The Google Syndrome: China's Corporate Woes
When Google moved to extricate itself from Chinese censorship laws, it set in motion what could easily have passed for a prearranged choreography.
In the opening salvo,
And right on cue, a Chinese official issued a harshly worded rebuke. "Foreign companies operating
in China must
abide by Chinese laws. Google has violated the written promise it
made on entering the Chinese market," the unnamed official said, according to state-run
Meanwhile, the Chinese government, as expected, has begun restricting access to Google.com.hk, the
So far, then, all has gone according to script. What will happen next is far more difficult to predict. Notably, as business relations between
"I think it can be seen as part of a broad deterioration in the business environment in China," says Nicholas Lardy, a senior fellow at the
But will other companies follow Google out the door? "That's the
And even as Chinese officials slam Google, they are taking a conciliatory approach toward the overall theme of the country's corporate climate. "The Google incident is just an individual action taken by a business company, and I can't see its impact on China-U.S. relations unless someone wants to politicize that,"
In the short run, it's unlikely that companies will mimic
Still, even if they are inclined to follow in
Another salient issue is that many U.S. companies that have offices in China are in manufacturing, meaning that they have invested substantially in machinery, warehouses, and other physical assets. "They have a lot more constraints than a technology company like Google," says Lardy.
Overall, then, it appears that most of the immediate fallout from
According to the
At the same time, though, Oberweis says that if Baidu gains a stranglehold on
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