Home Articles The Ultimate Reason Why Foreign Tech Companies Are Banned In China.

The Ultimate Reason Why Foreign Tech Companies Are Banned In China.

If you are reading this, you must by now heard of Facebook and YouTube and similar services being banned in China.

But it might be of surprise as to why these websites are banned. Here are three reasons why there is censorship over foreign tech companies in China.

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CONTROL OVER CITIZENS.

First, China really wants to control what happens with information so that starts with controlling the sources obviously, Wikipedia is banned for the most part. Basically, everything is up there and so are many of the most influential foreign news websites including the Wall Street Journal, The Economist, Bloomberg, Reuters and so on.

TV shows and movies are carefully selected as well as services like Netflix, for example, can’t operate on their own and usually have to license their content to local competitors who can then cherry-pick and modify the shows to tweak them to the liking of the censors.

Only 34 foreign movies a year can make it to Chinese cinemas and they’re usually superhero or cartoon stuff and most of them don’t have historical or political topics, of course, shows and movies that expose the weaknesses of foreign political systems are approved.

Popular blogging platforms like blogger and YouTube where anyone can just write or make videos about whatever they want are also banned too. In other words, foreign sources of information and entertainment are very carefully selected but controlling the sources is of course not enough.

The government also controls how people can access them. Google and other search engines such as DuckDuckGo are completely banned from China as they refuse to censor their search results and while some competitors like Bing are still present, their search results are completely filtered.

Social media and instant messaging apps are increasingly becoming distributors of information and there is basically a complete ban on foreign companies in either of these categories.

That includes all major social media services like Facebook, Instagram, and Twitter. But also, instant messaging services like Messenger, Whatsapp, Viber, Line, telegram, all 500 of Google’s confusing messaging services and even slack add those things up and you end up with Chinese people experiencing a very different world from the rest of us.

News that make it to the headlines everywhere around the world might go unnoticed in China and the same can happen the other way around. However, if you’re wondering why the local news websites and social media portals aren’t doing all the reporting that foreigners are banned from.

Then here’s a fun fact, to use most online services to their full extent, Chinese citizens have to connect their personal ID numbers to their social media, online shopping and other accounts.




Also, any company running a sizeable online business in China must have its data centres in China and must give basically full access to the government and must be prepared to block parts of its content at will. That is, the government can basically and effortlessly see and censor everything people do online in real time.

So here we have our first and fairly obvious reason for censorship. The Chinese Communist Party wants control over its own citizens, the party was never elected so the only reason why people accept them as their government is that most people feel that the party is, for the most part, good for the country and good for themselves.

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And while most Chinese people actually believe this today, it could change at any moment with reports about corruption government, mismanagement or any potential incident that would get people riled up, so voices that are critical of the party are aggressively silenced to preserve the authority of the party.

While most people around the world already knew about this to some extent I’d like to add two more reasons for the censorship because a lot of times services that have no apparent political impact are banned – like Google Maps or Google Drive or Dropbox and even services like uber which weren’t strictly banned but were constantly harassed and discriminated against by the government until they were beaten by the competitor.

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PROTECTIONISM.

The idea here is that China wants to develop its own tech sector instead of letting foreign companies compete in the market. What often happens is that when a new technology emerges somewhere, it enters China with high hopes, local Chinese competitors emergent start providing a similar service and then the government either bans or harasses the foreign company enough for it to leave the market leaving behind only the Chinese competitors.

The Chinese market, unlike most others around the world, is large and competitive enough to ensure that those competitors actually have to be just as fierce as their global competitors so unlike in most other isolated markets, their tech companies don’t actually fall behind even in their isolation.




This type of protectionism is generally believed to be against the rules of our current global trade system including the world’s trade organization which China is a part of, but so far the country has simply gotten away with protecting their own companies against foreign competitors in the tech sector but also demanding free trade access to foreign markets when it suits them. For example, in the case of electronic exports.

MILITARY CONTROL.

The last reason for censorship is one which anyone rarely talks about. The thing is tech companies like Google and Facebook have so much information that they can be used as weapons.

Think about this, most US-based companies know everything their consumers talk about, reads or buy and have access to their passwords and their real-time locations on their smartphones and much more.

Now China and the US on paper aren’t currently at war with each other but there’s a lot of talk about a cyber war going on already and I think nobody could confidently say that the armed conflict can be avoided forever.

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If it can’t, tech companies that know everything about everyone in a country could be pretty dangerous. We have seen with the Snowden leaks that the U.S likes to use its technological dominance to spy even on its own allies so no doubt they would use their leverage against foreign hostile nations too.




CONCLUSION.

Those are the three main reasons. Controlling the flow of information so that the party isn’t challenged, protectionism so that China can build up its own tech sector instead of having to rely on a foreign one and avoiding exposure to foreign tech companies that might be problematic in the case of international conflict. Whether you find those reasons morally justifiable or not, you can’t really deny that they work.

China controls the flow of information incredibly efficiently to the point where most bad things about the Communist Party simply disappear from the Chinese internet.

The Chinese Internet industry is arguably the only one in the world that is anywhere near as competitive as that of the US and China has about as little exposure to foreign tech companies as any developed country can have.

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Here’s the takeaway, I’ve seen so many foreign tech companies go to China with high hopes but I’m afraid I have to disappoint the future entrepreneurs when it comes to its Internet. China doesn’t pretend to care about equal opportunities and fairness, they care about these three things.




If you stand up for your values like Google did or if you are in an industry that they don’t want foreign companies to rule then you are simply out.

 

Mark Zuckerberg and wife.

 

Mark Zuckerberg married a Chinese-American woman, learn Mandarin, joined the board of Tsinghua University and tried to do everything in his power to befriend the Chairman Xi Jinping including offering him to choose a name for his firstborn child, you can’t possibly kiss more ass than that and yet while Facebook’s ad business might have taken roots in China, Facebook.com is still banned.

Let’s say you’re not in one of the overly sensitive industries and you’re willing to compromise then better get ready for compromises in a minefield like having new offices repeatedly rated like Microsoft and uber, like having to license your content to local competitors like Netflix and most mobile game developers, like losing the exclusive rights to your trademark name like Apple .

The minefield is endless because you as a foreign tech company just aren’t supposed to win so even though the Chinese Internet economy is super attractive and super lucrative if things don’t change foreign companies will just never be major players in it.

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