As economies expand and countries engage in different businesses, it is important to have measures that promote the relationship between them in a way to make international trade successful. Different countries usually create rules and regulations that keep themselves in a better position than others when it comes to internal marketing. However, it is vital to encourage foreign investment, mainly when it is beneficial to the host country. The case of censorship in China is a perfect example of restrictions that can hinder smooth relationships between two nations, hence making the businesses suffer. As analysed herein, the motivation behind it varies, but the visible effects are far-reaching.
The Chinese government has intensified the steps of monitoring of foreign companies and information flow. The United States has been the priority in the monitoring of its activities, and information flow (Yang & Hornby, 2018). Apparently, the various restrictions not only hinder access to the data that the companies require but also act as a barrier to media outlets that flourish in studying countries’ behaviours in the world with China being a crucial point of concern. The political monopoly by the government of China intensifying the restrictions on trade has significantly cost the United States’ economy billions of dollars annually (Makinen, 2015).
The United States perceives the Internet censorship as a trade barrier. Reason being, for the first time in five years, it is experiencing online restrictions that significantly reduce the capability of U.S. business companies. The recent Clampdown on the use of VPNs (Virtual Private Networks that allowed US companies to access the banned websites in China) has risked the businesses which had depended on these sites, like data security and cloud service (Bloomberg News, 2017). Regarding that, the inaccessibility of China’s Internet market and the fact that the Chinese companies can access the U.S. websites creates a double standard scenario that needs critical evaluation.
Google, one of the most used and depending search engines for businesses and individuals, got banned in China (Thompson, 2006). However, after Xi Jinping became president, the already existing restrictions intensified despite the fact that it was an apparent trade impediment. With increased blockage of critical online data, the companies could not get access to vital information that can help in decision making. Furthermore, essential services such as email and ordinary searches become limited; the situation in China is different from what Google provides in other countries. Indeed, there was an outcry before Jinping took charge, but the situation is worsening over time.
The Great Firewall is Limiting Opportunities for Foreign Suppliers
With the continued blockage, the weight of the global sites with high traffic such as Google continues to decline which in a way limits business people and companies from acquiring the essential information about the market’s performance in China. The foreign suppliers’ group is considered as the most advantaged group with the blocking of Google site (Carsten & Martina, 2016). Just as in the case of hurting the internet sites and users who depend on online metrics to capitalise on opportunities, foreign suppliers continue to access a limited market since they do not have sufficient knowledge to make reasonable business decisions.
Future Trade Scenario for the US-China
An apparent case about the current scenario is that things will turn worse going into the future. At present, China is very committed to strengthening its censorship while, on the other hand, foreign countries with the U.S. at the forefront continue to push for appropriate reforms through the World Trade Organization (WTO) for better access to the markets like it has been doing it from its inception (The United Nations, 2008). In effect, it is likely that it will continue to affect the present ties, interfere with elements concerning human rights as well as making the traders more cautious. With comfort declining, the courage to take risks diminishes, which as well affect business patterns.
The Aim of Censorship
As time advances, many people, organisations, and countries continue to explore this issue. With China blocking essential sites such as Facebook, Google, and Twitter, it is clear that it does not appreciate doing business with the United States. These sites are essential not only for their own business’ sake, but also for other US businesses, as it provides diverse information and marketing platforms. The US companies operating in China need Google Search Engine for information and Social platforms like Twitter, and Facebook to reach out and market to diverse markets. The fact is that the content that the country blocks are still present in Chinese websites. Therefore, the banning is no doubt a case to do with a hidden agenda that doesn’t embrace the need for bilateral trade or other types of relationships that improve the strengths of nations as they relate. The hidden agenda is to avoid any possibility of subversion of the authority of its government by keeping tight reins on the media. China is ranked as the last ranked country on the Freedom House ranking in which 65 countries were ranked. It shows how much freedom Chinese government allows to the information mediums (Albert, 2017).
However, the primary motivation behind China acting this way is protectionism. The country’s double standard behaviour is because they want to limit U.S. influence, hence making it hard for them to do business and access the correct information about business position and climate (Mozur, 2018). With protectionism, China could be in a better place to preserve its interests and its commitment was evident with how it went even to the extent of manipulating the “Great Firewall.” Through this intervention, the U.S. URL’s belonging to the dominant search engines had to redirect to China’s leading platform, Baidu (Lorentzen, 2014).
As a result, the U.S. could only access the market information that China wanted hence the labelling of the move as a trade barrier by the U.S. authority. In a way to illustrate how the matter is profoundly impacting, one of the critical requirements for business success is a free market. Thus, even if there are rules and regulations, they will not favour one side while disadvantaging the other. Also, access to information is necessary since it helps in strategising. With censorship, unfortunately, it is not possible to accomplish any reasonable objectives since the U.S. cannot adequately study the critical business, social, and political situation in China.
