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Tech Companies Are Fleeing China, But Does It Mean Anything?

by Sean P. Aune | April 1, 2010April 1, 2010 4:33 pm PST

Google was the first of the big name technology companies to decide that it was time to pull up stakes and leave China.  The second has been well-known domain registration outfit GoDaddy, and now it feels like everyone is sitting around waiting for the other shoes to drop as more companies leave the communist country.  While many people have made this out to be a big deal, does it really matter?

chinese flagGoogle has said that it is leaving over censorship issues, something it has been criticized for since the day it announced it would begin servicing China.  It is pretty common knowledge that there is a lot of information the Chinese government does not want its citizens to have access to, such as the Tiananmen Square protests of 1989, (which my mere mention of those words has now banned this article from being seen in China) and Google was of course fully aware of this before it launched the censored Google.cn search page in 2006.  Now, four years later, Google has suddenly decided that it no longer wants to be a party to censorship and leaves the country.

This sudden bout of moral conscience was brought on by the fact that two Gmail accounts of Chinese human rights activists had been hacked, and that at least 34 other companies were attacked by hackers originating from inside China.

As for GoDaddy, the company was notified that as part of China’s war on Internet pornography, they wanted more detailed information on everyone who registered a .cn domain name, including color copies of their ID.  GoDaddy contacted their current 27,000 .cn domain name holders, and only 20% complied with returning the requested information.  After GoDaddy’s General Counsel Christine Jones testified before the Congressional-Executive Commission on China as to why the company was pulling out of the country, she told reporters outside that China accounts for less than one percent of the company’s revenue.  So with less people willing to cooperate with the new rules, this means that the financial impact on GoDaddy makes more sense for them to not even deal with the hassles of the country at this point.

While I am certainly not defending China, I just don’t think so many pats on the back should be passed out to the companies that are now pulling out.  If they were truly this concerned about censorship and privacy of their customers, they wouldn’t have gone to working inside the country in the first place.  They were lured by the size of the growing market there, and now that it is becoming too much of a hassle to make it cost effective, they are withdrawing from the country, but being treated like these are some sort of heroic acts.

I just think people should remember that China is the same country today as it was when these companies decided to enter the market.  Yes, it’s great they are pulling out, but let us not forget that they made a conscience decision to go into a communist country with notorious censorship and control issues in the first place.  Yay, the companies are leaving, but lets go easy on it being some sort of meaningful gesture.

What do you think?  Are the companies leaving China for moral reasons or not?


Sean P. Aune

Sean P. Aune has been a professional technology blogger since July 2007, but his love of tech dates back to at least 1976 when his parents bought...

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