This has been a bad month for internet freedom in China (and really a few bad decades, but who counts?). The government enacted a broad cybersecurity law earlier this year that allows Beijing to unilaterally take control of critical Internet infrastructures, while demanding that foreign companies keep all local data in China – thereby preventing cloud services like Amazon Web Services transfer information between local and foreign data centers, for example.
That's not all. As Jon noted earlier today, the Chinese government has also asked Apple to remove hundreds of apps from the Chinese version of App Store this year, including popular social messengers such as Skype and VPN allowing Chinese citizens to access information outside the big firewall. ]
So it is with a lot of irony that China is cut off from the rest of the world on the Internet, and that it has hosted the fourth annual Internet conference in Wuzhen the week last. In an unexpected surprise, Apple and Google business leaders, Tim Cook and Sundar Pichai, came forward to participate in the "festivities". Cook even made a speech and greeted the audience with a standing ovation.
The theme of the World Internet Conference was perhaps "Light of the Internet", but the theme of the conference was to be: "How far is it too far?"
Chinese President Xi Jinping has repeatedly increased the government's controls over the Internet throughout his administration, and with his rise to the "leader" at the 19th Party Congress this year, these checks should continue to tighten. Therefore, it is not unusual for foreign technical officials to make the pilgrimage to China to try to maintain their access to the market – or to have any access. Only a few weeks ago, in October, Cook was back in China with Mark Zuckerberg to attend the annual advisory board of the Tsinghua University School of Business, which Cook joined in 2013.
Almost all technical executives have to face the fact that China, whose market is second to the United States, completely isolates its Internet industry from foreign competition. Google, Facebook and other tech giants remain fully secure. LinkedIn has faced serious setbacks in recent weeks, despite some early successes in venturing into the Chinese market with a professional social network and not the type of message that theoretically worries the central government.
Apple seems to be the only big company in Silicon Valley that has sailed on the changing tides, although it has considerable leverage given that its manufacturing is heavily based in China and employs hundreds thousands of people by its Chinese manufacturing partners.
To be fair to the giants of SV technology, the complexity of operating in China is not any easier for domestic companies. The Chinese Communist Party has placed its sites on companies like Alibaba and Tencent, proposing that big tech companies provide a seat on the board of directors, and also "donate" equity to the government.
That goes back to the question then: until where is it too far? In Wuzhen this weekend, Alibaba's founder, Jack Ma, was quoted by the Wall Street Journal as saying that "when you decide to come, get ready. Follow the rules and laws and spend 10 years. "What happens when the law requires that all source code be handed over to the government, that the government needs a seat on the board of directors and" special management shares "?
Google may regret its decision to leave China in 2010 after allegedly state-sponsored hackers tried to enter several Gmail accounts of Chinese human rights activists. Pichai, Google's general manager, did not have a platform at the Wuzhen conference this weekend unlike Cook, although he sat on a panel of technical executives. But in the end, the decision may have saved the business from the rapidly invading hand of the Chinese state. For so many other Valley technology companies, the line between freedom of the internet and tyranny is quickly fading. Deciding to give up the second largest market in the world is not an easy call, but may ultimately be the best business decision.
Featured image: Thomas Depenbusch / Flickr UNDER A CC BY 2.0 LICENSE