How Google took over – and lost – China

Observers talk as if it is up to Google to decide again whether they want to enter the world’s largest market: will it compromise and censor its principles as China wants? This misses the point – this time the Chinese government is taking the decisions.

Google and China have been locked up in uncomfortable tango for more than ten years and are constantly struggling about who leads and who follows. Charts that dance over the years reveal important changes in China’s relationship with Google and the entire Silicon Valley. To understand whether China is allowing Google back in, we need to understand how Google and China got here, what incentives each party faces – and how artificial intelligence could both dance to a new song.

The right thing to do?

When www.google.cn was launched in 2006, the company had only been made public two years earlier. The iPhone did not yet exist, nor Android-based smartphones. Google was about a fifth as large and valuable as it is today, and the Chinese Internet was seen as an inland water of knockoff products that were devoid of innovation. Google’s Chinese search engine was the most controversial experiment to date in internet diplomacy. To get to China, the young company that had defined itself under the motto “Don’t be bad” agreed to censor the search results for Chinese users.

Important for that Google leadership decision was a bet that by serving the market – even with a censored product – they could broaden the horizons of Chinese users and push the Chinese internet to greater openness.

At first, Google seemed to succeed in that mission. When Chinese users searched for censored content on google.cn, they saw a message that some results had been deleted. This public recognition of internet censorship was a first among Chinese search engines, and it was not popular with regulators.

“The Chinese government hated it,” said Kaiser Kuo, former head of international communication for Baidu. “They compared it to coming to my house to eat and saying,” I agree to eat the food, but I don’t like it. “” Google had not asked the government for permission before the notification was made, but was not ordered to remove it. The company’s worldwide prestige and technical expertise delivered it. China may be a promising market, but it still depended on Silicon Valley for talent, financing and knowledge. Google wanted to be in China, the thinking went, but China needed Google.

Google’s censorship disclaimer was a modest win for transparency. Baidu and other search engines in China soon followed. In the next four years, Google China fought on various fronts: with the Chinese government about content restrictions, with local competitor Baidu about the quality of search results and with its own business leadership in Mountain View, California, about the freedom to adapt global products for local needs. At the end of 2009, Google owned more than a third of the Chinese search market – a respectable share but well below 58% of Baidu, according to data from Analysys International.

The Chinese government suppressed political speech in 2013, imprisoning critics and introducing new laws against the spread of rumors online – a one-two blow that stifled political debate.

Ultimately, however, it was not censorship or competition that drove Google out of China. It was a major hacking attack known as Operation Aurora and focused on everything from Google’s intellectual property to the Gmail accounts of Chinese human rights activists. The attack, which Google said was from China, pushed the leadership of the company over the edge. On January 12, 2010, Google announced: “We have decided that we are no longer willing to continue censoring our results on Google.cn, and therefore we will be discussing with the Chinese government in the coming weeks on the basis of which we can operate an unfiltered search engine within the law, or not at all. “

The sudden turnaround blind Chinese officials. Most Chinese internet users could live their online lives with few reminders of government controls, but Google’s announcement put cyber attacks and censorship in the spotlight. The largest internet company in the world and the government of the most densely populated country were now engaged in a public confrontation.

“(Chinese officials) were really sitting on their backs and it looked like they could caves and make some kind of accommodation,” says Kuo. “All of these people who apparently did not care much about internet censorship before, were really upset about it. The entire internet was confused with this. “

But officials refused to give up terrain. “China welcomes international internet companies developing services in China according to the law,” a Foreign Ministry spokeswoman told Reuters at the time. Government control of information was and remains central to the doctrine of the Chinese Communist Party. Six months earlier, after riots in Xinjiang, the government had blocked Facebook, Twitter and Google’s YouTube in one fell swoop, reinforcing the “Great Firewall.” The government made a guess: China and its technology sector did not need a Google search to succeed.

Google soon left google.cn and withdrew to a search engine based in Hong Kong. In response, the Chinese government decided not to completely block services such as Gmail and Google Maps, and for a while it also allowed occasional access from the mainland to the Hong Kong search engine. The two parties settled in a tense stalemate.

The leaders of Google seemed to be waiting. “I personally believe that with such a type (censorship) you cannot build a modern knowledge society,” Google chairman Eric Schmidt told Foreign Policy in 2012. “I think this kind of regime approach will end in a sufficiently long time? I think absolutely.”

