9 ms·

Speaking entirely divorced from my opinion on China politically (as someone with strong US and TW ties, FWIW), I think the Great Firewall has been a brilliant e

by eob 12y ago

Speaking entirely divorced from my opinion on China politically (as someone with strong US and TW ties, FWIW), I think the Great Firewall has been a brilliant economic move in retrospect. While it may have been an accidental side-effect, blocking so many foreign sites has enabled a flourishing of domestic internet companies of the likes that nobody but the US has seen unless I'm mistaken. And for a "middle class" of blocked sites, while not technically blocked, the packet delay is so great most people (except a dedicated few) will just shrug and figure that cross-continent internet connections must be too slow to be practical. Accessible, but only if you're willing to wait a minute. A brilliant political play, because it's hard to pin a charge oppression on anyone, since the information is technically there, but so slow nobody will access it.

mahranch 12y ago
> blocking so many foreign sites has enabled a flourishing of domestic internet companies of the likes that nobody but the US has seen I'm not sure I follow. It's not like there's a huge demand to do business with local Chinese nationals. There's opportunity, sure, there's always opportunity, but don't confuse that with demand. Unfortunately, very few businesses outside of China could even compete with domestic companies anyways. They're literally working for pennies on the dollar. That's also ignoring the cultural and language barriers, not to mention governmental red-tape you would have to go through. It would be like me trying to set up an customer service business here in Maine and trying to sell my services to a lower-middle sized company in India. I wouldn't be able to compete with local Indian companies since their overhead and costs are significantly less than mine. Obviously there are exceptions depending on the industry, but they are just that, exceptions.
- dummyfellow 12y ago
  All biz are not labour intensive, in India GMail, Facebook and Twitter rule, in China the local counterparts.
- landryraccoon 12y ago
  Facebook wouldn't incur any additional costs operating in China except for the cost of additional server infrastructure, which would be the same for a Chinese company. Their engineering costs are sunk costs. They wouldn't be competing against Chinese engineers for pennies on the dollar (if you could even find Chinese engineers of the same skill set).
maged 12y ago
The side-effect was definitely not accidental. China has blocked the major company in every internet industry (social networks, search engines, video streaming, etc.), and as a result domestic products are booming. Now these domestic products are starting to expand internationally with the revenue they get from the artificial Chinese market. Korea did something something similar with its Chaebols' (Hyundai, Samsung, or other large Korean companies in countless industries) in the 80s. It had protectionist policies that let the Korean companies charge outrageous prices domestically, and used that revenue to become very competitive internationally. And it worked.
- RodericDay 12y ago
  "Bad Samaritans" by Ha-Joon Chang, a South Korean economist now at Cambridge University, is a good light read fleshing out these ideas.
- netcan 12y ago
  When the companies in question are google, facebook, twitter, etc., it's a lot more difficult to make the normal "utility calculus" arguments that are the way most economists understand the cost of protectionism to domestic consumers. When you look at the cost per vehicle paid by consumers in scenario A vs scenario B, there's a clear argument to be made. With services, it's more speculative. Is the average haircut in China better or worse than Malaysia's? With web services, it's near impossible to measure consumption or consumer surplus. The underlying economics driving normal goods and services industries (economies of scale, price competitions, marginal costs of production) aren't there. That makes the economics we can measure in goods industries and theorize in services industries very shaky. Economists generally do have a sense that choice is good and protectionism is bad, but it's hard to formalize or measure when the products are newspapers, search engines, social networks and dating apps.
- spoomor 12y ago
  Google never got much market share before it was more seriously blocked. ICQ too failed compared to QQ despite not being blocked. I think the bigger reason is foreign companies just don't provide what Chinese people want - ie Chinese language and millions of flashing banner ads.
LiweiZ 12y ago
I don't think a brilliant move, even economically, can be called in this case. When the upper class/inner circle saw the money in this field, it's the first thing they were willing to do. If this kind of action can be called that way. We can easily find mountain-high pile of cases that we can call brilliant in the ruling party's history. Yes, economically grabbing people ruled by it. Take any amount when it wants to.
