Business At The Price Of Freedom

An anonymous reader writes "The TechZone has an article on how much technology companies setting up shops in China have to kowtow to the Chinese government. All the major search engines have given in to Chinese demands to throttle liberty in exchange for access to the Chinese market and Microsoft has blocked users of its MSN site from using the terms 'freedom,' 'democracy' and other concepts China has designated as dangerous. From the article: 'Most disconcerting are recent reports that Yahoo!'s Hong Kong operation is turning over emails which helped convict a reporter. Journalist Shi Tao was jailed and sentenced to 10 years in prison for "illegally sending state secrets abroad." The secrets that he revealed were information his newspaper received from the state propaganda department about how they could cover the 15th anniversary of the Tiananmen Square massacre. He was identified because he had used Yahoo!'s free email service for which Yahoo! turned over log files to authorities that were later tracked back to his computer.'"

Re:Boycott Yahoo

[Anonymous Coward]

Yen is Japanese currency. You're looking for Yuan.

Your argument would be more effective if you displayed at least some knowledge about the region, rather than the hyperbole that keeps getting fed to you over the boob tube.

There's Freenet and GPG on Free Operating Systems

[c0l0]

...and virtually a million ways to cloak sensitive data from You Personal Government's eyes. It's sad those who could have saved their liberty by using those, often did not do so, obviously :(

Did they really have to comply - maybe not

[ctwxman]

There was an editorial piece in the New York Times which pointed out Yahoo's Hong Kong subsidiary responded to the Chinese government's request. Under the current law, Hong Kong is still autonomous in this regard. That subsidiary was under no more legal control of the Chinese than Yahoo's home office in the United States.

Here's another similar take [theepochtimes.com] from Guo Guoting, an attorney

Lawyer Guo has practiced law in China for over 20 years. He believes that, "Yahoo! Inc. is not under any legal obligation to 'conform to the laws of the countries in which they operate,' as was claimed by Jerry Yang." As a law expert, Guo explained that, "Yahoo! Inc. is obligated to first obey International Law. If the International Law happens to be in conflict with the laws in China or with the CCP's strategies, then the International Law should take precedence, which is an internationally acknowledged principle. China is a signatory of the International Covenant on Economic, Social and Cultural Rights, and of the International Covenant on Human Rights. Shi Tao simply exercised his right to the freedom of expression by sending mail. In addition, he was legitimately practicing his profession, not committing a crime. Consequently, Yahoo! Inc. has no legal obligation to cooperate with the government. The legal entity of Yahoo! Holdings (Hong Kong) is not in China, so it is not obligated to operate within the laws of China or to cooperate with the Chinese police."

Re:Is capitalism soluble in comunism ?

[Red Flayer]

"Sometimes, I wonder if market economy can success in a totalitarian country. It would be a huge blow in face of economist's theories if this is the case."

(1) Communism != totalitarianism. Totalitarianism is a method of administering government, not economy. Here's a question for you: is it possible to have a communist economy with a democratic government?

(2) China does not have a purely communist economy; many reforms have occurred to foster (somewhat) free markets.

By accepted definition, capitalism cannot exist within communism -- they are two faces of a coin. Perhaps the subject of your post should have been, "Can capitalism exist under a totalitarian government?"

Or perhaps, "Can capitalism and communism co-exist in one political system?"

It's worse than you think!

[ImaLamer]

I wonder what the president will do about this.

Nothing, of course. Just like no one did anything when U.S. corporations set up shop in the newly formed Soviet Union. You don't challenge corporations - it doesn't work.

Do we really want our debt financed by China? What type of barganing power does this give them over us while our economy is so fragile?

Our debt financed by China? It's worse than that. Did you know that during that housing boom we just had that the Chinese central banks sunk a lot of the national treasury into the American mortgage market? They sure don't believe in property rights in China, but over here it's another story.

http://www.economist.com/finance/displayStory.cfm? story_id=4221685 [economist.com]

Not only has China played a role in holding down short-term interest rates, but the People's Bank of China has also supported America's mortgage market by buying vast amounts of mortgage-backed securities.

What does the breaking of the yuan's peg to the dollar mean for bond yields? American Treasury yields rose by 12 basis points after Beijing made its announcement last week. Having played a hand in inflating America's housing bubble, could China now prick it by pushing up mortgage rates, which are closely tied to long-term bond yields?

