Book Review: Red Wired, China's Internet Revolution

See also: Google's China Odyssey

Sherman So, formerly the lead technology writer for the South China Morning Post, could not conceivably have known when she started this book that Google, the focus of one of its major chapters, would threaten to leave the world's biggest Internet market in virtually the same month the book was published.

Excerpts from the chapter on Google appear here (see also:Google's China Odyssey). As So and her collaborator, University of Illinois professor Christopher Westland, point out, Google has recently begun to make inroads on the local leader and rival, Baidu, with its fourth-quarter 2009 share of the market growing to 35.6 against 31.3 percent in the third quarter, while Baidu's share fell to 58.4 percent from 63.9 percent, according to Analysys International, a Beijing-based market research firm. This is a dramatic upsurge from three to four years ago when Google was struggling with an inadequate staff and a lack of knowledge of the local market. Its share was as low as 16 percent in the second quarter of 2006, a year after it set up its China office against a Baidu share of 50 percent.

That makes Google's decision to abandon the market, if it comes, one that is fraught with danger. But it would be a loss for China because its Internet users would lose a vital window on the world. Google's biggest rival, Baidu, has virtually no presence outside China. Google's departure would cut off easy access for China's hundreds of millions of netizens to the outside world, and not just to the materials that China is trying to censor.

If Google packs it in, it loses access to easily the world's biggest Internet market and one that is growing fast. The Internet is having a dramatic effect on its users. Although China recognizes 11 major language groups, a fifth of China's population are learning English, because that is the language of the Internet. As the authors point out, at the time of writing, China had 338 million online customers – more users than there are people in the United States -- and an Internet population that is rising dramatically although unlike in the west, by and large people don't own computers.

The Internet café, largely a convenience for travelers to check their email in the west, is a crucial part of the Chinese experience. Some 42.4 percent of users go online via internet café. With limited sports facilities, and other options, the internet café becomes a social center as well.

So and Westland split the book into three sections, beginning with a relatively surface-level history of the Internet that practically everybody knows – its birth as the Arpanet, its evolution into the World Wide Web, the first tentative steps into China. Most of the book is taken up with profiles of the companies that have created China's success — Baidu, Sina.com, Tencent, Alibaba and Shanda, among others.

Interestingly, as the authors point out, unlike in Silicon Valley or the Route 128 corridor that surrounds the Massachusetts Institute of Technology in New England, where technology grew out of the academic world, "Many, if most, of these individuals are self-made entrepreneurs – far removed from the academic types that have been instrumental in forging internet businesses in America and Europe."

Jack Ma, the man who built Alibaba into China's biggest B2B provider, grew up in Hangzhou, at the age of 12 learning enough English to guide foreigners visiting the scenic area. He exemplifies China's Internet tycoons. "As bright and inquisitive as Ma was," the authors write, "in the eyes of China's educational system, he was a failure." He was unable to gain admittance to prestigious universities and remained as an English lecturer in the one he did get into, eventually being hired as an interpreter for a business delegation to the US. What he saw there and in Australia – open societies -- impelled him, on the advice of a friend, to start a website. The rest is history. Most of the entrepreneurs followed similar trajectories.

Interestingly, the two write, the Internet is much more a tool of the young in China, with about 70 percent of users under 30, the exact opposite of the US, where 70 percent are older. Most Chinese users, they say, are looking for fun and friends, since most of them come from single-child families as a result of Beijing's one-child policy. That is why online gaming, which provides the vehicle for those seeking net companionship, is the most vibrant sector of the Chinese Internet.

Ultimately, this is a book about Internet business and not about what the west regards as the greater issues — the controversies over censorship. Surprisingly, So and Westland write, "the Chinese government, long characterized, somewhat unfairly, as an overbearing, doctrinaire monolith, actually took a step back when the Internet took off in 1995. Of course, it expressed concerns about politically sensitive news and discourse, which at times led to blatant censorship…the blocking of Google and Facebook, and so on. But when it comes to commercially important issues, the Chinese government knows when to get out of the way."

Significantly, they say, the Internet was able to incubate undisturbed because the technology was so revolutionary that there were no vested interests – the lumbering state-owned enterprises, with their legions of featherbedding bureaucrats – to choke up the progress. That left people like Ma and many others free to go about it their own way. They were aided with what are called "sea turtles," the legions of Chinese who left an oppressive China for Silicon Valley and Route 128, and, like the amphibians, began the long swim home when China began to blossom.

One wishes for a wider discussion of how an authoritarian system like China's [or Singapore's, for that matter] can continue to cope with what has become the most freewheeling media vehicle on the planet, and continue to block what it finds dangerous to the system. The emerging challenge facing the Chinese government, the authors say, is how it can balance its urge to control the web, while keeping entrepreneurial spirits flourishing.

"'Ultimately,'" the authors quote an official as saying, "'the government does not want to kill the Internet industry. We just try to rule out what is deemed unpopular." In democratic societies, that decision is made by the users themselves. One wonders how China will eventually deal with the question.

See also: Google's China Odyssey