The ongoing spat between China and Google shows China to be in a far weaker position than most people had imagined.
The key point that is known about the incident is that there was a coordinated attack from within China on Google Mail and at least a dozen other foreign companies. From public statements about the incident, it appears that it could only have been conducted by a collaboration between the Chinese central government and organized crime groups within China. Only the central government would have the ability to manipulate name servers locally and in real time, in response to the actions of individual Internet users, as was apparently done. Only organized crime groups would have the botnets to give the attack the scale that it had. The description of the attack suggests a precision of timing that could only have occurred with explicit coordination.
Collaboration between a central government and organized crime is something that is rarely seen outside of failed states such as Iran. Yet the tough talk from China on this issue strongly suggests that, to them, this criminal episode is considered business as usual. This kind of corruption, in other countries and other places, has made it almost impossible for businesses to function. That the Chinese central government accepts and endorses it is an extremely troubling sign for the future of the Chinese economy. Of course, if the economy falters, the government will also, not too long after.
China, more than any other country, sees itself as the center of the world. In part this is because it has so many bright people. Yet that is irrelevant, economically speaking, if the government is so intent on keeping people from getting their work done. The Chinese central government may have logical justifications for its paranoia, but driving the world’s last great empire into poverty — the inevitable result of the track China has now shown it is on — is not the answer.
