Will Google really pull out of China?

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As Kuo put it “this is absolutely nothing to sneeze at.” Its users were, compared to local rival Baidu, more urban and wealthier.

In both terms of market share and audience demographics then, if Google leaves China, it is walking away from a profitable and desirable business – all the more so when you consider there are currently 384 million internet users in China – more than the entire population of the US.

Taking it slowly

Given the fact it’s high stakes for both the CCP and Google, it’s perhaps not surprising there has largely been a strange and significant silence since Google’s original blog post.

Kuo thinks Beijing realises it has nothing to gain by pushing Google away and being overly hostile, hence the silence. The ball is very much in Google’s court, yet it’s clear they’re making preparations to decamp.

Kuo pointed out that while there are pros for the hardline argument within the CCP, in that it appeases nationalists and saves face, there are significant cons.

The rulers of China are largely technocrats and engineers, and reports they’ve commissioned have claimed Google closing would be a setback to China’s own technological progress. Then there’s the backlash from Google’s urban elite audience, and of course, the damage to China’s international image.

Finally, it would cede a monopoly in search to Baidu – and for all the fact they’re communists, in other technology industries such as the mobile phone market, the CCP has shown it likes competition.

The worst case scenario is that Google departs in an atmosphere of acrimony, and the CCP retaliates by blocking Google.com. Kuo thinks this unlikely, and that the more likely moderate outcome is Google shuttering Google.cn but offering Chinese-language search from Google.com, along with carrying on running sales and mobile R&D from inside China.

The best case scenario he laid out was that it's possible Google.cn will stop censoring results and still stay. Kuo pointed out Google is very much a web 1.0 company, in that it links to static content elsewhere, and recently, the CCP has been far more interested in censoring web 2.0 sites, such as social networks as these are the places which allow rapid dissemination of information and organisation of people – things which the CCP recognises as dangerous to its control of power.

Success for Google?

Kuo finished his talk by saying that when Google went to China in 2005 it argued for engagement. If it was hoping to engage the CCP, then its time in China must, he argued, be judged a failure, as internet censorship has worsened.

If, however, it was to engage with Chinese internet users, then it was very successful – Google succeeded in creating a company that became a part of the Chinese internet landscape and that will be missed.

He concluded by asking what drove Google to this all or nothing gambit? He admitted a strategy of nuanced engagement is resource intensive and Google faces a lot of government relations issues all around the world. Perhaps it decided it could not afford to fight a battle with the CCP every month, and this resulted in a binary decision – tow the line or cut their losses.

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