Introduction

The operations of U.S. Internet companies in China are attracting concern in Congress after years of complaints from free speech and human rights advocates about these firms aiding Beijing's ability to censor content. Trade liberalization has sent China's economy booming, making it an attractive—even essential—market for U.S. companies to enter. But China's government has retained tight political controls. China is believed to have the world's most sophisticated network for monitoring and limiting information online. Combined with Beijing's controls on traditional media, this Internet surveillance program has limited domestic debate on issues such as China's human rights record, Tibetan independence, or Taiwan.

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What is the crux of the issue?

Media watchdog groups accuse many major U.S. technology companies of assisting the Chinese censors. Former Secretary of State Condoleezza Rice and current Secretary of State Hillary Clinton have both articulated U.S. commitment and allocated resources (PDF) to promote international internet freedom. The 2006 Congressional hearings (NYT) marked one of the first prominent U.S. airings of the issue after revelations that several Internet companies, including Yahoo, had conformed to restrictions demanded by China. Hearings (PDF) in 2010 echoed the 2006 concerns over the activities of U.S. companies' operations in China and lauded Google's decision to leave the Chinese market as a positive first step.

How does China control its Internet?

Experts say the Chinese government deploys at least twelve agencies to enforce a wide array of Internet regulations directed at service and content providers. The effort includes the policing of cybercafés, as well as government-run computers that constantly monitor for banned content. The government requires Internet service providers to obtain a license from the Ministry of Information Industry and maintain a complete record of customer usage for sixty days, to be surrendered upon government request. In 2005, the government shut down thousands of websites that had not been registered. Authorities institute increasingly invasive controls on visitors to China's 140,000 Internet cafés. Users must present identification to use the computers, and the records are then handed over (Chronicle) to the authorities. In Beijing, patrons must also have their photographs taken (Times).

China's Ministry of Public Security reportedly employs tens of thousands of human monitors to screen Internet content. The ministry has also established a system of online reporting centers that encourage citizens to report "harmful" information ranging from sites displaying pornography to banned political activities. Forbidden items include sites giving information on the Falun Gong spiritual movement or the 1989 Tiananmen Square crackdown. Banned sources include the websites of Radio Free Asia, the BBC's Chinese-language service, YouTube, Facebook, Twitter, and the online public encyclopedia, Wikipedia.

To avoid penalty, websites in China practice self-censorship by blocking out banned keywords (PDF), of which there were between four and five hundred, according to this October 2007 report. A watchdog organization comprising three academic institutions, the OpenNet Initiative (ONI), says China has "one of the largest and most sophisticated filtering systems in the world."

Do U.S. firms assist in this process?

China relied on two U.S. companies--Cisco Systems and Juniper Networks--to help carry out its network upgrade, known as "CN2," in 2004. This upgrade significantly increased China's ability to monitor Internet usage. Cisco also sold several thousand routers (IHT) used to censor web content, and "firm's engineers have helped set it to spot 'subversive' key-words in messages."

Derek Bambauer, a former fellow at the Berkman Center for Internet and Society at Harvard Law School, told CFR.org in 2006 that Cisco equipment provides the backbone of China's Internet support. Cisco has denied charges it adapted its equipment to help Chinese officials police the Internet. Cisco says it will "continually evaluate and address human rights." (Reuters) But in January 2011, U.S. investment firm Boston Common Asset Management sold its stake in Cisco accusing the company of lacking transparency and dodging concerns that its business practices in China might be leading to human rights violations.

Jerry Yang, the former CEO of Yahoo, apologized in 2007 to the relatives of a Chinese journalist Shi Tao for giving Chinese authorities information used to track down and convict the reporter. Shi Tao was subsequently imprisoned for sharing information in 2004 on government restrictions related to the Tiananmen Square anniversary. In a 1998 CSIS report, China expert James Mulvenon notes that subsequent investigations revealed Yahoo's complicity (PDF) with Chinese police in the capture of at least two other Chinese dissidents.

After facing mounting public criticism for its actions, Yahoo issued a press release affirming its commitment to "open access to information and communication on a global basis." In 2010, Yahoo angered Alibaba , a Chinese internet company in which it owns a 40 percent minority stake, by condemning censorship and voicing support (DailyFinance) for Google. In the 2010 congressional hearing, U.S. Rep. Chris Smith (R-NJ) noted that since 2006, Yahoo had established "much stricter policies (PDF) governing its interactions with repressive governments, working to keep personally identifying information out of their hands."

U.S. technology company Google agreed to censor its content in China when it entered the market. Andrew McLaughlin, a former senior policy counsel at Google, told a U.S. congressional human rights group in 2006 that problems with Chinese controls can best be solved through establishing a presence in the country. "In deciding how best to approach the Chinese--or any--market, we must balance our commitments to satisfy the interests of users, expand access to information, and respond to local conditions," McLaughlin said.

At the request of the Chinese government, Microsoft, the world's largest computer firm, in 2005 shut down the site (PDF) of Chinese blogger Zhao Jing (a.k.a. Michael Anti) who had been addressing sensitive political issues on Microsoft's blog service. A year later, Microsoft Chairman Bill Gates told a conference that his company must observe legal requirements in countries where it does business. But Gates added: "The ability to really withhold information no longer exists."

