On Google exiting China: Not “If” but “When”?

Last week, I was in Japan for the Release Council. I turn on the TV in my room and flick to BBC news… and there it was! It seems that all started with David Drummond‘s explanation in the Google Blog about a new approach to China.

As this topic has been in the news a lot recently, I don’t really want to review here if Google is right or not on changing their policy. What  I wanted to discuss with you is something that really called my attention when the announcement was done.

Just after discussing the “what and why” of Google’s decision the BBC person asked the Google representative: “Have you already discuss this with the Chinese goverment?” – the answer from Google :”Not yet”

It’s a dilemma, a Prisioner’s Dilemma

Since Google decided to enter the Chinese market in 2006, it engage on an iterative prisoner’s dilemma with the government. Google would cooperate by censoring its results, while the government would have to cooperate by allowing Google to run its business. Clearly Google believes that the hacking into its user’s account constitute a deflection and hence it has retaliated.

The fact that Google announce their counter-deflection through the public media is explained by Thomas Schelling as way to increase the stakes. It is now much harder for Google to not withdraw from China if the can not agree to keep their search engine uncensored, that if they hadn’t done this public commitment. This is equivalent to an army general burning the bridge that his troops have just cross to remove the possibility of retreat.

It is only a matter of time

Thanks to Google’s public statement  China knows that it is serious about leaving the county, but also it knows that the whole world is watching. Any concessions made by China to Google will set a clear and very public precedent for future negotiations with other parties. So China has no option that not allow search engine to become uncensored… and Google knows this.

Why? If you look at previous “games” played by China, you can asses that they are not very tolerant of the other player’s deflections (see Rio Tinto) while they expect theirs to be accepted. China has to keep its reputation, and the consequence of doing so (Google exiting the country) are a small price to pay.

If Google wanted to reach an agreement with China , I would have expect to notify the goverment before the media… Hence, the inevitable conclusion is that google.cn will be close down.

What Next?

Assuming that Google does not back tracked their statements, I would predict that it would be out of China by summer. But, would this be the end of the story?  The game of this conflict might look something like this:

  1. Reported Hacking of email accounts (deflection by China)
  2. Google  removes censorship from search engine (Google’s retaliation)
  3. Google.cn website access is restricted (China’s government retaliation)
  4. Google exits the country (Google’s retaliation)
  5. ?

The game has developed an escalation ripple effect, in which each retaliation leads to a higher punishment from the other player. The question is what will be step 5? will China accept that the Game is over, or will it extend its retaliation beyond the search engine market?  Will it go after Android or Gmail? Only time will tell…

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One Response to On Google exiting China: Not “If” but “When”?

  1. BTR Naidu says:

    If step 4 really takes place, Microsoft’s bing will be happy to capture that market 🙂 … Along with google.cn, I think other google services will be withdrawn too but this also depends on how serious retaliation steps taken by both giants.

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