China vs Google, Facebook and other US internet giants: a lesson in internet oversight for the West
Jesse Friedlander says while the US government is playing catch-up with the globally powerful tech companies of Facebook, Google and others, Beijing’s tight grip on cyberspace appears to be paying off
California’s Silicon Valley has long been home to libertarian technologists, who place their faith in the ability of unfettered innovation to solve real human and business problems. Largely free from government regulation, these brainy optimists have developed ideas that have radically changed the way people work, communicate, shop and learn. In the process, they have disrupted – or eliminated – countless companies that relied on traditional approaches to providing goods and services.
Given the compelling value proposition offered by their services, these new-economy companies have developed large and reliable user bases of individuals, businesses, schools and even governments.
On the back of their tremendous success, these companies have grown so large that their power and influence is unassailable, even by the government in some respects. More than just a challenge to traditional businesses, new-economy companies are a major social force, with the power to affect political outcomes, personal careers, and even the general mood of society. Armed with reams of our personal data and sophisticated algorithms, they alone determine what information we consume, the prices we pay for products and if we are even allowed to participate in certain online activities.
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At the moment, there is little consensus in the US on if and how new-economy companies should be regulated. Perhaps counter-intuitively, China may serve as a role model for Western governments as they contemplate oversight of internet companies. Indeed, China was among the first countries to express concern about the potential negative side-effects of the internet.
Technology bends to China’s will in a land where Facebook has no friends or likes
Much to the consternation of Western observers, China has made a series of controversial moves aimed at taming the internet, including: the creation of a “Great Firewall”, which prevents unfettered access to the web; disallowing anonymous postings and other online activity through real-name authentication; monitoring and restricting the content of internet media companies; and, holding direct and indirect stakes in certain technology companies.
Has China’s development hit the Great Firewall?
While derided as draconian by critics who value free self-expression, these measures have undoubtedly helped ensure that the Chinese web remains a safer and more orderly space with less content hostile towards individual public figures and subgroups. While the US struggles with issues of ad hominem attacks and fake news, China has developed arguably the world’s most advanced e-commerce and logistics ecosystem.
From the Chinese perspective, the government’s oversight of cyberspace has helped to create a more healthy and harmonious society, something that is sorely lacking in the US.
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It would appear that most Chinese value social stability more than consumer choice. For the Chinese government, this is at the forefront of their minds as they consider what role, if any, they will allow Silicon Valley’s winners to play in China.
Jesse Friedlander, CFA, is co-founder and chief investment officer of Des Voeux Partners, a multifamily office that manages intergenerational wealth. His areas of interest include macroeconomics, geopolitics, language and culture