Saturday, January 23, 2010

China Doesn’t Get It

China’s aggressive statements all week, indirectly defending its collaboration with Internet criminal groups, show that the Chinese government really doesn’t understand the seriousness of its problem or the weakness of its position. It may help to remember the reason that companies like Google are in China in the first place. It is to help China get its work done. If China’s reaction to this is to try to steal information from these companies and their Chinese customers, a thought essentially no more advanced than stealing credit card numbers, it shows a country that takes work for granted. Yet if theft is a higher priority to the Chinese government than the massive work that needs to be done in that country, and if it doesn’t mind aligning itself with theft even when it impedes work, there is not much chance that the work will get done.

China faces economic challenges on a scale that no other country has to consider. It is dependent on energy imports to an extent that Japan, the United States, and India can barely even imagine. Its economy is heavily dependent on contract manufacturing, a sector that will hit its peak and begin to decline in just a few years. It faces the prospect of tariffs and boycotts on its exports in less than ten years because of its outsized contribution to global warming pollution. To address these and other challenges will require the full ingenuity of Chinese workers, and that is not what it will get if workers are always looking over their shoulders, defending themselves against attacks by their own government.

If you read the news headlines, this analysis might seem like an overreaction, but the news stories are not emphasizing the nature or scale of the Internet attack that the Chinese government and criminal groups collaborated on against Google and at least 30 other companies based outside of China (along with who knows how many that were operating within China). From what is known about the attacks, though, the number of people working on them must have been greater than the entire Internet staff of some countries. In the follow-up to this event, China finds itself distancing itself from the world in a period in which it needs the world’s help more than ever. The inflexibility in its statements offer no reason to hope that it will turn back. In the future, I believe we will look back on China’s attack on Google as a turning point, marking the high point in the history of China before it turned its back on the world and began the slow disintegration that would inevitably follow.