CNN: Google / China’s Rise
January 21, 2010
My comments were featured in two separate reports that aired on CNN today.
The first focused on Google’s threat to leave China, and can be watched here.
The second was a more general piece on China’s rising influence and whether or not it is causing increased frictions with other countries. You can watch the TV report here, and read the accompanying print article here.
4 Comments
leave one →
Prof.Chovanec,
I read your recent article on Google’s threat to pull out of China. My thoughts during the past few days were not on who is responsible for this friction and who is at fault, but on the lines of what can Google as a company (which can, i believe can implement strategies faster than China as a country) do to settle this issue?
In my opinion this is a lose-lose battle where both sides would be affected. I also believe your previous article reflected the same thought. I would love to hear what in your expert opinion would be an ideal settlement strategy.
Thanks
Hari
@Hari, I don’t think it is lose-lose:
* Google wins, as their global reputation gets a boost and they can close down a negative-NPV division in China. (Or do you think the Party would allow a foreign-held company to grow into a dominant profitable monopoly even if they were compliant with censorship? It can simply organize some occasional shutdowns of Google/Youtube/Blogger services in China and presto, domestic companies gets the business…)
* Baidu wins the Mainland Chinese market, obviously.
* The Party wins increased powers of censorship, surveillance and control through being able to lean on Baidu et al and get easy comliance.
* The only faction that loses is the Chinese population, who don’t get decent Google services and don’t get privacy and freedom in their internet communication. But on the whole they don’t seem to care about having them…
Very interesting and valid thought. But my query is that (although i may be wrong here) Google by pulling out of China, would lose a huge market; even if it holds only a 30% market share in China. This market share in the long term, as we know with Google, could grow to even a good 35-40%. Even with this market share, Google would not be at a monopoly but a 40% user rate in China is not an ignorable value. Any thoughts on this?
Well, it’s not only about market share. Even though Google has some 30%, China represents about 2% of its revenue. Is it an ignorable value?