CS6223--C O N F I D E N T I A L SECTION 01 OF 03 BEIJING 001336

C O N F I D E N T I A L SECTION 01 OF 03 BEIJING 001336

SIPDIS

State for EAP/CM - SFlatt, PPark, AGoodman
State for EEB/CIP - FSaeed, SFlynn
USTR for AWinter, JMcHale, AMain, TWineland
Commerce for MAC
Commerce for ITA - IKasoff, JWu

EO 12958 XXXXXXXXXXXXX
TAGS ETRD, PGOV, SOCI, SCUL, ECON, CH
SUBJECT: XXXXXXXXXXXXX
Ref: Beijing XXXXXXXXXXXXX

Classified By: Economic Minister Counselor Robert Luke. Reasons 1.4 (b) and (d).

Summary
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¶1. (C) CDA spoke by phone with XXXXXXXXXXXXX to discuss recent pressure by the Chinese government to censor the company’s Chinese website, accelerated perhaps by the approach of significant political anniversaries.XXXXXXXXXXXXX averred that the root of the problem was China’s Politburo Standing Committee member XXXXXXXXXXXXX who wants the company to remove a link to the uncensored google.com site from its sanitized Chinese version, google.cn. XXXXXXXXXXXXX said Google China has resisted that step as against company principles, though it has taken other smaller measures to try and placate the government. Thus far that tactic has been unsuccessful, and the government has already taken commercial steps against Google, including telling the three dominant SOE telecoms to stop doing business with the company. CDA and XXXXXXXXXXXXX discussed possible USG advocacy, including having imminent visiting Codels and possible Cabinet-level officials raise this directly. For the moment, Google does not wish to go public, preferring to see if current efforts produce results. End Summary.


¶2. (C) XXXXXXXXXXXXX, CDA Dan Piccuta and XXXXXXXXXXXX talked XXXXXXXXXX about the increasing censorship pressure Google is facing.XXXXXXXXXXXX said Politburo Standing Committee member XXXXXXXXXXXX recently discovered that Google’s worldwide site is uncensored, and is capable of Chinese language searches and search results. XXXXXXXXXXXX allegedly entered his own name and found results critical of him. He also noticed the link from google.cn’s homepage to google.com, whichXXXXXXXXXXXX reportedly believes is an “illegal site.” XXXXXXXXXXXX asked three ministries (note: most likely the Ministry of Industry and Information Industry, State Council Information Office, and Public Security Bureau.) to write a report about Google and demand that the company cease its “illegal activities,” which include linking to google.com.

Commercial Consequences Already Visible
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¶3. (SBU) XXXXXXXXXXXX said that removing the link to google.com is against the company’s principles, and its leadership has definitively refused to make such a change, despite the importance of the Chinese market. Google recently has officially but “politely” told the government this, XXXXXXXXXXXX noted, and their Chinese interlocutors at the time were visibly unhappy and said they would report the news to XXXXXXXXXXXX . XXXXXXXXXXXX reported that Google had, however, already made some changes to its Chinese site and will continue to make others. Nonetheless, he said China has already asked its three state-owned telecom companies to stop working with China, a hard blow because mobile Internet is Google’s “big bet in China.”XXXXXXXXXXXX said one telecom company is seeking to back out of an existing contract with Google, while the two others have stopped moving ahead with negotiations. Other SOEs have also been asked to stop working with Google in China,XXXXXXXXXXXX said.


¶4. (SBU) The best case scenario XXXXXXXXXXXX foresees is that China responds to Google’s official refusal to take down the link by issuing an order warning against further non-compliance. More likely is
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that google.com will be blocked in China, either sporadically or permanently. This would be similar to China’s current blocking of YouTube, but with greater implications for users including business travelers and tourists, advertisers, and for Google’s network and technology platforms, possibly affecting other services like Gmail.thought it also possible that the government might revoke Google’s license to operate in China. He acknowledged that sensitive anniversaries in 2009 present special challenges to the Chinese government, especially the XXXXXXXXXXXX June 4 Tiananmen anniversary. (Note: Possibly in preparation for this anniversary year, Chinese censors have engaged in a months-long “anti- vulgar” campaign to shut down hundreds of “illegal” websites; see reftel.)

