Libertarians and High-Tech “Engagement” in China

In the Hutong
Getting ready for my trek to Starbucks
1036 hrs

I continue to be frustrated by the rodent-level rhetoric employed by the mainstream political parties in the US vis-a-vis allowing US Internet and technology companies to continue to do business in China. Despite the merits of bipartisanship, most of our elected and campaigning officials tend to ignore the reality those of us who have actually LIVED in China for a while understand instintively: US technology companies operating in China are mostly good for the Chinese people.

I’m not going to go deep into why, but if you want a far better expression of both sides of the discussion, check out this debate between two of the brains at Libertarian think-tank Cato Institute.

It underscores a key point: there are degrees of collaboration. There is a difference between complying with an objectionable law to the minimum extent possible, and doing everything you possibly can under the law to attempt to prove yourself “redder than red” in order to ingratiate your company with Chinese officials.

In reality, I think it is crossing that invisible but tangible line that concerns most of the sensible people who are concerned about the issue.

What is upsetting the blogosphere about the recent ruling in favor of Yahoo! Hong Kong, for example, is that there appears to be a perception that somewhere, somehow, Yahoo! crossed that line in China.

At some point, companies like Alibaba/Yahoo!, Google, and MSN (and possibly Cisco) are going to be called upon to prove that they live on the “doing the least possible” in terms of compliance to objectionable laws, and are indeed doing the most possible to improve things in the PRC.

And this time, it will certainly go beyond those four companies. By applying to build a semiconductor fabrication facility (“fab”) in Dalian, Intel and its activities in China – including its involvement with iCafes – will come under unprecedented scrutiny. That list will certainly grow, and I will guarantee it will reach the door of those companies who are financing China’s technology and Internet industries.

Today, Silicon Valley. Tomorrow Sand Hill Road and Wall Street.

Be ready, guys.