US embassy cable - 10BEIJING207 (original version)

S E C R E T SECTION 01 OF 02 BEIJING 000207 
 
SIPDIS 
 
NSC FOR BADER, MEDEIROS, AND LOI 
 
E.O. 12958: DECL: 01/26/2030 
TAGS: ECON, PGOV, PHUM, PREL, EINV, CH 
SUBJECT: GOOGLE UPDATE: PRC ROLE IN ATTACKS AND RESPONSE 
STRATEGY 
 
REF: BEIJING 183 
 
BEIJING 00000207  001.2 OF 002 
 
 
Classified By: DCM Robert Goldberg.  Reasons 1.4 (b), (d). 
 
1. (S) Summary:  A well-placed contact claims that the 
Chinese government coordinated the recent intrusions of 
Google systems.  According to our contact, the closely held 
operations were directed at the Politburo Standing Committee 
level. 
 
-- Another contact claimed a top PRC leader was actively 
working with Google competitor Baidu against Google. 
 
-- Chinese concerns over the recent Google threat to take 
down the company's Chinese-language search engine google.cn 
over censorship and hacking allegations were focused on the 
service's growing popularity among Chinese Internet users and 
a perception that the USG and Google were working in concert. 
 
 
-- An appeal to nationalism seems to be the Chinese 
government's chosen option to counter Google's demand to 
provide unfiltered web content. 
 
-- Contacts in the technology industry tell us that Chinese 
interference in the operations of foreign businesses is 
widespread and often underreported to U.S. parent companies. 
End Summary. 
 
Attacks Directed at High Level 
------------------------------ 
 
2. (S) On January 22 Chen Jieren (protect) nephew of 
Politburo Standing Committee (PBSC) member He Guoqiang and 
editor of a Communist Youth League website, told PolOff that 
the closely held Chinese government operations against Google 
had been coordinated out of the State Council Information 
Office with the oversight of Standing Committee members Li 
Changchun and Zhou Yongkang.  It was not until Google's 
public announcement of the intrusions into its systems that 
the issue had been discussed more widely within the Party. 
(Note: It is unclear whether President Hu Jintao and Premier 
Wen Jiabao were aware of these actions before Google's going 
public.)  As a result of Google's announcement, the PBSC had 
taken up the issue of Internet controls and the Google case 
in a series of meetings (reftel).  Chen stated that PRC 
operations against Google were "one hundred percent" 
political in nature and had nothing to do with removing 
Google, with its minority market share, as a competitor to 
Chinese search engines.  Separately, Li Kaifu (strictly 
protect), former CEO Google China, told ECON MinCouns that he 
believed PBSC member Li Changchun was working actively with 
Chinese Internet search giant Baidu against Google's 
interests in China. 
 
PRC Sees USG and Google Working Together 
---------------------------------------- 
 
3. (C) Chen Lingshan, Managing Editor of Foreign News for the 
Beijing News (Xinjing Bao), told PolOff January 21 that 
Google's recent move presented a major dilemma (maodun) for 
the Chinese government, not because of the cyber-security 
aspect but because of Google's direct challenge to China's 
legal restrictions on Internet content.  The immediate 
strategy, Chen said, seemed to be to appeal to Chinese 
nationalism by accusing Google and the U.S. government of 
working together to force China to accept "Western values" 
and undermine China's rule of law.  The problem the censors 
were facing, however, was that Google's demand to deliver 
uncensored search results was very difficult to spin as an 
attack on China, and the entire episode had made Google more 
interesting and attractive to Chinese Internet users.  All of 
a sudden, Chen continued, Baidu looked like a boring 
state-owned enterprise while Google "seems very attractive, 
like the forbidden fruit."  He said it "seems clear" to the 
Chinese people that Google and the U.S. government were 
working together on Internet freedom and to undermine Chinese 
government controls on the Internet.  That made some 
intellectuals happy, Chen said, but "some others" regarded it 
as interference in China's internal affairs. 
 
Industry: Interference Common, Paranoia Driving PRC Policy 
--------------------------------------------- ------------- 
 
 
BEIJING 00000207  002 OF 002 
 
 
4. (C) The president of a strategic international trade 
consulting business in Beijing and chair of AmCham's working 
group on export controls (please protect) noted the 
pronounced disconnect between views of U.S. parent companies 
and local subsidiaries.  PRC-based company officials often 
downplayed the extent of PRC government interference in their 
operations for fear of consequences for their local markets. 
Our contact emphasized that Google and other U.S. companies 
in China were struggling with the stated Chinese goal of 
technology transfer for the purpose of excluding foreign 
competition.  This consultant noted the Chinese were 
exploiting the global economic downturn to enact increasingly 
draconian product certification and government procurement 
regulations to force foreign-invested enterprises (FIEs) to 
transfer intellectual property and to carve away the market 
share of foreign companies. 
 
Chinese Media:  American Hypocrisy and Cultural Hegemony 
--------------------------------------------- ----------- 
 
5. (U) The Secretary's speech continued to dominate headlines 
January 25-26, with the official People's Daily (circ 2.2 
million) alleging collusion between U.S. officials and the 
business community as evidenced by the propinquity of 
Google's rethink of its China business and the Secretary's 
speech.  Chinese media again accused the U.S. of "cultural 
hegemony" for setting the standards for "so-called Internet 
freedom8 and of hypocrisy for calling for the free flow of 
information while using the Internet as a political and 
military tool.  People's Daily-affiliated Global Times 
English (circ 150,000) called the speech a "milestone" 
showing that U.S. and Western political interests were 
"taking over every dimension" of cyberspace. 
 
6. (U) The Party-affiliated Beijing News (circ 530,000) 
opined that the speech showed "a huge gap between Chinese and 
American information industries, which may lead to a trade 
war strategy."  In an article headlined "China Intensifies 
Counterattack on Internet Accusation," Global Times Chinese 
(circ 1.3 million) quoted Chinese scholar Niu Xinchun as 
rejecting the theory that U.S.-China conflict would replace 
the "G2" cooperation model, noting that U.S. attacks usually 
ended "poorly" when the U.S. considered its practical 
interests.  Many papers quoted statements from the State 
Council Information Office and Ministry of Industry and 
Information Technology calling Chinese Internet controls 
"legitimate" and saying they should not be subject to 
"unjustifiable interference."  Papers continued to conflate 
Google's China business strategy with the Secretary's speech. 
 
Blogging Circumscribed 
---------------------- 
 
7. (SBU) Anecdotally, censors appear to have cracked down on 
blogging about the Secretary's speech.  Several bloggers who 
attended our January 22 watch party (reftel) told us 
subsequently they had been instructed to take down their 
entries about the event, including eight entries by blogger 
Shen Yang.  Secretary Clinton's speech is currently blocked 
in Chinese on state.gov but remains accessible on the U.S. 
Embassy website in both English and Chinese. 
HUNTSMAN