edwinyzh 12y ago
While I'm quite sure it's true, but I'm also sure it's a side effect.
gph 12y ago
I wonder if someone might challenge China on this at the WTO. It could perhaps be seen as a backhanded tariff. As you say it's acted like one for their domestic internet businesses.
chroma 12y ago
I completely agree with you. On a related note: The Great Firewall is rather easy to get around, but that's the point. That tiny inconvenience sates the nonconformists while making the vast majority of people simply give up.[1] The same goes for jailbreaking one's phone or switching operating systems. Heck, many people can't even be bothered to check "organ donor" on their drivers license. 1. http://lesswrong.com/lw/f1/beware_trivial_inconveniences/ http://lesswrong.com/lw/f1/beware_trivial_inconveniences/
- skatenerd 12y ago
  The great firewall is not "rather easy" to get around. It can be a giant pain in the ass. Source: I live in Beijing
  - chroma 12y ago
    When I was in Hangzhou, it was quite easy. I guess our anecdotes cancel each other out?
    - siscia 12y ago
      I am in Shanghai and I find it pretty difficult... Without paying (a VPN), of course...
      - netcan 12y ago
        I think you guys are arguing about the definition of "difficult." $20 and 10 minutes is harder than free and instant, but...
      - Privatoria 12y ago
        you're right. VPN is a good solution in this case
    - neolefty 12y ago
      It has become substantially more difficult over the last year or so, in my experience, with periodic blockages and slowdowns.
crystaln 12y ago
Most definitely not an accident. China throttles every successful foreign internet startup. They prefer the economic benefit confers to Chinese, and political control remains in China - for obvious reasons.
grn 12y ago
I think that, from the economic perspective, it's just a form of protectionism. You help local producers at the expense of consumers. Few benefit at the expense of many.
westiseast 12y ago
You're making a bad assumption - that because protectionism resulted in a flourishing Internet economy, that it wouldn't have happened without protectionism. Imagine what kind of Internet economy we'd have in China without this dumb firewall and protectionist policies in place - Baidu might actually be a global rival to Google instead of the piece of crap it is :) Global consumers might be happily buying from Taobao instead of the piece of crap that Amazon is :)
- bnomis 12y ago
  Yes. They're not blocking because of protectionism. It's because they can't censor the content to meet the local rules. China is not alone in this but they are at the thick end of the censorship wedge.
spindritf 12y ago
I'm pretty sure the language barrier and a massive internal market do most of the heavy lifting here. Look at Yandex. The Great Firewall is a wash at best. It protects local companies from international competition but it's part of a policy that makes foreigners trust Chinese products much less and will hurt their adoption.
josefresco 12y ago
"I think the Great Firewall has been a brilliant economic move in retrospect. " In the short term yes, but as China is "opened up" more to the western world, this separation and state sponsorship will hurt international growth for domestic Chinese companies. Many in the "middle" ground will operate as they always did, but if you're a big Chinese tech company looking to expand around the world- this will hurt potential partnerships and foreign investment.
coldtea 12y ago
While we may pay lip service to the web as "open" and "international", it's pretty western and particularly US dominated. From basic infrastructure like core domain names, to standards bodies like the W3C and IEEE, to the big companies like Google, Facebook, Ebay, PayPal, Anazon, Apple and co. Even sites like Wikipedia, supposedly available to anyone to edit, are pretty much dominated by specific points of view and ideas (even if sometimes those who held those like to think that those ideas are or should be universal and/or neutral). Neither economically, nor culturally does it make sense for a nation the size of China (or even for EU, but I digres) to participate in such a web. They are not some pushover country that was created a century ago. They have their own, millenia old, civilization. It's not like they are isolated by doing the firewall thing either. They get all the good (and the crap) we get in large does anyway, from the Kardasians to Jackson Pollock. Think experiment: if the internet was mostly run and dominated by USSR, including a "neutral" Commipedia full of USSR points of view and material, would the US adopt it? Or would they build their own counterpart?
josephjrobison 12y ago
Of course there are many factors in North Korea's status as a failed state, but if protectionism is such the brilliant move, then why isn't North Korea more successful.

