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Google Dispute Highlights Limits of Internet Companies to Change China

Earlier this year, Google's decision to stop censoring search results on its website for Chinese authorities created a tense standoff with Beijing that might be drawing to a close as China weighs the renewal of the U.S.-based Internet company's business license. U.S. lawmakers and Internet experts say Google's struggle highlights the inability of high-technology firms to promote change in China.

Representative Christopher Smith praised Google during a legislative commission on Wednesday for daring to stand up to Beijing. Smith called the company's decision to stop censoring itself on its website remarkable and thrilling.

But the Republican lawmaker from New Jersey said he feared that China would eventually push the Internet company out of its market. "Google's difficulties in China make it clearer than ever that however well-intentioned, American IT [i.e., information technology] companies are not powerful enough to stand up to repressive governments, especially the Chinese government," he said.

Smith told the U.S.-China Economic and Security Review Commission that China's tools for surveillance and repression were growing increasingly sophisticated. He also voiced concern that freedom of expression was in retreat in China, noting that the monitoring group Reporters Without Borders states that 72 people are imprisoned in China for Internet postings.

Rebecca MacKinnon, an expert on the Internet in China at Princeton University, said Beijing's increasing control of the medium is the result of what she calls "networked authoritarianism."

MacKinnon noted that all Internet and communications technology companies in China are vital components of China's system of control. "In this way, much of the censorship and surveillance work is delegated and outsourced to the private sector, who if they fail to monitor and censor their users to the government's satisfaction, will loose their business license and be forced to shut down," she said.

MacKinnon and Smith said this raises concerns about the role that U.S. companies and their investors play in helping Chinese authorities deny their people freedom of expression.

They pointed to Baidu, the largest Chinese search engine and Google's main competitor in China, as an example of how U.S. investors can become involved in Beijing's efforts to control society. MacKinnon noted that two of Baidu's five directors are American and that U.S. investors provided much of the company's startup capital.

Baidu has been publicly traded on the NASDAQ stock market since 2005.

According to Christopher Smith, these are details that investors need to know. "Both those who own the stock and those who are on the board need to realize they are aiding an abetting a dictatorship that is so unbelievably lethal to its own people," he said.

Baidu won China's Internet self-discipline award last year for fostering what authorities called a harmonious and healthy development of the Internet.

Officials from Baidu were invited to attend the hearing, but commission members said they declined to appear.

Representative Smith has proposed legislation that would give high-tech companies what he says is much needed support to help them stand up to repressive governments.

The bill, the Global Online Freedom Act, calls for the creation of a worldwide Internet office in the State Department that would rank countries' Internet restrictions. It would also require U.S. companies to report to the State Department any requests by foreign governments for filtering.

According to industry estimates, Baidu's share of the Internet search engine market in China has jumped from about 58 percent late last year to 64 percent during the first quarter of this year. During the same period, Google's share of the Chinese market slipped from more than 35 percent to 31 percent.