Google Deems its Legal Basis Sound
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¶5. (SBU) Google lawyers have found no legal basis for China’s demands, XXXXXXXXXXXX reported. While the government has called google.com an illegal website to justify its request for removal of the link, Chinese law does not explicitly identify the site as illegal, the site is not blocked by China, and thousands of other Chinese websites include links to google.com.


¶6. (C) XXXXXXXXXXXX said Google faces the dilemma of losing the Chinese market in retaliation for maintaining Google’s integrity and brand. The CDA and XXXXXXXXXXXX discussed the difficulty of engaging China on this matter, since no trade obligations cover China’s censorship regime, but considered what U.S. Government actions might be possible nonetheless.

USG High-Level Advocacy Requested
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¶7. (C) XXXXXXXXXXXX suggested that high-level USG officials phone or write to XXXXXXXXXXXX to indicate support for Google’s operations in China, in accordance with Chinese law. He suggested the letter could urge further dialogue toward a mutually acceptable resolution and suggest diplomatic or commercial consequences in the event of rash or disruptive action. After some discussion, XXXXXXXXXXXX concluded that intervention by Secretary Locke might be the most effective step.

¶8. (C)XXXXXXXXXXXX He noted that Google has also raised the issue with Representatives Kirk and Larson. However, he stressed, he would like USG support in making contact.

¶9. (C) The CDA said senior Embassy officials will meet with relevant Chinese ministries to make it clear the USG is aware of the issue, and to urge them to work constructively with Google.XXXXXXXXXX stressed that, before the USG engages on their behalf, Google would prefer to wait a few days to see what other steps the Chinese government might take.

Google History in China
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¶10. (SBU) XXXXXXXXXXXX explained that Google entered the Chinese market in 2006 under scrutiny from Congress and shareholders, both concerned with the company’s agreement to be subject to censorship. To enter the China market legally, but remain faithful to its values, the company took a path of
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“responsible engagement” that included three commitments: Google will never disclose to the Chinese government any personal information about its users or their search habits; Google will always include a disclosure notice to identify when search results had been removed due to censorship; and Google will always provide an uncensored, U.S.-hosted site, subject to U.S. law.


¶11. (SBU) XXXXXXXXXXXX said the Chinese government’s granting of the licenses necessary for Google to operate in China implied passive approval or at least tolerance of the above principles. Since 2006, XXXXXXXXXXXX said, the company has operated responsibly and legally, following censorship orders just as other companies do. The vast majority of Chinese government requests for censorship have been related to pornographic material and illegal activities, XXXXXXXXXXXX said. In total, only about one percent of search results are blocked in China, according to the company.


¶12. (SBU)XXXXXXXXXXXX observed that, before Google China was formed, google.com was blocked in China in 2002 for approximately two months. At the time, he said, scholarly users were the company’s largest constituency, and their complaints about limited access to academic materials through Google ultimately caused the government to re-open the site. This time,XXXXXXXXXXXX observed,XXXXXXXXXX seems unconcerned with such repercussions, and will likely not yield to pressure from China’s Internet community. XXXXXXXXXXXX he said, believes Google is a “tool” of the USG being used to “foment peaceful revolution in China.”


Comment
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¶13. (C) While we can neither confirm nor deny the provocative language and views attributed to XXXXXXXXXXXX, the claims of government-forced retribution by the major SOE telecoms companies are cause for serious concern. The potential for continuing escalation by the Chinese, assuming Google sticks to its guns -- and the likelihood of loud U.S. Congressional and public outcry if it caves -- suggest a high-level USG response may be in order. While we cannot verify XXXXXXXXXXXX’s claims of commercial retaliation, such a move seems quite possible. End Comment.