Is there any resistance from U.S. firms?

The notion of "constructive engagement" with China is not shared by all in the U.S. business community. Boston Common Asset Management, along with Reporters Without Borders, an organization working for greater press freedom, initiated a statement late in 2005 calling on Internet businesses to adopt codes to uphold freedom of expression and to be transparent in their dealings.

Google, too, following an attack on its corporate infrastructure, and detecting similar unsuccessful attempts to penetrate the networks (CNN) of twenty companies in December 2009, shut down its site in China. Reportedly, the attacks were made to gain access to the e-mail accounts of Chinese human rights activists. Chinese officials defended its policy and framed the conflict with Google as a "business dispute" (NYT).

Some U.S. officials lauded Google's decision to withdraw from China. U.S. Secretary of State Hillary Clinton in her January 2010 speech on Internet freedom called on Internet companies to refuse to support politically motivated censorship and pledged to reinvigorate the Global Internet Freedom Task Force, a State Department initiative offering technical and financial support for expanding Internet freedom, including in countries with repressive regimes. In Feb 2011, Clinton again acknowledged that businesses continued to be willing to endure restrictive internet policies to gain access to markets like China.

Go Daddy, the world's largest domain registrar, announced in March 2010 that it would no longer issue .CN domain names after Chinese agencies demanded personal information and photographs of Go Daddy's clients. Former U.S. senator Byron Dorgan (D-ND) commended the company's decision as the first to follow Google and partially retreat from the Chinese market.

Is the Internet a major source of information in China?

Even with nearly double the number of connected citizens of the United States, Internet usage has barely penetrated the potential Chinese audience when compared with other industrialized nations. There remains potential for enormous growth as the country's economy continues to expand. Internet usage is also heavily concentrated in urban areas, particularly in Beijing and around Shanghai and Guangdong. Surveys (NYT) have found that most Internet users in China use the web for entertainment. Lihong Huang, an adjunct instructor at Georgetown University's department of East Asian Languages and Cultures, told CFR.org that the majority of Chinese citizens consider the Internet "a source of fun" as opposed to an avenue for political participation. Consequently, Huang says government restrictions are not viewed as harshly from within China as they are by Western observers.

Nevertheless, explosive news stories have been disseminated via Internet when other Chinese media outlets are censored. Mulvenon, now with the Center for Intelligence Research and Analysis, writes that recent years have brought "an increasingly vibrant traditional media and a dynamic Internet news environment" (PDF). The Internet brought the first news of issues such as an AIDS epidemic in Henan province, the poor safety conditions in Chinese mines, and the 2005 poisoning of the Songhua River, which caused a water crisis in the city of Harbin.

Has Congress taken any actions?

A February 2006 hearing (NYT)before the House Subcommittee on Global Human Rights marked one of the most prominent forays into the issue by the U.S. Congress, with testimony from senior representatives of Cisco, Google, Yahoo, and Microsoft. Following the hearing, Representative Chris Smith (R-NJ) introduced the Global Online Freedom Act to "prevent United States businesses from cooperating with repressive governments in transforming the Internet into a tool of censorship and surveillance." The bill was reintroduced in 2009, but was not acted on.

Since 2007, Congress has allocated $50 million in the State Department's Budget for firewall-breaching technology, which provides citizens living under repressive regimes access to blocked content. However, some critics such as former U.S. Senator Sam Brownback (R-KA) argue that none of the funding has actually reached the firewall-busting firms that form the Global Internet Freedom Consortium and are considered the most effective in helping users surmount the firewall.

Are other states controlling the Internet so strenuously?

Many other states limit or even forbid access to the Internet. The ONI says Iran also "continues to expand" its already extensive Internet censorship system, using a sophisticated filtering network to counter the rapid growth of Farsi-language blogs and websites. The International Federation of Journalists reports that most countries in the Middle East and North Africa also jail reporters who criticize their regimes.

Bambauer says China's efforts at censorship are being watched closely by other closed societies. "We think absolutely that China is a model. It's certainly a model for Vietnam, for Central Asian countries like Uzbekistan, especially when you consider that China sells bandwidth to other states, outsourcing censorship."

Are there ways of circumventing Chinese controls?

Among the intended recipients of State Department aid to the Global Internet Freedom Consortium are software programs known as Freegate and Ultrareach, which allow Chinese users to set up proxy servers and circumvent controls for free. Additionally, media reports from China and the statements of dissidents indicate that many things targeted for censorship do get through government filters. Virtual private networks (VPN) or Internet proxies are also relatively accessible within China (Reuters) and allow Internet-savvy citizens to access blocked pages.

In January 2007, a group of global technology firms (including Google, Microsoft, and Yahoo), human rights organizations, and scholars formed the Global Network Initiative, to discuss the establishment of an international code of ethics on issues related to privacy and censorship. It is aimed at developing a set of best practices that private companies should follow in doing business in countries that have repressive governments or censorship regimes. John Palfrey, faculty co- director of Berkman Center, in a CFR meeting on digital openness in closed societies in 2008, said the initiative was "the most promising way to figure out an ethical mode for dealing with this problem in a globalized way." Since then, through GNI, member companies have been working collectively on guidelines (GlobalPost) that require them to use human rights impact assessments and to undergo independent assessment.