by eob 12y ago

mahranch 12y ago

> blocking so many foreign sites has enabled a flourishing of domestic internet companies of the likes that nobody but the US has seen I'm not sure I follow. It's not like there's a huge demand to do business with local Chinese nationals. There's opportunity, sure, there's always opportunity, but don't confuse that with demand. Unfortunately, very few businesses outside of China could even compete with domestic companies anyways. They're literally working for pennies on the dollar. That's also ignoring the cultural and language barriers, not to mention governmental red-tape you would have to go through. It would be like me trying to set up an customer service business here in Maine and trying to sell my services to a lower-middle sized company in India. I wouldn't be able to compete with local Indian companies since their overhead and costs are significantly less than mine. Obviously there are exceptions depending on the industry, but they are just that, exceptions.

dummyfellow 12y ago
All biz are not labour intensive, in India GMail, Facebook and Twitter rule, in China the local counterparts.
landryraccoon 12y ago
Facebook wouldn't incur any additional costs operating in China except for the cost of additional server infrastructure, which would be the same for a Chinese company. Their engineering costs are sunk costs. They wouldn't be competing against Chinese engineers for pennies on the dollar (if you could even find Chinese engineers of the same skill set).

maged 12y ago

The side-effect was definitely not accidental. China has blocked the major company in every internet industry (social networks, search engines, video streaming, etc.), and as a result domestic products are booming. Now these domestic products are starting to expand internationally with the revenue they get from the artificial Chinese market. Korea did something something similar with its Chaebols' (Hyundai, Samsung, or other large Korean companies in countless industries) in the 80s. It had protectionist policies that let the Korean companies charge outrageous prices domestically, and used that revenue to become very competitive internationally. And it worked.

RodericDay 12y ago
"Bad Samaritans" by Ha-Joon Chang, a South Korean economist now at Cambridge University, is a good light read fleshing out these ideas.
netcan 12y ago
When the companies in question are google, facebook, twitter, etc., it's a lot more difficult to make the normal "utility calculus" arguments that are the way most economists understand the cost of protectionism to domestic consumers. When you look at the cost per vehicle paid by consumers in scenario A vs scenario B, there's a clear argument to be made. With services, it's more speculative. Is the average haircut in China better or worse than Malaysia's? With web services, it's near impossible to measure consumption or consumer surplus. The underlying economics driving normal goods and services industries (economies of scale, price competitions, marginal costs of production) aren't there. That makes the economics we can measure in goods industries and theorize in services industries very shaky. Economists generally do have a sense that choice is good and protectionism is bad, but it's hard to formalize or measure when the products are newspapers, search engines, social networks and dating apps.
spoomor 12y ago
Google never got much market share before it was more seriously blocked. ICQ too failed compared to QQ despite not being blocked. I think the bigger reason is foreign companies just don't provide what Chinese people want - ie Chinese language and millions of flashing banner ads.

