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News Release

Last modified: Thursday, January 21, 2010

Indiana University expert available to discuss ongoing impact of Google/China dispute

FOR IMMEDIATE RELEASE
Jan. 21, 2010

BLOOMINGTON, Ind. -- International discussion and diplomacy continues in light of Google's announcement last week that it may pull out of China over concerns about censorship and security. Today (Jan. 21), a top Chinese official announced that the threat should not affect China's relations with the United States.

Scott Kennedy, director of the Research Center on Chinese Politics and Business at Indiana University and an associate professor of political science and East Asian languages and cultures, is available for comment.

Kennedy said that Google's announcement that it may end its China operations resulted from the the accumulation of problems: restrictions on its Chinese-language search engine, www.google.cn; government policies that gave some advantages to its local competitors, especially www.baidu.com; and the cyber attacks on some of its email accounts and its own infrastructure.

"Google is likely profitable in China, but its China revenues account for a very small portion of its overall business and profits. In the short term, Google's withdrawal will not have much effect on its bottom line, and the extent to which it may be perceived more favorably by customers in the U.S. and Europe because of this bold act, its overall business in the near term may in fact improve," Kennedy said.

Over the long term, Google's chances in China will require a more open policy toward Internet and information regulation.

"Although that seems unlikely in the current climate, things could change. Google's stance may affect the behavior of others and rather than Google being shut out of China, the Chinese may increasingly find themselves shut off from leading technologies and information, which would yield complaints from some parts of the Chinese business world and Internet users," he said.

"This may prompt a reappraisal within the Chinese government, at which point Google may be able to re-enter the China game in a better position. One should not expect such a turn of events to happen quickly, and it also depends on Google's business elsewhere going very well, which gives it potential leverage others could never conceive of having."

Kennedy, author of the book The Business of Lobbying in China (Harvard University Press), can be reached at 812-856-0105 (office), 812-360-6598 (mobile) and kennedys@indiana.edu.

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