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The Great Firewall of China Will Engulf the Gutless

For anyone thinking that the - dynasty war would be resolved quickly — and that mutual economic concerns would ultimately force both armies to ratchet down this uniquely 21-century cyberduel — this was the week for the rudest of awakenings.

The hacking hits just keep on coming in China. Google  announced that its Chinese search service encountered disruptions for most of Tuesday. The company said service had been restored a day later, but what started out being explained away as a technical issue on Google’s side of the later morphed into another example of direct interference by Chinese authorities with itchy trigger fingers on their “filter” buttons.

Google also on Wednesday pointed out another mysterious cyberattack in Asia, one not directed at it but at Chinese activists protesting a controversial bauxite mining site in Vietnam — a project that’s very important to Beijing and an increasingly sore point for the Vietnamese. Malware was hidden in Vietnamese-language software, according to both Google and McAfee, and the nasty code enabled eavesdropping on activists’ email accounts.

Why did Google help publicize this attack?

“At a larger scale, we feel the international community needs to take cybersecurity seriously to help keep free opinion flowing,” company spokesperson Neel Mehta wrote on the Google Online Security Blog.

Would that larger community also happen to include ? The search competitor to Google was the focus of the third — and scariest — hack to emanate from China.

Journalists and activists working in China couldn’t access their Yahoo email accounts on Tuesday, Reuters reported. Service returned on Wednesday, but many of those hit by the disruptions reported new settings and forwarding directions to unknown accounts.

A spokesperson for an ethnic group that China has accused of fomenting plans for breaking away from the mainland told Reuters that she suspected most of her Yahoo account information was downloaded without her knowledge.

This is what happens when companies that might have the clout to take on the Chinese — like Google has — sit on the sidelines instead of putting competitive issues aside and joining forces. As a result, the environment for Western businesses currently or planning to do business in China threatens to become as toxic as a smoggy summer day in Beijing.
To Compete – or Link Up?

So far Yahoo has issued standard comments about decrying cyberattacks no matter where they originate or for what purposes. It sounds like the same response I received from Yahoo when I reported two weeks ago about Google’s decision to stop censoring search results in China by moving search functions to its Hong Kong-based service. That followed the allegations from Google in January that Gmail accounts had been hacked, and those hacks were based in China.

The decision to stop censoring search results has pushed China and Google into this current high-stakes game of digital brinksmanship. What I wanted to know two weeks ago was this: What other members of the Global Network Initiative — a coalition of tech companies and activist groups formed two years ago to push for greater freedom of expression on the Web — would stand by Google as it stood up to the world’s remaining Communist giant?

Neither Mircosoft nor Yahoo mentioned Google in their responses. Microsoft  sent me a lengthy statement acknowledging that companies will reach their own decisions regarding China based on their own experiences, but that it was determined to change attitudes in Beijing by continuing to engage the government.

Yahoo also said it was committed to protecting users’ rights and freedom of speech, and that it was a cofounding member of the GNI. And that was that. When I pressed for more information about whether or not Yahoo was providing censored and uncensored options for its Chinese customers, company official Dana Langkeek told me that Yahoo had sold its China business to a Chinese company called “Alibaba” in 2005.

“While maintaining a 39 percent investment in Alibaba, we no longer have operational control or day-to-day management over the Yahoo! China business,” Langkeek said.

I’m wondering how a company can commit itself to protect users’ rights when, by its own admission, it doesn’t really have a say over how those users are treated in a specific country. What does a 39 percent investment allow you to say regarding the company that still bears your brand? When it comes down to it, does it really mean you have nothing to lose — and a lot to gain in other international quarters by being a little more vocal about transgressions against that brand?

Yahoo, of all companies, should know that there is a special spotlight tracking its reaction to the latest Chinese dustup. The company felt the wrath of activist and Congressional anger five years ago when it gave up personal information that helped Chinese authorities track down journalist Shi Tao, who had the audacity to provide the Asia Democracy Foundation with details on how the Communist Party planned to handle pro-democracy protestors. Shi Tao is now halfway through a 10-year prison sentence.
Time to Take a Stand?

I’m fully aware of the stakes involved for Western companies opening a window to business with Beijing. 2011 will mark the 10th anniversary of China’s initial admission into the World Trade Organization, which was predicated on continued liberalization of economic and domestic factors in the country. China continues to stoke a formidable economic engine and is even leading the way in certain green technologies — necessity being the mother of invention, after all.

However, Google has seen an opening here for information freedom in the digital age. Granted, its motivation comes from being an injured party — the January hacking allegations — but that has only served to warn the world that China’s cyberthiefs are among the most active on the planet, ranking up there with North Korea’s.

The Great won’t stop at Yahoo, Vietnam or Hong Kong. It has struggled to keep a vast country in line since the days of the Han Dynasty, but China is used to having its way — and denying others their say.

Right about now, it should be dawning on other Western tech companies that they need to ask more questions in their board rooms regarding their business in China, Stratfor analyst Matthew Gertken told me.

When considering those balance sheets, they need to add another couple of columns: economic benefits vs. security consequences.

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