Freedom House explains serious self-inflicted damage that Chinese censorship has brought to country: Democracy, elections and voting at Democracy Chronicles

Freedom House report by Sarah Cook, Senior Research Analyst for East Asia:

Over the past two years, the Chinese authorities have taken new steps to block Chinese citizens’ access to information from U.S. companies and media. These actions not only limit Chinese citizens’ access to news and entertainment, but they also harm U.S. businesses, media outlets, and innovators. In effect, the Chinese Communist Party’s aggressive efforts to defend its political monopoly are costing the U.S. economy billions of dollars a year.

These dynamics pose a challenge to smoother bilateral relations. They undermine trust, create obstacles to cooperation, and infuse business interactions with an underlying sense of unfairness. As such, they should be high on the agenda of any meeting between American and Chinese officials, be it the just concluded U.S.-China Strategic and Economic Dialogue or Xi Jinping’s upcoming U.S. visit in September.

From bad to worse

Covering China has never been easy for American journalists. But pressure on foreign media companies and harassment of their correspondents—especially via website blocks, visa delays, and de facto expulsions—has increased over the past seven years, following a brief period of relaxation surrounding the 2008 Beijing Olympics. Moreover, virtually any U.S. firm operating any information service or website that is accessible to Chinese users faces pressure to implement Communist Party surveillance and censorship directives. Those who refuse risk being shut out of the world’s largest web market.

Despite these long-standing challenges, since Xi took over the party helm in late 2012, Chinese government actions have introduced new impediments to the free flow of information between the United States and China.

First, new blocks have been imposed on previously available U.S. websites and online services, including some that have been accessible to Chinese users for years.  Between May and September 2014, photo-sharing applications Flickr and Instagram, as well as virtually all Google services, were blocked. In December, Gmail access from third-party applications like Outlook or Apple mail was also disrupted. According to data from Greatfire.org, an organization that tracks accessibility of foreign websites in China, all of these services had been freely available for at least two years prior to the blocks.

Second, blocks have begun to target widely used cloud services. Last summer, Dropbox and Microsoft’s OneDrive were rendered inaccessible. In November, segments of Verizon’s Edgecast were blocked, affecting commercial platforms like Sony Mobile alongside activist sites like FreeWeibo, which publishes microblog posts censored in China. Many businesses in China—both foreign and domestic—rely on these cloud services to store and share data, meaning the blocks disrupt their daily operations in a more meaningful way than the restriction of access to a single news website.

Third, a new form of aggressive cyberattack has emerged. A massive cyber attack on GitHub—a code-sharing platform used by programmers worldwide—in March featured the hijacking of traffic passing through China’s virtual borders en route to the servers of leading Chinese search engine Baidu. The traffic was then redirected toward the target to implement an overwhelming denial-of-service attack that incapacitated the platform for five days. According to technical experts, neither the unsuspecting users nor the Chinese company Baidu had a way of preventing the assault. But an investigation by the Toronto-based Citizen Lab published in April found compelling evidence of a government connection to the attack, and labeled the new tool China’s “Great Cannon.”

Fourth, a series of pending draft laws and regulations would significantly increase intrusive demands and restrictive measures affecting U.S. actors across a range of sectors—finance, academia, nonprofits, and technology, to name a few. For example, rules circulated in early 2015 would require firms selling computer equipment to Chinese banks to share secret source codes and provide so-called back doors to the authorities.

Draft laws on counterterrorism, national security, and foreign nonprofits would increase digital surveillance (and requests for user information) and subject the China activities of U.S.-based civil society groups, foundations, and universities to oversight by the Ministry of Public Security. This would enhance the risk of reprisals for Chinese contacts and the likelihood that permission for even apolitical activities would be denied. Business groups like the U.S. Chamber of Commerce have joined civil society organizations to voice rare public opposition to the changes.

Decrees from a black box

Many of the recent restrictions have emerged from a remarkably opaque and arbitrary decision-making process. This is especially noticeable when long-accessible websites and online services are suddenly blocked. With no visible change in the laws and no official explanation offered in writing, China watchers are left to speculate on the reasons and timing of the new obstructions.

Was the catalyst a sensitive event like prodemocracy protests in Hong Kong, and if so, will the block be lifted after it concludes? Or was the service flagged for blocking because it reached a critical mass of users and therefore presented a meaningful threat to the Communist Party’s information control? Had it become too strong of an economic competitor for a local brand that the government wants to champion? Or as Tech in Asia’s Steven Millword put it, “Maybe some guy just pulled the wrong lever.”

Even when a formal document has been issued, many observers in the United States and China have been puzzled that the full implications—and potential contradictions with existing rules—do not appear to have been given much consideration. This unpredictability and apparent caprice makes it extremely difficult for U.S. companies to develop a viable business model for China.

Economic costs and damage to bilateral communication

Official actions that suddenly change the rules of the game generate genuine concern in both the United States and China because they have a real-world impact on the financial sustainability of news outlets, the profitability of corporations, and access to information for millions of expat and local users in China. A 2012 block on The New York Times English and Chinese websites in response to the paper’s investigative report into the wealth of then premier Wen Jiabao’s kin, caused the Times’ stock to lose 20 percent of its value overnight and required agreements with advertisers to be renegotiated. Although the stock slowly recovered, the paper suffered notable revenue losses.

Chinese government censorship narrows the range of business opportunities for American companies, forcing them to make do with whatever activities are still open to them. Facebook and Twitter—although blocked in China—have allowed Chinese businesses to advertise to their overseas users. Google Play similarly permits Chinese developers to sell their applications outside China. These ventures are creative and apparently profitable, but they represent a tiny sliver of the business that could be generated with unrestricted access to the Chinese market. They are also fundamentally unfair, in that Chinese entrepreneurs can take full advantage of the companies’ global reach, but the U.S. firms are cut off from China’s consumers.

