- Behind The Scenes
- News & Views
This has raised the debate on doing business in China where widespread opinion is that the Chinese government outwardly favour local businesses and is said to actively work against foreign own companies. Baidu controls 58.4% of the search market, compared with Google's 35.6%. The next biggest company, Sogou, has only 1% whilst Microsoft's Bing and Yahoo combined only account for 1% share. Baidu states this is because it better understands the needs of Chinese consumers and advertisers. If Google does leave this will leave an outright monopoly in the country. This has raised the ethical bar for companies doing business in China re-igniting debate over global censorship of the Internet, re-invigorating human rights groups drawing attention to abuses in the country. The Obama administration issued statements of support for Google, and members of Congress are pushing to revive a bill banning U.S. tech companies from working with governments that digitally spy on their citizens.
China Foreign Ministry spokesperson Jiang Yu said in prepared remarks last week: "I want to stress that China's Internet is open. The Chinese Government encourages the development of (the) Internet and endeavours to create a sound environment for the healthy development of (the) Internet. Hacking in whatever form is prohibited by law in China."
Yahoo dragged into the debate
A day after Google's announcement Yahoo said it stood aligned with Google's position that attacks o company networks are deeply disturbing and that violation of Internet user privacy is something that must be opposed. However, Yahoo has been criticised for jumping on the bandwagon too late as some sources say Yahoo knew it had been a target of sophisticated Chinese Cyber attacks on US firms, but remained silent. Whilst Yahoo's Chinese partner e-commerce firm Alibaba Group, in which Yahoo owns a 40% stake, nonetheless called Yahoo's statement "reckless". Alibaba Group has communicated to Yahoo! That Yahoo's statement that "its aligned with the position Google took last week is reckless given the lack of facts and evidence", the firm said in a statement.
The Price of Doing Business in China
In one rare victory last year, complaints from U.S. businesses and Washington forced the Chinese government to back down from its initial demands that PC makers, including Hewlett-Packard and Apple, install Internet-filtering software on computers sold in that country.
It is thought that even if Human rights and censorship issues don't matter much to company executives, being hauled before Congress, called to account by shareholders and castigated in the media might do.
It is not expected that Google's decision will upend the status quo in China, but some companies may step up efforts behind the scenes to ensure they are not obviously vulnerable to the same kinds of bad publicity that Google and Cisco and Yahoo ran into.
On the other hand, many businesses could simply see Google's departure as an opportunity to tighten relationships in China and boost their market share in the world's most populous nation. Most businesses have declined to comment on how Google's move will alter their China plans, and some have said emphatically that nothing about their dealings there will change.