The battle is not over. Google Inc.’s closure of its Chinese Web-search site, Google.cn, and relocation of the portal to Hong Kong last month is only a skirmish in the fight between the Internet giant and the government in Beijing.

Some see the move as the first real challenge to Beijing’s mercantilism and a harbinger of a shift in thinking in the business community about the Chinese market. Some see Google’s action as a bold statement on behalf of freedom; for others, it is an attempt to cover a failed business strategy. The truth is more mundane but just as important: Balances are always being struck between principles and profits, and the calibration process is a constant.

Google entered China in 2006, eager to tap the potential of one of the largest and fastest-growing Internet markets in the world. With over 380 million netizens, China was an irresistible temptation, even for a company whose motto — “don’t be evil” — seemed to promise conflict with an authoritarian government that seeks a tight grip on information. Within four years, Google claimed a 35 percent share of China’s search market, a comfortable position but a distant second to the homegrown competitor Baidu.

As part of the agreement to do business in China, Google agreed to censor its searches, though it was able to inform users that content was being blocked at Beijing’s order. Last January, however, after cyber attacks that tried to uncover Google’s source code and targeted the Gmail accounts of human-rights activists, Google announced that the bargain was no longer operative. The company concluded that “the benefits of increased access to information for people in China and a more open Internet outweighed our discomfort in agreeing to censor some results.”

As Hong Kong is a special administrative region and subject to its own legal system, the new portal does not have to censor results. Google’s principles are no longer compromised. For Chinese netizens, however, the new era looks much like the old one: They still cannot access expanded search results as the Great Firewall keeps them from reaching forbidden sites.

Censorship is by no means unique to China. Every government seeks to limit its citizens’ access to some types of information. Restrictions on child pornography are ubiquitous. But there are particular issues that raise concern in individual countries. In Thailand, the king is above criticism; in Turkey, a similar immunity is enjoyed by the nation’s founder, Kemal Ataturk. In Germany, France and Poland, laws prohibit the support or promotion of Nazism. Earlier this year, Google officials were held criminally responsible by an Italian court over the posting on YouTube (which Google owns) of a video of an autistic child being bullied. Overall, Google executives estimate that various of its services have been blocked in 25 of the 100 countries in which it operates.

We are forced to reassess two long-standing bedrock beliefs about cyberspace. First, this is most definitely not a world without borders. The lines on maps can be every bit as real in the digital domain as in the actual world. Physical distance and, increasingly, even language are not barriers to communication, but physical location still matters.

Second, information may want to be free, but governments have other ideas — and the means to enforce them. There are technical workarounds — the Great Firewall of China is by no means impenetrable — but they require skills that are beyond those of the casual user. Usually, governments are satisifed with these imperfect but formidable barriers.

The goal of government intervention in the majority of cases is to shape the thinking of a majority of its citizens. There will always be fringe elements that defy the mainstream, and smart governments concede as much: 100-percent conformity is found only in places like North Korea, which tells officials everything they need to know about total information control.

For companies, at issue is the balance between profit and ethics. How complicit are they willing to be in government efforts to shape the thinking of a nation’s people? The question is especially problematic for Google, whose famous motto suggests a pronounced sensitivity to moral issues.

The lesson is not that Google is hypocritical. While a lofty approach and indifference to laws may be appealing, no company can ignore the legal authority of the jurisdictions in which it operates. On the other hand, the company is not invariably subordinate in this relationship. Its assets — its technology, its human resources and its popularity — afford it leverage in negotiations.

It is interesting that China seems most offended by the light this dispute shines on its censorship procedures, highlighting its role in limiting Chinese citizens’ access to information. Previously, Google was held to blame for the restrictions, even though the company was acting at Beijing’s instruction. The sense of loss among the Chinese public at Google’s departure — flowers were laid at the company’s offices — provides some idea of the sympathy it now enjoys. This sentiment and public understanding of Google’s position are every bit as worrisome for Beijing as the information it seeks to deny its citizens.

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