The Effect of Censorship on E-Commerce
A critical area hit by censorship is any Internet-related commerce. In fact, it is one of the vital areas that show the real economic threat of restriction since it is bringing an unfavourable condition that restricts the growth of e-commerce. For instance, the situation is worse for the companies dealing with online communication. Others highly disadvantaged include the ones that deal with information exchange and digital marketing. Since the U.S. is home to the world leading companies and China is a vital target due to its increasing population, censorship will only derail the expected growth that comes along with tapping such opportunities.
In fact, inhibiting free flow that enhances business success is the main issue with censorship. Regular, adequate, and accurate information on global business performance helps countries to plan for their international businesses. However, blocks through censorships limit a market’s ability to evaluate the market. It is a factor that also creates a more silent media which eventually fails to give crucial information such as the market tension in China (Lorentzen, 2014).
Everything that is taking place is intended to give China an improved position in matters concerning cybercrime, international identity, and the ability to deal with barriers. Therefore, it is trying to capitalize on any opportunity that emerges to establish its influence. As a result, China uses the advantage it has to force the foreign nations to accept its economic and political conditions so that it can get access (King et al., 2013).
With the issue of censorship proving a significant problem to U.S. business, it is crucial for the government to initiate ways on how it can improve access through negotiations with other governments (Lester & Zhu, 2017). The main reason for going that way is the fact that despite the problems they face, companies do not have adequate power to solve their international issues. As a case example that justifies this need, China can currently access the U.S. markets without any restriction. On the other hand, the U.S. internet industry doesn’t have equal access to the Chinese market and considering that it has more internet users than the overall U.S. population, it is necessary to look for a solution in all possible ways.
Effects on Companies’ Reputation
The case of Apple’s business condition in China is a perfect illustration of how companies give out their rights to Chinese authorities after accepting going their way. As the company continues to sell their latest iPhone, a large proportion of personal data will be under the Chinese authorities. Through its partner business with Guizhou-Cloud Big Data (GCBD), Apple has come up with new terms such that GCBD can access all the information that someone stores on their devices while in China. Although it is a joint agreement between Apple and GCBD, the fact that a person’s data is accessible to the Chinese authority is something that requires critical analysis.
In short, whatever is happening to Apple is what other companies are obliged to observe so that they can get access to the Chinese market. However, as in the case of Apple, their right to share and access information is not exclusive to the U.S. organisations since the Chinese partners or the authorities will access any data stored in the company’s services. In most cases, Chinese authorities acquire the right even to share information, exchange with interested parties, and disclosing it, although it can only take place under the applicable law (Guancheng, 2018).
As a reminder, among the many commitments that Apple had been ensuring that GCBD does not have any access to any data stored under Apple’s facility. Therefore, it was to get permission from the company, but the new developments in China indicate that is no longer the case. Reason being, the authorities can access readily access the U.S. companies’ data without their consent. As a result, it will always appear like the companies are exclusively Chinese, but that is not the case. Moreover, information regarding U.S. companies’ inner patterns, cultural values become more accessible to the unintended locations; this is against the people’s expectations.
The Risk of Losing Data Privacy
The United States perceives China as a dictatorial regime. Therefore, any agreement that exists between an American company and a Chinese company will only present a scenario where the country is selling its rights of protecting the values that it regards. Among the leading commitments that companies from the U.S. try to promote is the protection of their people’s privacy. Thus, getting into a scenario where it escapes from its duty to promote privacy will only question their commitment to it; this, in turn, damages the companies’ reputation (Guancheng, 2018).
As a result, it is evident that censorship can impact directly or indirectly. In the first case, the move limits a country’s access to others’ important information concerning market scenarios, recent developments, and dynamics among other factors. This way, it lacks the essential information that can help in planning and strategies in a way to enhance its success in the international market. On the other hand, the companies interested in trade with China have to imply with the Chinese regulations (Connor, 2016). As a result, there is close monitoring of its data which as well limits its performance to the way the local forces require as opposed to the goals and objectives of the company.
The United States companies are concerned about their information and data privacy as the Chinese authorities need them to give access to all the private data as well (Wiu, 2018). Interestingly, China is among the leading countries where cybercrime is at a critical level. It is important to note that cybercrime is among the most critical factors that an investor considers in the international market. In this regard, the various issues concerning cybercrime and cyber-security require reflection on an international dimension since their prevalence in a country proves there is a problem when doing business in such a place. Accordingly, some areas initiate mechanisms which in a way can address the issue.