If abandoning its dollar peg causes China to reduce its purchases of T-bonds, then yields will rise. But this depends on several uncertainties. For instance, will last week's revaluation reduce inflows of speculative capital into China, and hence its need to intervene in the foreign-exchange market by buying dollars? A large chunk of China's foreign-exchange intervention over the past year has been to offset not its current-account surplus but inflows of hot money. Some economists believe that, in the short term, the small revaluation will intensify speculation of further revaluations and so attract even more capital inflows, forcing the People's Bank of China to buy more Treasury bonds to stabilise its currency. If so, bond yields will remain low.

On the other hand, the switch from a dollar peg to a currency basket may cause China to diversify its reserves away from dollars. It is unlikely to dump its dollars, but it could well reduce its new purchases of Treasury bonds in favour of other currencies. And, if China really has broken the yuan's link with the dollar, then this could be the trigger for another general slide in the greenback against the euro, the yen and other currencies, prompting investors to demand higher yields. The fate of American house prices could thus be determined by unelected bureaucrats in Beijing rather than the unelected central bankers of the West.

Re:Boycott Yahoo!

[Anonymous Coward]

What is funny here is that why we are all pissed off about this, it is exactly the same sort of thing that would be required by the US gov't. Should reasonable companies in the US be expected to disobey the gov't when Bush's brownshirts demand them to (and the same sorts of thing happened under Clinton's administration -- they just weren't as overt about it).

The thing is, the reporter knew he was breaking the law. Why should a private company have to play underground railroad for someone they didn't even know? The law sucks in China. And the laws on the same subjects are slowly being changed in the US to be the same (i.e., YRO commented a few years back about the fact that it is now law that any public library has to hand over not just computer logs but any books checked out by specific individuals -- without a warrent -- to law enforcement agencies with no reason other than they requested it).

So -- why should Yahoo be held up to a higher standard in China than they would be held to in the US? Quite a bit of hand wringing going on about this in both the liberal media as well as the conservative media both with their own take on it as why their side should be more justified in villifying Yahoo in the process.

Re:Boycott Yahoo!

[falconwolf]

From the comments I've heard people make in the last month, it doesn't matter what a company does in another country - (even if the company is American) - as long as it's legal or is required, demanded, condoned by the government of the country they are doing it in.

Actually in some cases it's corporations that pay or aid and abet military actions against civilians. For instance the group the International Labor Rights Fund (ILRF) sued Exxon [bbc.co.uk] using the Alien Tort Claims Act of 1789 [harvard.edu] for abetting the Indonesian Army when Exxon provided equipment to the army unit involved in murder, torture and sexual abuse of the local population. In another case, Coke sued over death squad claims [bbc.co.uk] in Colombia. There are other cases of US businesses being sued for aiding and abetting for their conduct.

Falcon

Re:Hurting themselves?

[cpu_fusion]

Given that China's trade surplus with the US is a relatively significant percentage of their GDP, wouldn't anything that hurts the US hurt them too?

That's a great question, and it hits at the heart the policy's assumptions.

You have to define who the "them" is that would be hurt by something happening to the U.S. In China, there are two "thems". There are (1) the people in government, the unelected "party". (2) The wealthy businessmen who are outside of government, but certainly connected to it. And (3) "everyone else", from the farmers, the factory workers, to the university students who are not "connected."

Let's say L.A. gets nuked. Suddenly there are a couple hundred thousand less consumers in America. Groups #2 and #3 suffer slightly. Group #1 is going to take whatever it wants anyways, because it is the king, and it is good to be king. Group #2 is going to suffer less than group #3, because the workers aren't calling the shots. They are lucky to have the work. Group #2 will simply pass the buck on the economic downturn on group #3.

But what happens if LA or NYC is nuked by NK or Iran? America will lose its belly for defending Taiwan. Suddenly we know, all to real, what it means to have a city nuked. The Chinese are counting on this. They want us to lose our belly for defending Taiwan, and most likely Japan. You see, group #1 still adheres to ideology: they want Taiwan, and they want revenge on Japan. Once we lose our belly for limited nuclear war (which is what it would be with China), China can do as it damn well pleases.

Now China takes Taiwan, and we waffle. Now groups #1 and #2 win! Group #3, powerless, is going to hurt, because there are now more workers to compete with. Workers who are westernized. Workers like the folks in Hong Kong.

Anyways, I know there are assumptions here in how the US would react to a limited nuclear strike (1 or 2 cities), but to think of China as a single entity which loves American dollars is blind: the government in charge is still very much based on an ideology, and the Chinese capitalists and their wage slaves are still very much their pawns.