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Tech Industry

Looking the other way

Cuddling up to Beijing inevitably will raise hard questions about the costs of operating in other countries, says News.com's Charles Cooper.

The United States may have been the economic wunderkind of the 20th century, but the 21st century belongs to China. And that's why every big technology outfit in the world is champing at the bit.

Proponents of greater foreign engagement also see another benefit: They expect the Middle Kingdom's transition to a market-based economy will help loosen the authoritarian societal controls exerted by China's Communist Party.

Maybe so, but that's really long-term thinking. Few China experts predict dramatic changes anytime soon. Most envision an uneven interregnum that lasts quite some time--and that could force Silicon Valley to make hard choices about where to line up.

Whatever their personal opinions, you won't find American technology execs going out of their way to lecture their hosts about human rights.

Beijing's welcome mat is contingent on foreign guests respecting the rules of the game and butting out of domestic affairs. The computer industry knows this. Whatever their personal opinions, you won't find American technology execs going out of their way to lecture their hosts about human rights. The usual explanation is that it's none of our business and the Chinese wouldn't listen, anyway. And in case you hadn't noticed, there's a gold rush going on.

However, as much as these folks might prefer to play the role of disinterested spectators, the flow of current events has a way of lousing things up.

Consider the recent dustup over the jailing of a local journalist named Shi Tao. Shi got sentenced to 10 years in jail for e-mailing an internal Communist Party message to foreign media. The message warned of the potential for social unrest in June 2004 connected with the anniversary of the Tiananmen Square massacre.

Last week, Reporters Without Borders said it had documents implicating Yahoo in the journalist's imprisonment. The watchdog organization said Yahoo turned over information that Chinese authorities used to trace the message to Shi Tao's e-mail account and computer. (You can hear my interview with a spokesman for Reporters Without Borders by clicking here and selecting the Sept. 8 podcast.)

This isn't the first time American information technology companies have been accused of compromising with Chinese authorities. Critics charged Microsoft's new Chinese portal with including blocks on certain words and phrases, including "democracy," "freedom" and "human rights." Elsewhere, Google reportedly filtered its Chinese-language site to omit news banned by the authorities.

But the difference here is that Reporters Without Borders charged Yahoo with active collaboration that led to someone's imprisonment. When the news broke, Yahoo's first response was to duck behind a scandalously amoral statement claiming that Yahoo was required to adhere to local regulations and customs.

A few days later, co-founder Jerry Yang finally admitted the part his company played in the Shi Tao affair. "I do not like the outcome of what happens with these things," Yang said while attending a conference in China. "But we have to follow the law."

Is it so easy to look the other way when big bucks are at stake?

"We don't know what they want that information for, we're not told what they look for," Yang was quoted as saying by The New York Times. "If they give us the proper documentation and court orders, we give them things that satisfy both our privacy policy and the local rules."

Yang reportedly received a nice hand from the roomful of mostly local attendees. No surprise there. China's business elites have a stake in not rocking the boat. Business is business and politics is politics. But though Yahoo says it must follow local "customs," that's a slippery slope. What if bribes are considered part of the normal business customs? What if a prohibition against females driving is also a local business custom? "Certainly there's a line between offensive and illegal, but just because something is custom doesn't mean it's OK," a former Hewlett-Packard executive wrote me after spending several years working abroad.

Of course, the United States is in no position to lecture. Nothing's preventing the Recording Industry Association of America from putting the squeeze on local Internet service providers around the country to divulge customer data so the music industry can wage its antipiracy jihad. And if anyone can guarantee that Uncle Sam won't abuse the provisions of the infinitely reaching Patriot Act, I'd like to know about it.

Still, I am disappointed at how little character our own technology leaders demonstrate under pressure. After all, many of the founding members of this community had their world view shaped by the communal and libertarian outlook of the 1960s. Is it so easy to look the other way when big bucks are at stake?

The Shi Tao case will not be the last time Silicon Valley gets put on the spot. Cuddling up to Beijing inevitably will raise discomfiting questions about globalization and the cost U.S. companies must pay to operate in the countries in which they do business.