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April 23, 2006

Microsoft executive says China censorship no biggie

Posted by David Hunter at 11:15 PM ET.

The visit of PRC President Hu Jintao to Microsoft was pretty much an anticlimax, but the camaraderie seems to have overflowed for Microsoft VP Craig Mundie (who was himself in China) according to the government-run Xinhua Financial News report at Forbes:

The impact of government censorship on Internet freedoms of China’s citizens has been overstated, a Microsoft executive said.

Craig Mundie, senior vice president and chief technical officer for Microsoft, suggested that hyperbole had crept into the debate over state controls over access to the Internet in China.

‘There are literally hundreds of millions of Chinese people who have access to the Internet. The government here tends to control very selectively access to certain pieces of information. That’s their prerogative,’ he said.

‘The companies that do business here have to deal with the legal environment as it is but I think it is, in my view, widely overstated to think that the Chinese citizen today isn’t benefiting from access to the Internet.’

I’m not sure who made the overstatement he refers to, but perhaps the concept was an attempted “save” on Mundie’s part after venturing down a risky path in responding to a reporter’s question. It could also be a translation difficulty as the next section demonstrates:

Mundie said in response to a reporter’s question that Microsoft continued to provide the Chinese government with access codes for its Windows platform, as it does to other national governments.

‘I have no concern about that,’ he said on the sidelines of the Boao Asian Forum, an annual gathering of business and political figures on the southern Chinese island of Hainan.

For “access codes,” read “source code,” of course.

Back home, Microsoft Chairman Bill Gates’ elation was more restrained:

Microsoft chairman Bill Gates made a cryptic remark about Internet freedom at a luncheon with Chinese President Hu Jintao, underscoring the sensitivity of the issue.

“This new era of an Internet-based economy also presents new challenges to us all,” Gates said in a speech that preceded Hu’s to a gathering of about 600 people at a luncheon hosted for the visiting Chinese president.

“It is my belief that industry and government around the world should work even more closely to protect the privacy and security of Internet users, and promote the exchange of ideas, while respecting legitimate government considerations.”

The statement appeared to be urging China to respect the rights of Internet users, but also seemed to suggest Gates thinks “legitimate” government worries need to be taken into consideration, without defining legitimate.

I don’t know that it is worth parsing either reaction too closely other than to observe that the PRC is a rather odd place to do business for Western companies. That fact is amply demonstrated in Clive Thompson’s lengthy NY Times Magazine article of today titled “Google’s China Problem (and China’s Google Problem).” You’ll have to read it yourself to get the full flavor, but I was entranced by the activities of Baidu, the homegrown Chinese search engine company:

In China, downloading illegal copies of music, movies and software is as normal and accepted as checking the weather online. Baidu’s executives discovered early on that many young users were using the Internet to hunt for pirated MP3′s, so the company developed an easy-to-use interface specifically for this purpose. … Almost one-fifth of Baidu’s traffic comes from searching for unlicensed MP3′s that would be illegal in the United States. Robin Li, Baidu’s 37-year-old founder and C.E.O., is unrepentant. “Right now I think that the record companies may not be happy about the service we are offering,” he told me recently, “but I think digital music as a trend is unstoppable.”

Particularly the free variety.

While Baidu appealed to young MP3 hunters, Google became popular with a different set: white-collar urban professionals in the major Chinese cities, aspirational types who follow Western styles and sprinkle English words into conversation, a class that prides itself on being cosmopolitan rather than nationalistic. By pulling in that audience, Google by the end of 2002 achieved a level of success that had eluded Yahoo: it amassed an estimated 25 percent of all search traffic in China — and it did so working entirely from California, far outside the Chinese government’s sphere of influence.

Then on Sept. 3, 2002, Google vanished. Chinese workers arrived at their desks to find that Google’s site was down, with just an error page in its place. The Chinese government had begun blocking it.

Brin is too diplomatic to accuse anyone by name, but various American Internet executives told me they believe that Baidu has at times benefited from covert government intervention. A young Chinese-American entrepreneur in Beijing told me that she had heard that the instigator of the Google blockade was Baidu, which in 2002 had less than 3 percent of the search market compared with Google’s 24 percent. “Basically, some Baidu people sat down and did hundreds of searches for banned materials on Google,” she said. (Like many Internet businesspeople I spoke with in China, she asked to remain anonymous, fearing retribution from the authorities.) “Then they took all the results, printed them up and went to the government and said, ‘Look at all this bad stuff you can find on Google!’ That’s why the government took Google offline.” Baidu strongly denies the charge … . Still, many Beijing high-tech insiders told me that it is common for domestic Internet firms to complain to the government about the illicit content of competitors, in the hope that their rivals will suffer the consequences. In China, the censorship regime is not only a political tool; it is also a competitive one — a cudgel that private firms use to beat one another with.

Sounds like a fun bunch, particularly since illicit content nets you a police raid if you are located in-country. Of course, if you do well stamping out illicit content, your company may win one of the coveted “Self-Discipline Awards.” That and more by following the link.

Filed under Bill Gates, Coopetition, Craig Mundie, Executives, General Business, Google, Governmental Relations, Microsoft, Public Relations

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One Response to “Microsoft executive says China censorship no biggie”

  1. A tale of Baidu, MSN China, and Windows Live Search -- Microsoft News Tracker Says:

    [...] Ah, but Red China is a special case when it comes to Web search that wouldn’t reflect adversely on the prowess of Windows Live Search. As I have mentioned before, Baidu seems unusually “well attuned” to the whims of the restrictive Red Chinese government and it gets a significant fraction of its traffic from searches for unlicensed music files which a Chinese court just confirmed as legal. (If you are curious about free MP3 downloads, an inability to read Chinese is not a problem.) [...]

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