Censorship looks like having the collective aim of stopping better trade relations. The various cyber-related attacks emanating from the present day’s China as a way to enhance its protectionism goal is a significant setback to U.S. investors. It discourages foreign firms, especially the ones dealing with the Internet to operate in the country (Kshetri, 2013). For instance, it was the primary problem behind Google’s exit, and it is likely that more firms will continue to be unable to operate in the country.
In a place where cybercrime is at high levels, the risk-taking ability that companies may have towards investment significantly declines. From 2002, accusations of China as a centre of cyber-crime have continued to increase in numbers as well as the nature of the vivid problems. With censorship acting as a way to ensure an international company conforms to the local settings as far as internet connection and e-commerce are concerned, there is more vulnerability to the associated risks which can only scare the companies away.
Censorship makes the Chinese market appear riskier since the international companies from the United States lack adequate control of Internet-related risks. In connection, a market-based cybercrime such as in China promotes the illegal production of goods or services particularly the ones that trade online. In the same way, there is the export of the various technologies that encourage cybercrime and the necessary equipment to support the groups that deal in such trade (Kshetri, 2013). In such a case, it becomes somewhat harder to control predatory cyber-crimes. With censorship increasing the vulnerability of companies to Chinese control, it becomes clear why many withdraw their business operations as well as why some are yet to show any interest.
Importantly, one should always consider that the locus of the current operation in China is emanating from people’s growing concern for power and control (King et al., 2013). Regarding that, it is not a scenario where the problem starts with government influencing the behaviour of the masses, but people trying to regroup and ensure they have more control than the rest. Currently, most of the businesses in the world are going electronic, and it is very reasonable if a country comes with interventions that give it an edge compared to other competitors.
Censorship Aims to Discourage Foreign Dependency
One of the primary motivations behind China’s current behaviour is the motivation to establish an elevated position for itself to the extent that it will not require looking outside. As in the case of the country’s situation with the film industry, infiltration of the leading economic aspects can make a state to search for outbound strategies that may fail to work at times (Zhang, 2017). In this respect, coming up with a way to give a competitive edge might be a chief motivator since as it happens in the international market, dominance is a critical factor. The only problem is the way one country will practice it since it requires not disadvantaging the other.
The Effect of Free Trade Restrictions on China
The primary motivation behind China’s censorship is clear. Firstly, the world’s economic pattern continues to assume different shapes as time advances. With such developments, it is difficult to determine future trends hence the need to be highly vigilant, especially when other better performing or equally strong country tries to establish a market position. Protectionism has led China to get all the advantages of the free trade while protecting its resources and liberties from being exploited by foreign businesses with its “China First” slogan (Financial Times, 2018). Secondly, the fact that the WHO regulations have left an opportunity for the violation, which its scope is undefined, is a significant setback since countries can come up with ridiculous rules to disadvantage others.
Nonetheless, even if the objectives are evident, various features symbolise China’s failure. Firstly, in as much the rules are there, it was apparent that the application is a double standard. Reason being, the country allows access to the sites it hinders access from the U.S companies. As a result, the issue appears more political as opposed to a scenario of promoting business and social values while avoiding exploitation.
The Response of US to China Restrictions on Free Trade
For instance, one of the ways the U.S. can respond to these issues is to make public what is happening to its companies in China. For example, raising genuine concerns to organisations such as the World Trade Organization can be quite helpful since it can help in initiating inquiries that can form a foundation of fact-finding. From such developments, there will emerge new reports that can compel China to act favourably to other companies in its market or face the same treatment when doing businesses outside its local market.
The WTO is one of the mediums through which pressure on China can be exerted to make him recognise the freedom of free speech of its citizens, businesses, and of foreign businesses operating within China (The Guardian, 2018). This way, China would reduce its efforts or in a way have to document why it does something that keeps another nation at a disadvantage. As a result, there will be more information to Chinese citizens. More so, bearing in mind that access to information is what hinders success in these markets, there is no doubt that there will be increased opportunities for U.S. companies.
Conclusion
In the end, it is concluded that different articles address the issue of censorship in different ways; the impacts tend to concentrate on several areas that need assessment in the future. Firstly, e-commerce will fall since the companies that deal with telecommunication and related activities must overcome the current imposed problems. Secondly, the impacts are visible through damaged reputation. Like in the case of Apple, the companies that comply with the rules in China lose customers’ trust since the locals perceive those companies as ones unable to protect their customers’ privacy. In summation, the U.S. attempt to re-establish its position as far as its trade with China is still at a critical level. Nonetheless, with various measures (like negotiating with China directly, using the WTO for restricting China for its challenging economic environment) emerging day by day to address the issue reasonably, there will be a practical solution that will help to restore the previous and useful business links. It is evident because of the changing world economic environment, where companies are targeting their focus on the prospects of entering the Chinese market. The Chinese government aims for censorship and monitoring of information flow is more related to political aims than economic protectionism.
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