Why did Tech Giant Google leave China?

The Chinese market is very attractive for technology companies. Statistics show that twice as many people in the United States use regular Internet services in China. Since Internet services are used, you need to understand that in China, twice as many people as the total population of the United States have devices in their hands to enjoy Internet services. Another startling fact is that the rate at which Internet users are growing in China is the highest in Asia. With the naked eye, China is an excellent market for any technology company in the country or abroad. Suppose somehow Chinese citizens can afford to provide quality technology products or technology services. In that case, there is a possibility of huge profits. It is possible to expand the organization to other parts of the world with that profit later.

Even if there is a market for manufactured goods or services, it is not easy to survive there. In a free-market economy, there are multiple companies in any market, so in order to survive, one has to produce better products and services than others. In addition, innovative energy has to be utilized to supply products in the market keeping in view the changing needs of the consumers. Founded by Sergey Brin and Larry Page, Google also did little to benefit the Chinese market. Google was founded in 1998, and two years later, two Chinese technologists, Robin Lee and Eric Xu launched the Chinese search engine Baidu. The fact that China developed its own search engine quickly after the American invention is a testament to China’s technological superiority among Asian countries.

Interestingly, although Baidu and Google came face to face in the Chinese market, the search engine Google entered the Chinese market through Baidu. Google initially bought a 2.5 percent stake in Baidu for just 5 million. They sold the shares for 60 million shortly before launching their search engine (google.cn). In 2006, Google launched its own search engine in China. Although not equal to Baidu, Google’s popularity in China has never waned. In 2009, China controlled about one-third of the search market. Google’s popularity among Chinese netizens has been steadily rising, as has its share price, as it struggles to compete with Baidu. Since Google has been able to build a strong position in the huge Chinese market, no one could have imagined that it would suddenly wind down its operations.

In 2010, Google’s Chinese search engine launched a major cyber attack. Under the codename ‘Operation Aurora,’ Chinese hackers used the cyber-attack to steal information from some Chinese human rights activists, carrying out naked attacks on various Google’s intellectual property. Google was shocked by the incident and launched an investigation. The investigation report shows that the cyber attack was carried out in China. Later, Google got into big trouble with the Chinese government over censorship. The Chinese government imposed censorship on Google’s search results to curb dissent or prevent outside interference, which did not satisfy Google officials. Google and Baidu also had problems with the Chinese government’s censorship issue.

China is one of the few countries in the world to have a state-run hacker force. Chinese hackers are notorious all over the world. In order to establish themselves as a global superpower, it is necessary to be an economic superpower first. And political stability is a big condition for keeping the economy afloat. The Chinese Communist Party never wants any instability in their one-party political system. In economics, they adopt a free market system. However, politically they never tolerate dissent or anything beyond the decision of the Communist Party. Statewide, Chinese hackers have been instrumental in suppressing dissent in their own country. The seizure of information from Gmail by Chinese human rights activists that were part of a cyber-attack campaign by Chinese hackers cannot be overstated.

Google had to struggle to cope with Baidu in the Chinese market as well. Those behind Baidu’s establishment understood very well the needs of Chinese society as citizens of China. That’s why Baidu came up with the idea of ​​e-commerce in about 200 cities in China around 2005 when Google did not have such an initiative. Google initially relied on those Silicon Valley technologists for the Chinese search engine. The people of Silicon Valley weren’t very good at coding Mandarin, and Chinese netizens didn’t get many benefits from Google in the first place. But later, Google hired a large number of Chinese nationals. Who showed proficiency in Mandarin language coding. Although not able to cope with Baidu, Google benefited from the huge market. But their image was severely tarnished by cyber-attacks, and they shut down their operations in China in 2010.

Many say that Google’s search engine activity in China was a ‘minor test.’ Google has lost profits because of the loss of the Chinese market, but that has not affected other markets around the world. China’s cyberattacks have forced them to be more cautious in the future. Google does not have strong competition as a search engine worldwide, but Baidu has challenged them in China. To analyze the reasons behind Google’s exit, one has to point the finger repeatedly at the dark side of the Chinese Communist Party.