With over 1.3 billion people, the Chinese consumer market is a tempting target for Western technology companies. Of course, it’s also a risky place to do business. The recent news that Google is considering a re-entry into China further highlights a troubling balancing act faced by technology companies looking to do business there. The company last entered China in 2006 with a censored search engine, but pulled the plug on the operation four years later after it discovered that human-rights activists’ Gmail accounts had been hacked. While the economic opportunity in re-entering China could be massive for the firm, there are very real dangers for Google or any internet firm in underestimating the threat posed by Chinese meddling.
The Tightrope Google Has to Walk in China
Chinese consumer market is a tempting target for technology companies. Of course, it’s also a risky place to do business. The recent news that Google is considering a re-entry into China further highlights a troubling balancing act that technology companies looking to do business there have to engage in. There are very real dangers for Google or any internet firm in underestimating the threat that Chinese meddling poses. These include intellectual property theft, escalating government demands, regulatory creep and the risk of alienating employees. Internet companies need to think carefully about the business costs of conceding to Chinese regulation. In addition to the threat to their reputations, there are material risks that are equally dangerous.