Karen, Winnie, Man and Kason, Week 2

"Should Google quit China? "

Our viewpoint is that Google should not withdraw from China.

First of all, economically, China is a high potential market, with 1,300,000,000 populations. The annual GDP is increasing continuously. In 2008, the GDP already reached 4440 billions. According to Alibaba.com, China is projected to have economic growth with 10.9% for 2010. Particularly, the advertising revenue was around RMB 155.5 billions in 2006. These indicators show that China is an indispensable market for multinational company. Google should stay to grab the economic opportunities. Apart from that, China is a stepping-stone for Google to enter the Asian market. It is believed that China would be the most dominant Asian country in the future. Google should perceive China as headquarter to exploit Asian opportunities.

Secondly, there is a very high Internet usage in China. Referring to the academic research done by China Internet Network Information Center (CNNIC), it shows that the Internet usage up to 384 millions of Chinese people in 2009. Google can take advantage of the huge usage so as to maximize their brand awareness. In the long-term, a high awareness can increase the profit of Google, specifically in advertising field.

Source: 2009 CNNIC report on Internet usage in China

Thirdly, when the local Chinese are searching for international articles and news, Google can be regarded as a well-rounded search engine, compared to the local search engines like Baidu. The reason is that Chinese search engines relatively focus on local information. Google can work as a window or a platform for Chinese people to access the foreign information. In short, the presence of Google discourages the government from blocking foreign-based news and information.

What’s more? If Google leaves China, local search engines e.g. Tencent, Baidu may monopolize the search engine industry in China. This would lead to a less variety and diversity in information for the local Chinese. One of the possible results would be the decreasing objectivity in information searching. For example, local search engines may filter foreign information and release some pro-government news or information for searchers. Searchers may lose a chance to objectively examine the information they receive.

Fourthly, since Google is a multinational company, it is essential for Google to continue its business in China. When Google expands their business in China, it is an obligation for them to obey policies and regulations in China. Besides, Google has already compromised with the Chinese government before entering China, about the information censorship of their search engine. The catalyst that is making Google to withdraw is that some Gmail accounts belonging to Chinese human rights activists are hacked. Google is no longer comfortable towards the security issue. Indeed, hackers occur everywhere. Google should not be over-sensitive and link it to political aspects. It is not rational, sacrificing all the resources and investment that the company has put into China due to the single incident.

If Google does withdraw, some negative factors will be triggered. Obviously, the issue would arouse worldwide attention on China’s Internet censorship. As we all know, the U.S. government has been a long supporter on human rights and freedom of speech. The quitting of Google would affect the U.S.-China relationship. It is because the U.S. government would criticize the Chinese government of infringing and suppressing human rights and freedom of speech. As a result, it causes a tension between these two countries.

Besides, Chinese workers of Google would lose their jobs if Google retreats. Currently, more than 1000 workers are employed by Google in China. The unemployment would bring an unfavorable effect to China’s economy. Unavoidably, the image of Google would be adversely affected.

To conclude, our analysis is divided into several dimensions, including economical impacts, political impacts, international relationship and social impacts. That’s why we sincerely hope that Google can change their decision and continue to stay in China. Through collaboration, we believe a harmonious Internet environment connecting worldwide can be created in China.

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*Reference

WIKIPEDIA. China. [Online]. Available at: http://en.wikipedia.org/wiki/China
[Accessed 24 January 2010]

WWW.ALIBABA.COM. Morgan Stanley forecasts 2009 China GDP growth of 7% to 8%. [Online]. Available at: http://news.alibaba.com/article/detail/business-in-china/100102931-1-morgan-stanley-forecasts-2009-china.html
[Accessed 24 January 2010]

WWW.GOOD.IS.COM. Why Google Should Stay in China. [Online].
Available at: http://www.good.is/post/why-google-should-stay-in-china/
[Accessed 24 January 2010]

WWW.INTERNETWORLDSTATS.COM. China-Internet Usage Stats and Telecommunications Market Report. [Online]. Available at:
http://www.internetworldstats.com/asia/cn.htm

WWW.RESEARCHANDMARKETS.COM. China Advertising Industry Forecast Report, 2007-2010. [Online].
Available at: http://www.researchandmarkets.com/reports/463777/china_advertising_industry_forecast_report.htm
[Accessed 24 January 2010]

WWW.TOMSOMSHARDWARE.COM. Google Threatens to Withdraw From China. [Online]. Available at: http://www.tomshardware.com/news/google-gmail-baidu-bing-china,9430.html
[Accessed 24 January 2010]