GWEN IFILL: For more on what's behind Google's latest move, we turn to James Fallows, national correspondent for "The Atlantic" magazine. He spent the last three years covering China and is working on a new book about the country and the government. And Andrew Lih, a writer on technology and media who has taught at Hong Kong University, he's a visiting professor at the University of Southern California's Annenberg School of Communication and Journalism.
Welcome to you both.
ANDREW LIH, University of Southern California: Thank you.
GWEN IFILL: Jim Fallows, after all this extended debate we have heard about whether or not Google would allow or should allow itself to be censored in China, what forced their hand?
JAMES FALLOWS, national correspondent, "The Atlantic Monthly": I think that they had a -- I talked actually this afternoon with David Drummond, who is their chief legal officer, who said that, even though the initial incident which provoked this was a hacking of some of their e-mail accounts and other services, that caused them to reconsider the whole bargain they made when they entered China four years ago.
And he argued that they -- they ended up thinking that the premises on which they went in, which is they would help open up Chinese exchange, were not really turning out. It had become more and more difficult to work there. And they just weren't willing to be a part of the censorship system themselves anymore.
GWEN IFILL: Andrew Lih, explain to those of us who -- people who have trouble remembering why Hong Kong is different from the mainland, for instance, why this move to Hong Kong changes the game for Google, or anyone.
ANDREW LIH: Right.
Although Hong Kong is technically part of China, it actually is a very different regime there in the special administrative region there. So, it's actually very free there. It's freedom of expression, freedom of speech. You have dissidents operating there. Falun Gong operates freely there.
So, it's -- it's a very different situation. When you have servers located in Hong Kong, that means that Google doesn't have to censor the content on those servers to comply with Chinese law, because the PRC laws don't apply there in Hong Kong.
What you do have to contend with, then, is that users accessing Google.com.hk, the content in Hong Kong, from China, they do have to deal with now the great fire wall, or the filtering that happens across the international border there. So, that's something that is new. Even though Google is not censoring anymore, the PRC authorities are.
GWEN IFILL: So, in fact, Jim, does it change really what happens?
JAMES FALLOWS: No. This is different for Google, because Google now says, we're not going to control what's on our site. We're not going to take this list which comes from the Chinese government every couple days and then use it to scrub our results.
For people inside mainland China, it doesn't really make that much difference, because the results are now being filtered by the Chinese great fire walls that come in from Hong Kong. As Andrew has written and I have written, too, most people in China won't really be affected by this decision that much, because they already live within the Chinese language infosphere.
But it's an important symbolic moment.
GWEN IFILL: So, why not just pull out completely? Is that a business decision?
JAMES FALLOWS: Well, I think it's a business decision, because, you know, China is the largest, most populous country on Earth. It is now or will soon be the biggest Internet market. And Google, understandably, wants to be part of that in the long run.
But I think they felt this part of their operation, of being an active part of the censoring mechanism, they just didn't want to do anymore.
GWEN IFILL: And following on that, Andrew Lih, Google doesn't actually pull out completely from China. It still has other business interests there.
ANDREW LIH: That's right.
So, the kind of services they put into Hong Kong are ones that are very sensitive in terms of content. So, that would include search, news and images. There's still a lot that they have left there in China, including music, video, mapping.
So, those types of things which are less controversial and are still pretty interesting for Google in terms of revenue are still there in China. And, as James mentioned, the Android operating system that they're trying to popularize on mobile phones around the world, they're still going to try to work with that in China.
GWEN IFILL: Well, you mentioned that, that phone system. Didn't we hear today that some of the mobile phone companies are saying maybe they are not going to play dice -- play dice with Google anymore, Mr. Lih?
ANDREW LIH: Well, yes, that's something that is -- that we're going to have to watch very carefully. I mean, a lot of partners in Google in China now have a lot of hard questions to ask themselves.
I mean, there is one report today that TOM Online, one of the most significant, you know, online and billboard advertising firms in China, has decided not to use the Google search engine, though it's interesting. TOM Online in the past has agreed to employ censorship in its Skype product that it co-markets with Skype in China.
So, it shouldn't be too much of a surprise that TOM has gone this way. But we have seen this in the past with -- with the direction that companies like TOM have -- have gone in China.
