Open Information and China

"China has become a dead-zone for any business planning on building an international online presence."

This is one of the two things (the other being pollution and lack of life) that I could not stand living in China.

From a great blog post at Chinasolved.com. So good, I'm posting the whole thing:

China’s Fractured Web Part III – Myths and Realities

At the time of this writing, Facebook, Twitter and YouTube are still unavailable in Mainland China. YouTube has been blocked since March of 2009, and Facebook and Twitter have been dark for almost a month. There is no indication about when - or even if - the blockade of these sites will be lifted.

First, let’s put a couple of myths to rest.

Fractured Web Myth 1 – the Chinese internet blockade is a minor inconvenience that just about everyone can get around.
Fractured Web Myth 2 – the only ones affected are kids surfing for fun.
Fractured Web Myth 3 – it’s a temporary phenomenon
Fractured Web Myth 4 – it’s about national security - not an international business or trade issue.
Fractured Web Myth 5 – Chinese counterparts and substitutes already exist.

Myth 1 – It’s just a minor inconvenience that just about anyone can get around. Simply not true. There was a time when proxy servers were simple, effective and free ways to get around the Chinese internet blockade, but China’s technology has gotten better and better. Even some commercial VPNs (virtual private networks) that charge for access are being blocked now. The cost of going online in China wasn’t cheap to begin with, but going online in China is now becoming more expensive, slow and difficult. Another problem with VPNs is that they often require software to be downloaded – making online life even more difficult for those of you who have more than one computer. A handful of digiratti will take the time, trouble and expense to get around the blockade – the vast majority of Chinese netizens won’t bother.

Myth 2 – These social media sites are all just kid’s stuff. True, 90% of the bandwidth used by Twitter, Facebook and YouTube seems to be devoted to college-boy pranks and sophomoric banality - but that is rapidly changing. Twitter is being used as a news feed, marketing platform and communications-tool by serious, grown-up businesses. Facebook is emerging as one the best ways to build and maintain an online professional or customer groups – and a great advertising platform. YouTube videos, embedded in private sites, puts professional quality broadcasting within the grasp of small & medium sized businesses everywhere. The impact of China’s blockade is relatively minor for now, but business applications for the Google, Twitter, Facebook and YouTube are growing fast. Businesses interested in marketing to or from China are going to find themselves at an increasingly significant disadvantage.

Myth 3 – It’s temporary. YouTube has been blocked since March 2009, and Facebook & Twitter have been down for over a month. In the 24-7 world on online commerce, that level of service interruption is total. YouTube may come back someday (or it may not), but no IT or Marketing department will ever again be able to rely on the platform in China. The same goes for Twitter and Facebook. Even Google has been restricted and hobbled to the point where it is not a 100% reliable business tool in China. For business owners the bad news is already in the market and they are responsible for finding a way around it. No one can claim ignorance about a risk that has already been demonstrated.

Myth 4 – It’s not a business issue. The 20th century benchmarks for international trade were how many containers or freighters one nation sent across the water to another. In the 21st century, it will be about data, viewers and users. The few big sites that have been blocked and hobbled in China are powering thousands of small businesses and driving the future of online commerce. China has become a dead-zone for any business planning on building an international online presence.

Myth 5 – Chinese replacements already exist. Sites like Tudou, Youku, Xiaonei, Kaixin, Baidu and a host of others already replicate the functionality of the blockaded sites – so it’s easy to say that the problem has already been essentially solved by the marketplace. Indeed, if it were possible to link Twitter and Xiaonei or Facebook and Kaixin, this argument would be valid – and represent an exciting opportunity. But the fact that the two internets are developing in isolation and segregation from one another creates diseconomies of scale. Companies wishing to bring their online presence to China will have to duplicate budgets and content – and overcome substantial hurdles as far as quality control and due diligence. Multiple platforms that cannot integrate with one another raise the hurdle rate for business and makes marketing to or from China so expensive and risky that it is now beyond the reach of most small business.