Flip roles

But instead of wasting away under censorship, the Chinese internet sector flourished. Between 2010 and 2015 there was an explosion of new products and companies. Xiaomi, a hardware maker now worth more than $ 40 billion, was established in April 2010. A month earlier, Meituan, a Groupon clone who became a juggernaut of online-to-offline services, was born; it became public in September 2018 and is now worth around $ 35 billion. Didi, the company that has driven Uber from China and is now challenging it on international markets, was founded in 2012. Chinese engineers and entrepreneurs returning from Silicon Valley, including many former Googlers, were crucial to this dynamic and brought world-class technical and entrepreneurial chops in markets isolated from their former employers in the US. Older companies such as Baidu and Alibaba also grew rapidly in these years.

In 2017, the government launched a new campaign against virtual private networks, software that is widely used to bypass censorship.

The Chinese government played a contradictory role in this process. It suppressed the political speech in 2013, the imprisonment of critics and the introduction of new laws against ‘spreading rumors’ online – a one-two blow that largely stifled the political discussion about the once so raw social media sites. Yet it also launched a high-profile campaign to promote “mass entrepreneurship and mass innovation.” Government-funded start-up incubators throughout the country, as well as government-supported venture capital.

This confluence of forces brought results. Services such as Meituan flourished. That also applied to the super-app WeChat from Tencent, a ‘digital Swiss army knife’ that combines aspects of WhatsApp, PayPal and dozens of other apps from the West. E-commerce colossus Alibaba was published on the New York Stock Exchange in September 2014 and sold for $ 25 billion in shares – still the most valuable IPO in history.

In the midst of this homegrown success, the Chinese government decided to break the uncomfortable Google file. In mid-2014, a few months before the Alibaba IPO, the government blocked almost all Google services in China, including many that were considered essential for international companies such as Gmail, Google Maps and Google Scholar. “It surprised us because we found that Google was one of those valuable features (which they could not afford to block),” says Charlie Smith, the pseudonymous co-founder of GreatFire, an organization that monitors and bypasses Chinese internet controls.

The Chinese government had done an unexpected hat-trick: shutting out the Silicon Valley giants, censoring political speech and still cultivating an internet that was controllable, profitable, and innovative.

AlphaGo in your own way

While the Chinese internet flourished and the government did not decline, Google started looking for ways to return to China. It tried out less politically sensitive products – an “anything but search” strategy – but with mixed success.

In 2015 there were rumors that Google was almost ready to bring its Google Play app store back to China, awaiting approval from the Chinese government – but the promised app store never came true. This was followed by a collaboration with Mobvoi, a Chinese smartwatch maker founded by an ex-Google employee, to make voice search available on Android Wear in China. Google later invested in Mobvoi, the first direct investment in China since 2010.

In March 2017 there were reports that authorities would allow Google Scholar again. They didn’t do that. Reports that Google, together with NetEase, a Chinese company, would launch a mobile app store in China, but that this did not work either, although Google could relaunch its smartphone translation app.

In May 2017, in Wuzhen, a tourist town outside of Shanghai, a confrontation took place between AlphaGo, the Go-playing program of Google’s brother and sister company DeepMind, and Ke Jie, the world’s number one human player. AlphaGo won all three games in the game – a result that the government might have foreseen. Live streaming of the competition in China was prohibited, and not only in the form of video: as the Guardian put it: “outlets were not allowed to cover the competition live in any way, including text comments, social media or push notifications. “DeepMind has broadcast the competition outside of China.

During the same period, Chinese censors quietly rolled back some openings that had catalyzed Google’s previous Chinese activities. In 2016, Chinese search engines began to remove the censorship claimants that Google had pioneered. In 2017, the government launched a new campaign against virtual private networks (VPNs), software that is widely used to bypass censorship. Meanwhile, the Chinese authorities began to roll out comprehensive AI-powered surveillance technologies throughout the country and to build a so-called “21st-century police state” in the western region of Xinjiang, home to the Muslim Uighurs of the country.

Despite the retrograde climate, Google has closed 2017 with an important announcement: the launch of a new AI research center in Beijing. Google Cloud’s chief scientist, Fei-Fei Li, who was born in China, would oversee the new center. “The science of AI knows no boundaries,” she wrote in the announcement of the launch of the center. “Not the benefits either.” (Li left Google in September 2018 and returned to Stanford University, where she is a professor.)

If the research center was a public symbol of Google’s ongoing efforts to gain a foothold in China, Google was also quietly working on the limitations of the Chinese government. Dragonfly, the prototype of the censored search engine that has been demonstrated for Chinese officials, is blacklisting the most important search terms; it would be operated as part of a joint venture with an unnamed Chinese partner. The documents obtained The Intercept said the app would still tell users when the results were censored.

Other aspects of the project are particularly worrying. Reportedly, the app’s prototypes link users’ searches to their mobile number, opening the door to more surveillance and possibly arresting people searching for prohibited material.