LiweiZ 12y ago

I don't think a brilliant move, even economically, can be called in this case. When the upper class/inner circle saw the money in this field, it's the first thing they were willing to do. If this kind of action can be called that way. We can easily find mountain-high pile of cases that we can call brilliant in the ruling party's history. Yes, economically grabbing people ruled by it. Take any amount when it wants to.

edwinyzh 12y ago

While I'm quite sure it's true, but I'm also sure it's a side effect.

gph 12y ago

I wonder if someone might challenge China on this at the WTO. It could perhaps be seen as a backhanded tariff. As you say it's acted like one for their domestic internet businesses.

chroma 12y ago

I completely agree with you. On a related note: The Great Firewall is rather easy to get around, but that's the point. That tiny inconvenience sates the nonconformists while making the vast majority of people simply give up.[1] The same goes for jailbreaking one's phone or switching operating systems. Heck, many people can't even be bothered to check "organ donor" on their drivers license. 1. http://lesswrong.com/lw/f1/beware_trivial_inconveniences/ http://lesswrong.com/lw/f1/beware_trivial_inconveniences/

skatenerd 12y ago
The great firewall is not "rather easy" to get around. It can be a giant pain in the ass. Source: I live in Beijing
- chroma 12y ago
  When I was in Hangzhou, it was quite easy. I guess our anecdotes cancel each other out?
  - siscia 12y ago
    I am in Shanghai and I find it pretty difficult... Without paying (a VPN), of course...
    - netcan 12y ago
      I think you guys are arguing about the definition of "difficult." $20 and 10 minutes is harder than free and instant, but...
    - Privatoria 12y ago
      you're right. VPN is a good solution in this case
  - neolefty 12y ago
    It has become substantially more difficult over the last year or so, in my experience, with periodic blockages and slowdowns.

crystaln 12y ago

Most definitely not an accident. China throttles every successful foreign internet startup. They prefer the economic benefit confers to Chinese, and political control remains in China - for obvious reasons.

grn 12y ago

I think that, from the economic perspective, it's just a form of protectionism. You help local producers at the expense of consumers. Few benefit at the expense of many.

westiseast 12y ago

You're making a bad assumption - that because protectionism resulted in a flourishing Internet economy, that it wouldn't have happened without protectionism. Imagine what kind of Internet economy we'd have in China without this dumb firewall and protectionist policies in place - Baidu might actually be a global rival to Google instead of the piece of crap it is :) Global consumers might be happily buying from Taobao instead of the piece of crap that Amazon is :)

bnomis 12y ago
Yes. They're not blocking because of protectionism. It's because they can't censor the content to meet the local rules. China is not alone in this but they are at the thick end of the censorship wedge.

spindritf 12y ago

I'm pretty sure the language barrier and a massive internal market do most of the heavy lifting here. Look at Yandex. The Great Firewall is a wash at best. It protects local companies from international competition but it's part of a policy that makes foreigners trust Chinese products much less and will hurt their adoption.

josefresco 12y ago

"I think the Great Firewall has been a brilliant economic move in retrospect. " In the short term yes, but as China is "opened up" more to the western world, this separation and state sponsorship will hurt international growth for domestic Chinese companies. Many in the "middle" ground will operate as they always did, but if you're a big Chinese tech company looking to expand around the world- this will hurt potential partnerships and foreign investment.

coldtea 12y ago

While we may pay lip service to the web as "open" and "international", it's pretty western and particularly US dominated. From basic infrastructure like core domain names, to standards bodies like the W3C and IEEE, to the big companies like Google, Facebook, Ebay, PayPal, Anazon, Apple and co. Even sites like Wikipedia, supposedly available to anyone to edit, are pretty much dominated by specific points of view and ideas (even if sometimes those who held those like to think that those ideas are or should be universal and/or neutral). Neither economically, nor culturally does it make sense for a nation the size of China (or even for EU, but I digres) to participate in such a web. They are not some pushover country that was created a century ago. They have their own, millenia old, civilization. It's not like they are isolated by doing the firewall thing either. They get all the good (and the crap) we get in large does anyway, from the Kardasians to Jackson Pollock. Think experiment: if the internet was mostly run and dominated by USSR, including a "neutral" Commipedia full of USSR points of view and material, would the US adopt it? Or would they build their own counterpart?

josephjrobison 12y ago

Of course there are many factors in North Korea's status as a failed state, but if protectionism is such the brilliant move, then why isn't North Korea more successful.