Google made a brave and right decision finally.
Google stands up.
Google's decision to stop censoring searches on its China-based servers, rerouting search requests instead to its uncensored Hong Kong facilities, is historic. Google has shown itself unwilling simply to be on the receiving end of whatever Beijing dishes out—and highlighted the growing importance of Hong Kong and Taiwan in shaping the decisions that foreign businesses in China must make.
When an enterprise of Google's global dimensions and visibility reverses course in China and is no longer a passive, compliant subject of government diktats, it sends a message to enterprises world-wide: You can do the same. Submissive participation in the mainland Chinese market is neither inevitable nor unavoidable. Do not fear to assert your interests, and those of your present and potential Chinese customers.
For the most part, foreign companies doing business in mainland China previously assumed that their risks lay on the side of not complying with Beijing's orders, however burdensome or threatening to profits or property interests, physical or intellectual. Leaving the Chinese market was unthinkable, and defying or contesting Beijing's directions just as unthinkable.
Of course, as Google could envision, bucking this conventional wisdom is hardly risk free. Google may be mistaken about its own commercial interests and have to climb down in the near future—Chinese authorities are already filtering results from Google's Hong Kong search engine for mainland users. Beijing's rapid and angry response shows it fully understands the dimensions of this clash, and it may yet win, forcing Google back into censoring searches, or pushing it entirely from the mainland for being uppity.
The company announced starkly that "the Chinese government has been crystal clear throughout our discussions that self-censorship is a non-negotiable legal requirement." That position shows how aggressively Beijing's current leadership will act to control domestic information flows, and foreign businesses generally.
But the mere fact that the Google nail remains upright, despite Beijing's omnipresent hammer, is telling. And if Google succeeds, we cannot even begin to imagine the commercial implications for foreign trade and investment with China. A Google victory is also a victory for China's citizens, a surrogate win for those who value individual liberty and free markets in goods and ideas.
Google's response spotlights the distinctive role that mainland China's more free cousins, Hong Kong and Taiwan, may play in shaping business in China in the future. Because Hong Kong still retains a strong attachment to a consistent, fairly applied rule of law, in an economy many now consider freer than that of the United States, Google correctly saw it as a refuge to which it could repair.
Hong Kong's physical reality, its legal protections and lack of corruption, and its potential to be a truly open society are powerful advantages for foreign businesses. Similarly, Taiwan's appeal as a base cannot be dismissed either, especially as economic relations across the Taiwan Strait grow. More closely integrating the two cross-Strait economies will only increase Taiwan's attractiveness to foreign investors and traders.
Google's decision should also tell the U.S. government something about how to advocate its interests with China. The Google controversy coincided with cyber attacks against over 200 American companies, believed by U.S. authorities to have been launched by the People's Liberation Army. China's unchallenged behavior shows why we should not be optimistic that romancing Beijing will produce "crippling" sanctions against Iran's nuclear weapons program any time soon. Instead, the Obama administration should emulate Google's approach in official dealings, and support U.S. businesses in situations similar to Google so they do not have to act alone.