China’s Internet ‘Wall’ Hits Foreign, Domestic Business

As online regulation tightens, Paul Mozur and Carlos Tejada report on its growing toll on foreign businesses in China. From The Wall Street Journal:

Fredrik Bergman ran into a problem when a client in Sweden tried to transfer files to his firm’s headquarters here: Each time, the firm lost its Web connection for an hour or so.

After several weeks of multiple outages a day, he says, the firm solved the puzzle: the files were named for the Swedish town of Falun, where the client was working. Mr. Bergman says his firm thinks the name triggered the filters China’s online censors use to block discussion of Falun Gong, a religious group long banned in China.

[…] The American Chamber of Commerce in China said last year that nearly three-quarters of about 300 businesses it surveyed said unstable Internet access impedes their efficiency. About 40% said China’s censorship efforts have a negative business impact.

[…] “The real question is whether the next administration is going to continue to roll back Internet availability to foreign firms,” [Shaun] Rein said. He said companies are unlikely to pull out of China in any case, but they likely will think twice about moves like shifting their regional headquarters to Beijing from places like Singapore and Hong Kong. “They will still invest in China,” he said. “It just depends on what scale.”

Though one China-based entrepreneur tells Mozur and Tejada that homegrown web companies have benefited from shelter against international competition, the overall cost of Internet controls on Chinese firms is likely to be even higher. From Andy Yee at openDemocracy:

This censorship regime is hurting China’s competitiveness in the internet age. Very often, it is commercial firms that bear the collateral damages. Online portals are frustrated about the energy and time wasted on outsourced censorship tasks from the propaganda department. Chinese web giant Tencent has to work hard to deal with censorship concerns connected with its globally popular chat app WeChat among international users, who are accustomed to sharing information freely. Chinese telecom giants Huawei and ZTE, flagged by the US Congress as security threats on flimsy evidence, are victims of China’s perceived opacity. And investor uncertainty about censorship and over-regulation mean that market performance of Chinese internet companies will never achieve their potential.

More importantly, to the extent that web technologies become essential platforms for learning, collaboration and innovation, China runs serious risks of underachieving its information technology ambitions. Chinese talents are robbed of learning possibilities simply because many foreign websites and tools are blocked. According to a UNESCO report, some open educational resources are out of reach for students and educators in China because they are filtered by the Great Firewall.