Critique lands Kai-Fu Lee in trouble

Chinese Internet icon Kai-Fu Lee's penchant for controversy is once again splashing into the headlines, this time with word that the former Google (Nasdaq: GOOG) China executive has gotten himself in trouble for criticising the foundering online search engine of a major state-owned newspaper. This latest brouhaha highlights the risk that people who do business in China face when they speak too candidly in public forums about major official organisations like the People's Daily, the official newspaper of the Communist Party.

Lee says that he was blocked for three days from posting to his microblogging account on Sina (Nasdaq: SINA) Weibo, often called the Twitter of China, after criticising the People's Daily's struggling Jike search engine. I wrote briefly about Jike earlier this week, after media reported the search engine planned to lay off up to 500 employees, or 5-10 per cent of its workforce due to its poor performance. 

In that case, I said the poor performance didn't surprise me too much since big state-owned media companies with close ties to the Communist Party had a poor track record for launching successful commercial ventures. But it's one thing when a small potato like me makes some low-profile criticism of a major Party-affiliated organisation, and quite another thing when sharper criticism comes from someone like Lee, whose Weibo account has millions of followers.

According to a media report, Lee made his controversial post on February 17, when he criticised Jike and its director, former ping pong champion Deng Yaping, for excessive spending of taxpayer money on a site that has yet to earn any profit and has miniscule market share. Lee says he was subsequently blocked from making new posts on his Weibo account. Lee is certainly no stranger to controversy in China's Internet world, and last year was in the spotlight for several weeks when he launched a war of words against US short sellers that were making big money by attacking publicly listed Chinese tech firms. 

One interesting element in all this is who exactly made the decision to block Lee, who previously worked for Microsoft (Nasdaq: MSFT) and headed Google's China operations before setting up his own firm Innovation Works, which incubates technology companies. Weibo owner Sina is a privately owned, US-listed company that often makes its own self-censorship decisions, so it's quite possible that Sina employees took the initiative to block Lee's account to avoid confrontation with propaganda ministry officials. But it's also possible that propaganda officials saw or heard about Lee's controversial posts and directly called up Sina and ordered the company to block his account as punishment.

Either way, the result is the same: the outspoken Lee was prevented from posting to his Weibo account for several days. On a broader basis, Lee's punishment does seem relatively minor since the government could have taken much stronger action against Innovation Works itself. But the case does illustrate that people who do business in China can often find themselves and their companies in trouble due to their outspokenness, especially when it comes in big public forums and involves sensitive matters or organisations.

Bottom line: Blockage of Kai-Fu Lee 's Weibo account after his criticism of the People's Daily's search engine highlights the risk of making controversial remarks on sensitive topics in China.

To read more commentaries from Doug Young, visit youngchinabiz.com