internet since 1993 when the Golden Shield was introduced. The Golden Shield is a project of the Chinese Ministry of Public Security for the purpose of monitoring and controlling the internet. It is also often called the Great Firewall of China, a term coined by the Wired Magazine already in 1997. Although this metaphor does not reflect all the features of the Golden Shield project, it shows how other countries perceive China’s policy: disconnected from the world and against influence from the outside, suppressive and intransparent.
Online censorship is therefore an issue that affects domestic and foreign policy.
2.1. Domestic Policy
China’s politicians are highly concerned about the internet’s ability to distribute information. Under the surveillance of the authorities, online discussions about democracy, the Tiananmen Square protests or Tibet are made difficult and sometimes even dangerous. The government invests a lot of money and effort to guide public opinion and secure its own power.
It seems that the government has many good reasons to shield the internet. The internet’s power was visible in Iran when news, photographs and videos were spread via Twitter, so that everybody could follow the latest incidents in Teheran. Thomas Friedman (2010) predicts chaos for the case that China would liberate the internet and Liu Xiaobo (2009) says that “The internet is God’s present to China”, because of its ability to share information, form public opinion and gather people. All this could lead to protests and even overthrow the government.
But the internet is politically not as powerful as one might think. Twitter did not cause protests in Iran. It was simply a tool that people could use to express their opinions or to come together. The public opinion did already exist before Twitter was established. The Chinese online community already knows how to circumvent the Golden Shield and they have tools like twitter to connect with each other. In some cases these tools were already in use to protest against pollution or some political issues – often successfully, but there are no signs for sudden change in the political system. The internet therefore will not lead to immediate revolution in China, but to a slow progress of political change and a more enlightened new generation (MacKinnon, 2007).
Another reason why the internet does not automatically lead to political revolutions is that governments usually are very good in taking advantage of it themselves. The internet does not only spread naked truth. It is a good platform for propaganda and governments have exploited that. Hired bloggers that write and comment in line with governments’ opinion are reality. Additionally, the internet is the perfect place to watch over public opinion. Governments can see exactly what is going on in the online community and respond accordingly.
By liberalizing the internet the Chinese government would hence probably not risk to be overthrown. It would rather accelerate the process of enlightening society, which leads to political progress in a way that benefits the country. It would even significantly improve China’s reputation by appeasing human rights activist groups that accuse the government of confining its people the freedom of expression.
But keeping the firewall operating enables policy-makers to gain better insights to the society and have more influence on public opinion. The internet is, in that sense, rather a strength for the government. However, this kind of policy also affects other countries, making the Great Firewall an international concern.
2.2. Foreign Policy
China’s formidable growth over the last centuries has disconcerted many countries over the world, because they are seeing a superpower with more than 1.3 billion people (almost 20% of the world’s population) regaining strength after two centuries. Considering the increase in the standard of living for so many people, the progress of the People’s Republic is definitely a good thing. Yet there is reason for concern.
The country is intransparent, and not always are political intentions clear. There are a lot of conflicts with dangerous potential, e.g. North Korea, currency wars or the territorial claims in the South China Sea. They all alert the world, and especially the United States, that the rise of China might not be a peaceful one, particularly when considering that the convictions and visions of the two superpowers (China and the US) seem too divert to get aligned.
In fact, one might be inclined to think about the Great Firewall of China as an Iron Curtain 2.0; and this has an impact on U.S. Foreign Policy (Tsui, 2008). The Global Online Freedom Act that tries to defeat jamming on the internet is just one example that shows how important online influence on the Chinese population is to the U.S. government. The hope is probably that online freedom will eventually lead to democracy in China, although this effect is up to debate. Similar to the Cold War, media is used to impact the opponent’s society, albeit in a more passive way.
The internet is also used as a platform for cyberwarfare. A recent case from 2009 is China’s attack on Google servers. Some cables, published by Wikileaks, reveal that the attacks were most certainly “part of a coordinated campaign of computer sabotage carried out by government operatives” (Lehren and Shane, 2010). The Chinese officials do, of course, deny being involved, but even if they are not, America is very suspicious. Additionally, although this form of espionage and spying in general are not uncommon, the number of incidents is increasing and it exacerbates tension between the two superpowers.
Such attacks plus the Cold War connotation and the intransparency of China are creating a new old fear of the yellow peril among the people in many countries around the world and the United States in particular. Some concerns might be justified, others wilful ignorance, but the “fear of the dragon” (The Economist, 2010) is especially unfavourable for the dragon itself. It provokes protectionism that harms China’s export-oriented economy. Opening up the internet could be a signal to appease paranoid societies, their businesses and governments. This would most likely be conducive for cooperation with other countries and improve business relations, which will be part of the next section.
3. Business and Economy
The relation between the internet and businesses is diverse. On the one hand, the internet is a great opportunity for companies. They can tap into people’s knowledge, benefit from collective intelligence and network effects. The internet is also a good platform to provide services and other forms of intangible business. On the other hand, the internet can be a threat. In its openness it can spread strategic information very rapidly, as WikiLeaks has shown several times now. It creates awareness and that affects businesses in all its operations.
Both - opportunities and threats - can be observed in China. First, it will be shown how the internet and its censorship impose trade barriers for international companies that want to operate in China. Second, the paper argues that China has to more fully embrace the internet to make a necessary transformation of its economy.