GWEN IFILL: So, Jim, there is a real moneymaking incentive for Google to stay...
JAMES FALLOWS: Sure, of course, yes.
GWEN IFILL: ... and to get access as well to talent, actual woman and man power.
JAMES FALLOWS: They have a very high-skilled research center in Beijing, which I have been into. Andrew Lih has been there, too.
But I think that, if it were purely a matter of dollars and cents for Google, they wouldn't have made this move, because it can only cost them in China. Again, China is a very, very important market. The mobile device market there -- basically, everybody in China has a mobile phone. It's going to be, by far, the most important mobile market.
So, the fact that they're doing this, and they're going -- some of their partners, they are going to reconsider it, it will be an economic problem for Google, even if there is some P.R. benefit, you know, unintended or intended, in the rest of the world.
So, I think you have to recognize this as something they did more for the principle of it than saying, oh, yes, we -- this somehow is going to be advantageous economically.
GWEN IFILL: Well, Andrew Lih, let's talk about the principle. The Chinese government says: This is about our sovereignty. We get to decide.
And Google, they -- the words they used today was, this was very -- totally wrong.
Were you surprised at the -- the pushback, the strength of that response?
ANDREW LIH: I was a bit surprised how strong the reaction was from the PRC government. Certainly, this does damage a little bit of the impression that China is this market that everyone needs to rush into and be engaged with.
So, for Google to be one of the largest, you know, dot-com firms in the world to reconsider this, you know, is it going to be the start of other companies doing the same type of thing or reconsidering what's going on? The fact that it's such a strong reaction from the PRC government means that they are probably irked at the way that Google has set up shop now in Hong Kong to kind of straddle the two sides.
And I would be interested to see what James thinks about that as well.
GWEN IFILL: Me, too. What do you think about that?
JAMES FALLOWS: Indeed.
And I think what's interesting now is that Google has made its move, and it can sort of sit at the moment. So, there's further moves from the Chinese government to see if they're going to take further retaliatory steps. And it will be very interesting next week, next month, next year, other Western companies operating in China, what kind of rationale they're going to make for how they decide are they going to play along with the censorship regime or not.
And, so, I think there is a case to be made for staying in China, as Google made until two months ago. But it's -- it's going to be an interesting time.
GWEN IFILL: We just heard the State Department say, you know, if I were China, I would be worrying about our business relationship with these other countries.
JAMES FALLOWS: Yes.
GWEN IFILL: Is...
JAMES FALLOWS: Well...
GWEN IFILL: That was an interesting response.
JAMES FALLOWS: You know, the Chinese government will say, fine. You take care of your country. We will take care of ours.
But I think it is actually, in an unexpected way, a really important moment inside China, where many of the Chinese intelligentsia, people who really cared about China's evolution, feel, what does this mean about our country in the long run if we can't have a company like Google feel comfortable operating here?
GWEN IFILL: Does this kind of decision, Andrew Lih, escalate this long-running debate between -- not only between Google and China, but also the Western world, which believes in these kinds of Internet freedoms and China? Does it make it even more key right now?
ANDREW LIH: Well, I think there were a lot of people who had very high expectations around Google, with its "Don't be evil" mantra, who were disturbed in 2006 the way that Google entered the market who are cheering today, very glad that Google, having seen it try to go into the China market in good faith and play by the rules, and also be the victim of -- at least they claim -- hacking into their systems that seemed to be pretty fishy, so that Google's pulling out now has made a lot of those folks very happy.
Something to add to what James said before, I think it's going to be very interesting. As Isaac said, only about 10 percent of the Chinese public really cares about Google. But, even then, that's a pretty significant number of folks who will now run into the great fire wall's infamous error messages of connection reset or connection interrupted, folks who might not have seen this type of error very much before.
And they might be -- start asking -- they might start to ask some questions they didn't before. And that might be something that the authorities are also concerned about, that a lot more Chinese denizens now will now be running into the great fire wall that they may not have really experienced before.
GWEN IFILL: More shoes left to drop.
Andrew Lih and James Fallows, thank you both very much.
JAMES FALLOWS: Thank you.
ANDREW LIH: Thank you.