A string of events has forced China’s information technology policy onto the U.S. agenda. Yahoo’s assistance when Beijing arrested a democracy advocate, Microsoft’s closure of free-wheeling Chinese Web sites, and Google’s accession to Chinese censorship demands have brought into stark relief the difference in political values between the two countries in a way not seen since Tiananmen Square.
In the absence of White House engagement, the Chinese and the U.S. Congress have moved quickly. In February, while Congress was drafting its Global Online Freedom Act, the Chinese government was issuing highly restrictive e-mail regulations that turn Internet service providers into an arm of the government. They require providers to hold, and if requested, turn over, personal information about users to the authorities. Even more chilling, the regulations require e-mail providers to report to Chinese authorities when an e-mail “upsets social stability,” or “harms the national interest.”
The Congressional bill would require all U.S.-owned search engines and content providers to leave China or risk fines and the threat of prison for employees. The bill would also empower the Department of Justice to block U.S. companies from providing information about Internet users to any foreign official.
Strong leadership from the Bush administration could establish a more practical path. Unlike Congress, the executive branch can negotiate directly with China, allowing for more flexibility. The administration should focus on trade and investment, two areas in which close ties with Beijing provide Washington with significant leverage.
The administration should explore attacking censorship as a barrier to trade. Chinese censorship of foreign-source Internet content has often resembled antitrade tactics. When Chinese surfers have attempted to reach certain foreign sites, censorship software has slowed their access. Chinese users have shifted to faster China-based sites, operated largely by companies that are more willing than their U.S. counterparts to censor.
A restriction on trade here the trade in information puts foreign companies at a disadvantage, which is prohibited by trade agreements. This does not imply that all means of leveraging trade law would be wise. But with so few tools at its disposal, Washington should explore this option.
The administration should also help investors play a more active role in influencing corporate behavior. When IT companies move to list on U.S. stock exchanges, investors should be encouraged to evaluate how these companies American, Chinese or any other nation’s manage transparency and privacy. The administration should have the Securities and Exchange Commission require public companies to disclose how they handle these issues. Investors already assess companies based on environmental and labor practices; transparency, censorship and privacy should be added to the list.
The administration should raise these trade and investment issues not only with China but also in a global context. Broadening the discussion would reduce U.S.-China friction.
When China’s practices so directly compromise values that Americans hold most dear such as freedom of speech and democracy it is easy to respond emotionally, as Congress has done, rather than strategically. But the most effective way for America to support those in China who are advocating reform is not to block U.S. technology companies from doing business there but rather to help them push the boundaries of openness and transparency.