Censorship pressure has also generated conflict within U.S. media companies, as it becomes clear that intrepid news gathering and adherence to journalistic principles will carry an economic cost. This problem gained greater international attention last year after senior executives at Bloomberg News apparently decided to retreat from publishing investigative reports on the wealth of the Chinese political elite due to the potential damage that government reprisals could inflict on Bloomberg’s other interests in China, primarily the sale of its financial data terminals.

Similar dilemmas have afflicted technology and social media companies as they confront compliance pressures that their Chinese competitors must meet simply to stay in business. Google eventually decided to retreat from its search business in mainland China rather than censor results, and LinkedIn is currently treading a fine line to maintain its presence. In March, CloudFlare cut off its service provision to Lantern, a group that was using the content-delivery network to offer Chinese internet users access to uncensored information. GitHub, responding to its recent “Great Cannon” bombardment, said “we believe the intent of this attack is to convince us to remove a specific class of content.” But it appears they were unconvinced, and the site continues to host the pages of the New York Times Chinese edition and the anticensorship group Greatfire.

Over time, the various obstacles thrown up by Beijing have had a deleterious effect on international news coverage and information sharing on important topics. But even as foreigners feel the impact, it remains Chinese citizens who pay most dearly for their government’s censorship. The Communist Party’s latest blocks and regulations have increased the share of the Chinese population that is losing contact with the international community and its diverse information sources. According to one college counselor from Shanghai, the censorship adds new difficulties for Chinese students applying to study at U.S. universities and, more generally, limits their worldview.

Consequences for U.S.-China relations

From a geopolitical perspective, these developments have a profound impact on the relationship between the world’s two largest economies. The divided and distorted information landscape breeds mistrust and increases the potential for misunderstanding. Chinese audiences receive a partial and misinformed perspective of U.S. policy and society. Americans see Chinese officials taking steps that threaten the United States’ economic wellbeing, but are barred from hearing the views of Chinese citizens who may disagree with their government. This results in both sides having a more negative view of the other than each may deserve, a recipe for greater tension now and in the future.

On a more practical note, the restrictions create higher hurdles for U.S. investment in China and hinder day-to-day cooperation in the arts, non-profit, and academic sectors. Moreover, the Chinese government’s actions contradict its own stated policies, like not interfering in other countries’ affairs, and undermine key goals popular with China’s citizens, such as earning global respect for the nation.

Unfortunately, Beijing has done itself no favors with its public responses to censorship incidents. Official spokespeople and state-run media are often dismissive, plead ignorance, conflate incomparable situations, or present a disingenuous version of the facts. Most commonly, they fall back on the claim that any restrictions are imposed according to the law, which all companies and individuals must follow. In October 2014, Chinese internet czar Lu Wei said of Facebook: “Foreign internet companies can come to China if they abide by the law.”

At first glance, this seems reasonable. The problem is that “the law” in today’s China—especially on topics like freedom of expression—is actually a tangle of arbitrary regulations, extralegal party directives, and politically controlled courts that are incapable of impartially adjudicating disputes or upholding rights listed in the constitution.

The United States, of course, is not entirely without fault. Edward Snowden’s revelations of the transnational surveillance by U.S. spy agencies have also undermined trust between the two countries and invited accusations of hypocrisy when U.S. officials call for greater internet freedom. According to some observers, the U.S. programs have contributed to the Chinese government’s desire to restrict the use of American-made hardware and software.

But however intrusive or disturbing U.S. surveillance may be, it does not set out with the goal of suppressing freedom of information. The U.S. political system is founded on the idea that such freedoms must be protected, not least as boons to business and international relations. The Chinese Communist Party, by contrast, sees freedom of information as a fundamental threat to its rule. This is the crux of the conflict.

Indeed, the steps being taken by Chinese authorities go far beyond any legitimate interest in protecting government offices from potential U.S. surveillance, preventing terrorist attacks, or combatting perceived social ills like gambling or pornography. Rigorous research has repeatedly shown that the content targeted for censorship in China most often relates to critically important topics like official corruption, police brutality, religious persecution, ethnic relations, and public health. Many measures also serve to ensure Communist Party control over key nodes in the information flow, regardless of what is being communicated.

An opportunity for Beijing and Washington

The best solution for both sides would be for the Chinese government to relax its controls and create truly autonomous entities to define and implement remaining restrictions on content that is internationally recognized as harmful. Unfortunately, the current Chinese leadership has offered no sign that it is moving in that direction. Rather, it is turning more sharply toward arbitrary and politically repressive policies.

Given this trajectory, the U.S. government should work with diverse international and domestic actors to push back against restrictions and create space for the free flow of information, while making better use of global rule-based mechanisms to challenge actions that violate Beijing’s international commitments.

More directly, the U.S. and Chinese governments should integrate this topic into their many business, trade, and political discussions. In today’s world, it is impossible to separate freedom of expression and freedom of information from other elements of the social and economic environment. Bilateral talks must reflect this reality.

If progress can be made on this tough issue, it would mark a truly positive step forward for U.S.-China relations and would be welcomed by people in both countries who are eager for easier ways to e-mail, “friend,” and tweet one another.

Sarah Cook is a Senior Research Analyst for East Asia at Freedom House and author of The Long Shadow of Chinese Censorship: How the Communist Party Media Restrictions Affect News Outlets Around the World and The Politburo’s Predicament: Confronting the Limitations of Chinese Communist Party Repression.