In a speech to the Dragonfly team, later leaked by The Intercept, Ben Gomes, head of Google search, explained Google’s goals. China, he said, is “perhaps the most interesting market in the world today.” Google not only tried to make money by doing business in China, he said, but was looking for something bigger. “We need to understand what is happening there to inspire us,” he said. “China will teach us things we don’t know.”

At the beginning of December, Google CEO Sundar Pichai told a congressional committee that “we currently have no plans to launch in China,” although he would not rule out future plans. The question is, if Google wants to go back to China, will China let it in?

The calculus of China

Try to answer that question as an adviser to President Xi Jinping.

Retrieving Google certainly has advantages. The growing number of knowledge workers in China needs access to global news and research, and Baidu is notoriously bad at delivering relevant results from outside of China. Google could serve as a valuable partner for Chinese companies that want to expand internationally, as demonstrated by a patent-sharing partnership with Tencent and an investment of $ 550 million in e-commerce giant JD. Google’s return would also help to legitimize the Communist Party’s approach to the Internet, a signal that China is an indispensable market – and an open market – as long as you abide by the rules.

The exit from Google in 2010 meant a major loss of face for the Chinese government. If leaders give Project Dragonfly the green light, they run the risk again.

But from the perspective of the Chinese government, these potential benefits are marginal. Chinese citizens who need access to the global internet can usually still do this via VPNs (although it is getting harder). Google does not have to have a company in China to help Chinese internet giants do business abroad. And the giants of Silicon Valley have already stopped their public criticism of Chinese internet censorship and instead praise the dynamics and innovation of the country.

The political risks of allowing Google to return, on the other hand, are great for Xi and his inner circle. The hostility towards both China and Silicon Valley is great and is increasing in American political circles. A return to China would place Google in a political pressure cooker. What if that pressure – through antitrust measures or new legislation – would actually force the company to choose between the American and Chinese markets? The sudden exit from Google in 2010 meant a major loss of face for the Chinese government towards its own citizens. If Chinese leaders give Project Dragonfly the green light, they run the risk of it happening again.

A smart advisor would probably think that these risks – for Xi, for the Communist Party and for his or her own career – outweigh the modest benefits of allowing Google’s return. The Chinese government oversees a technology sector that is profitable, innovative and largely driven by domestic companies – an enviable position to sit in. If Google participated again, it would only have less influence. It is therefore better to stick to the status quo: dangle the prospect of full market access while Silicon Valley companies occasionally clash by allowing peripheral services such as translation.

Google’s guess

Google has one factor in its favor. When it first entered China during the days of desktop internet and left when the mobile internet broke, it is now trying to return to the AI ​​era. The Chinese government has high expectations of AI as a multifunctional tool for economic activity, military power and social governance, including supervision. And Google and its alphabetic brother DeepMind are the world leaders in corporate AI research.

This is probably why Google held publicity stunts such as the AlphaGo competition and an AI-driven “Guess the Sketch” game on WeChat, and also took more substantive steps, such as setting up the Beijing AI lab and promoting it of Chinese use of TensorFlow, an artificial intelligence software library developed by the Google Brain team. Together, these efforts form a kind of artificial intelligence lobby designed to influence Chinese leadership.

However, this pitch is faced with problems on at least three battlefields: Beijing; Washington, DC; and Mountain View, California.

Chinese leaders have good reason to feel that they are already getting the best of both worlds. They can take advantage of software development tools such as TensorFlow and they still have a prestigious Google research laboratory to train Chinese AI researchers, all without granting Google market access.

Meanwhile, US security officials in Washington have been irritated that Google is actively seeking a geopolitical rival and refusing to work with the Pentagon on AI projects because its employees object to their work being used for military purposes.

Those employees are the key to the third battlefield. They have demonstrated their ability to mobilize quickly and effectively, such as with protests against US defense contracts and a walkout about how the company has dealt with sexual harassment. At the end of November, more than 600 Googlers signed an open letter demanding that the company drop the Dragonfly project, saying: “We object to technologies that help the powerful to suppress the vulnerable.” Discouraging because these challenges sound – and high as the cost of pursuing the Chinese market can be – they have not completely deterred Google’s best copper. Although the development of Dragonfly seems to have been at least paused, the wealth and dynamism that make China so attractive to Google also means that the decision to do or not do business no longer requires the company to do so.

“I know Silicon Valley people are very smart and successful because they can overcome any problem they face,” said Bill Bishop, a digital media entrepreneur with experience in both markets. “I don’t think they have ever faced a problem like the Chinese Communist Party.”

Matt Sheehan is a fellow at MacroPolo and collaborated with Kai-Fu Lee on his book AI Superpowers.