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The Shame Game By: Ethan Gutmann
FrontPageMagazine.com | Monday, February 27, 2006

For the company reps, it was the stuff of nightmares.

Congressman Tom Lantos, a Holocaust survivor with snow-white hair turned his wolfishly steady blue eyes, focused on each representative and in a thick Eastern European accent asked, "Are you ashamed?" as if he were channeling a malevolent Sigmund Freud.

On February 15, the House Subcommittee on Human Rights, led by Congressman Chris Smith, held hearings into the activities of four American companies – Yahoo, Microsoft, Cisco and Google – who have assisted the Chinese Communist party (CCP) in the creation of China’s Big Brother Internet.

I experienced a dream-like sensation myself as I examined the teeth of the new Global Online Freedom Act of 2006: servers based outside of China, regular audits by the State Department, dissident lawsuit possibilities, and other measures I had never dared to consider. So this is what power looks like. It took six years, but Daddy’s home. Perhaps people like me can move on to other issues.

Or perhaps not yet. Passage of the bill is said to be unlikely at best. And the radical middle, the traditional supporters of the business-will-change-China thesis appear stuck somewhere between the denial and bargaining stages, signaled by the appearance of two essays in the New York Times a few days after the hearings.

In Nicholas Kristof’s column, "China's Cyberdissidents and the Yahoos at Yahoo," Kristof goes to some length to rank the companies by guilt. Yahoo, because it assisted the imprisonment of three dissidents, wins by a mile. "We have no idea how many more dissidents are also in prison because of Yahoo," Kristof thunders.

The company, he says, is a "national disgrace."

Kristof characterizes Microsoft’s light censorship and blog shutdown as "cowardly, but nothing like Yahoo."

Google, which recently created a censored, castrated version of their search engine for Chinese consumption, is essentially "innocent." Cisco Systems "enthusiastically peddles its equipment to the Chinese police," which makes them "sleazy," but again, "nothing like Yahoo."

I wonder if Kristof bothered to stick around for Harry Wu’s testimony. Back in 2003, Wu, posing as a salesman of surveillance systems, called police stations across China. No one was interested in his wares. Why?

Because Cisco’s "Policenet" - a real-time system to access personal information - "speech recognition, automated surveillance of telephone conversations, integration of biometric data, wireless Internet access to track individual users, video surveillance data from remote cameras back to a centralized surveillance point" - and, of course, e-mail, on every citizen in China, was already being used by Chinese state security in 21 out of 22 provinces.

Thus, we "have no idea how many more dissidents are also in prison," or starved, beaten in psychiatric care, or executed with a bullet because of Cisco.

Falun Gong practitioners and small-time labor activists, the humdrum arrests that don’t get publicized, could well stretch into the thousands. As Harry Wu testified, Cisco’s shame is that their transaction with the Chinese police "smells like blood."

Yet shame takes so many exquisite forms. Yahoo’s shame is their descent into darkness. In 2000 it began censoring its Chinese chatrooms and search engine; by 2002, it had signed a pledge to protect Chinese "social stability"; and by 2004, it aided the arrest of its first dissident. Microsoft’s shame is that it is Microsoft, big enough to avoid kowtowing, even on the small stuff. Google’s shame is that it tried to sell us, Americans and Chinese alike, a kosher pig.

Granted, ranking shame is an interesting parlor game, but why does Kristof play it? Because he wants to toss one company, Yahoo, to the human rights wolves, thus lightening the sleigh so that the Internet, with American corporate assistance, can continue forward as "a force for change in China." Kristof is a cyber-utopian, and the belief that blogs will free China emerges as the latest incarnation of this faith.

Before blogs, it was mobile-phone messaging. Before that, proxy servers. Before that, Internet cafes.

Unfortunately, China’s net police observed, broke, and forced each of these systems into submission. Chinese bloggers, who have recently lost any semblance of anonymity, are becoming the latest paragons of self-censorship.

Kristof gives the game away when he refers to the Global Internet Freedom Bill as an "overreaction."

Kristof’s alternate solution: Google and Microsoft should publish lists of prohibited language. But for Yahoo the gloves really come off: Kristoff demands that the company should provide financially "for the families of the three men it helped lock up" and establish "annual fellowships in their names to bring Web journalists to America on study programs."

Just for laughs, read that last sentence again. Then let’s turn to the second New York Times essay, "Enough Shame to Go Around in China," by Joe Nocera, and echoed by former Secretary of Labor, Robert Reich, recently on NPR’s "Marketplace." Nocera intelligently dismisses most of the industry arguments – American technology is freeing China, we have to abide by local laws – but then goes for the rhetorical cheap and easy: politicians and industry reps are equally guilty (ergo no one is guilty). The passage of Permanent Normal Trading Relations (PNTR) gave companies the green light to engage with China. They did. Now it’s up to Congress to pull the chestnuts out of the fire, but it won’t because it doesn’t have the guts.

Of course, engagement originally meant buying and selling goods of mutual interest without changing one’s standards, not simply internalizing CCP objectives. In Nocera’s second point - that Congress is too inconsistent, too tainted with hypocrisy to stand in judgment he pretends that Congress is a monolith. Yet Congress is bitterly divided over China, and in the wake of recent events, even die-hard PNTR supporters may be having their doubts. The suggestion that "consistency" should trump morality, U.S.strategic interests, and the liberation of the Chinese people is a classic hobgoblin for little minds, a prescription for stasis, and a gross misrepresentation of U.S. business as a powerless victim. Nocera refers to the history of sanctions in South Africa. He ought to have looked at the history of U.S. business in Beijing too. In 2000, Microsoft fought the Chinese government over the ownership of encryption source codes and won. It prevailed by building an industry-wide international coalition and by threatening to move out of China forever.

Conventional wisdom says this sort of "chicken" strategy won’t work. Other companies, domestic Chinese or European, can take the place of Microsoft, Google, Yahoo and Cisco. True, but only in the short-term. If Chinese companies fill the gap, China will have a second-rate Internet with compatibility problems, and the CCP knows it. If the Europeans fill the gap, then it will be a second-rate Internet with long-term profitability problems. Call it gunboat diplomacy, but the presence of American companies in any area of Chinese industry guarantees a minimum of legal recourse for everyone involved, and everyone on the ground in Beijing knows that too.

Debating what sort of industry coalition can work in China is legitimate and useful. Unfortunately the Congress-is-too-hypocritical-to-point-fingers argument shunts this debate aside. Ironically, everyone – Congress, industry, and even most human rights activists – would like to avoid intrusive government regulation, except as a final resort. Why? Because greed is good, and greed mitigated by shame is called "corporate responsibility." To induce it, you confront the patient, and you raise the pain threshold – are you ashamed? – spurring Yahoo, Microsoft, Cisco and Google to form the kind of industry coalition that can stand up to the CCP.

In the meantime, Nocera is right, there is enough shame to go around. But the shame in this case also belongs to those who are caught in the denial stage – cyber-utopians like Kristof, and cynics like Nocera and Reich. And the glory goes to Lantos and Smith for taking a small, but momentous step towards freeing the nascent democracy forces of China.

Ethan Gutmann is the author of Losing the New China: a Story of American Commerce, Desire and Betrayal. A former Beijing business consultant and former visiting Fellow at PNAC, he is the winner of "Spirit of Tiananmen" and "Chan's Journalism" awards in 2005. He has written for Weekly Standard, Asian WSJ, Investor's Business Daily and other publications.

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