One World, Two Universes

The arrival of the internet in the 1990s was greeted with great euphoria by those who saw it as the harbinger of a unified world of free-flowing information. However, criminal activities such as cyber hacking and online fraud badly dented such lofty hopes. Now Hillary Clinton has laid it out baldly: we have returned to an era of two worlds divided by a (virtual) wall of censorship. Invoking Winston Churchill’s 1946 speech recognising the start of the Cold War, she said, “a new information curtain is descending across much of the world”. Unlike Churchill, however, she stopped short of naming the power behind the curtain, but left no doubt about who she had in mind. Shrill protest from Beijing helped to fill in the blank.

What has happened? Certainly, Chinese censorship of the Internet is nothing new: the phrase ‘Great Firewall of China’ is already part of the English vocabulary. However, devoting a major speech to criticise China for violating human rights by blocking free expression and censoring the Internet was a dramatic shift in policy. Only a year earlier, on her first visit to China, Clinton had put human rights on the back burner. “Our pressing on those [human rights] issues,” she said, “can’t interfere on the global economic crisis, the global climate change crisis and the security crisis.” Now China is warning that her accusation could harm their relations.

Google’s troubles with China, the hacking of dissidents’ and journalists’ email addresses and suspected cyber-attacks on Google servers by hackers from China cannot alone account for the shift. The massive December cyber-attack on Google and 32 other US multinationals were undoubtedly serious. Experts fear that hackers could have inserted malicious code that could make those computers quietly relay information to the attackers. But given the multiple layers of concealment used by the attackers, confirming their exact location is all but impossible. More likely, Google’s experience and its willingness to go public (other victims have urged the US government not to reveal their identities) have brought to a head growing unhappiness with China across a range of issues over the past several months. And it is not just the US that is losing patience.

The public tussle with Google has thrown a spotlight on the growing adversarial relations between China and the western world that had lain hidden as the world courted Beijing to help resolve the financial crisis. China’s massive stimulus plan was praised as helping to revive the world economy. But now it seems the massive investment in state-run enterprises has created an over-capacity which threatens to flood the market and increase the imbalance. While China’s foreign reserves have topped $2 trillion, its artificially low currency and ever-growing surplus has become increasingly intolerable as the US and Europe are reeling from high unemployment and recession. Even the normally cautious India has surprised Beijing by making an official demarche over its lack of market access. It is against this backdrop of general discontent that official leaks in Washington reveal that cyber attacks from China — by both individual hackers and possibly government agencies — have dramatically escalated in the past year. Questions are being raised not just about national security, but also about commercial espionage.

Western corporations that flocked to China and have been major contributors to its success too are increasingly frustrated. In a recent column, James McGregor, a veteran China-based business consultant, summed up their reasons: “Inconsistent and non-transparent enforcement of regulations, rampant intellectual-property theft, state penetration of multinationals through union and Communist Party organisations, blatant market impediments through rigged product standards and testing, politicised courts and agencies that almost always favour local companies, creative and selective enforcement of WTO requirements... The list goes on.” Many are worried that their Chinese joint venture partners will steal their technology to mount low-cost competition.

It has become clear that Chinese behaviour vis-à-vis foreign business, its suppression of domestic critics and its control of the media and the Internet are parts of the same policy to create a different universe — one in which Beijing makes the rules and others fall in line. Clinton’s speech on the Internet freedom may be just the first shot to remind China that the rest of the world would not accept such an exclusionary universe.