Internet Controls and China Economic Development: Correcting for Geek Bias

October 27, 2011

I’ve been trying to get back to writing a follow-up post on U.S. attempts to build a case against China’s Internet policies as trade barriers. Unfortunately, I keep getting sidetracked. For example, this morning I got sucked into an interesting post by Michael Schuman, writing on Time’s ‘Curious Capitalist’ blog, entitled: “Can China’s Economy Thrive With A Censored Internet?” How can I fail to respond to that one?

Let me start out by saying that I’m predisposed to argue against Schuman’s position. The fact is that China’s economy is thriving and has been for quite some time, and all the while, Net content controls have been in place. So I think Schuman has a tough presumption here to overcome. I also believe that Westerners, because they view censorship as wrong, have a tendency to assume that Net controls are a huge intrusion into the lives of most Chinese, which is not the case. Moreover, a lot of tech writers inflate the importance of social media to economic growth, perhaps because it is been a huge driver of growth in the Net sector in recent years.

Be that as it may, let’s take a look. Schuman is basically questioning whether China will be able to continue growing, and in particular move up the value chain into high-tech product manufacturing, all the while avoiding getting stuck in the ‘middle-income trap.’ His first argument is that China’s Net policies result in productivity losses:

So while businessmen in all of China’s major economic competitors require a mere micro-second to open a web page, here in China everyone is stuck waiting around for several seconds – or depending on the page, perhaps as much as a minute. Add that lost time up over a week, a month, a year, and you’re looking at a ton of wasted time in China.

This is undeniable. Just as we Beijingers lose countless hours of our lives fighting traffic every day, slow Net speeds in China make us less productive. But how big of a hit is this?

I think that’s a reasonable question. It’s easy to point out lost productivity, but much more difficult to quantify it and even tougher to rank that loss in terms of importance and compare it to similar problems faced by other nations. And I have a sneaking suspicion that Western commentators who write about China Internet policies are affected significantly by what I like to call “Geek Bias.”

What is Geek Bias? Imagine you are the Shanghai correspondent of the Daily Blah, a large newspaper chain based out of New York. You are the guy who communicates to the world, through your writing, what it’s like to live in China. You are a 28-year-old graduate of Metropolis University’s School of Journalism and you live in a fairly nice one bedroom apartment with your iPad, MacBook Air, and as much bandwidth as you can pay for.

And yet, half of the time you jump on Google to check your Gmail or check the latest football scores, you can’t get through unless you log in to your VPN first. And forget about using the latest Chrome app to integrate Twitter with G+ or access Facebook to set up a photo gallery of pics from Grandma’s 90th birthday party — not without that VPN. And even then, the speed slows down to a crawl and you end up shouting at your laptop and pounding a beer just to rein in the frustration.

And then, your editor tells you to write something, anything, about China’s Internet policies. That article just might be affected by Net-related rage. Maybe.

I think you get my point. I am exaggerating of course, but I think there is a kernel of truth here. Very often, I read an article announcing that Topic X is now being blocked by a keyword search on Sina Weibo. The foreign Twitterati in China go nuts, as well as the usual Chinese activist folks. When I mention this to my wife, she usually replies with “So what?” and “Shut up, I’m trying to order a new pair of shoes on Taobao.”

Yes, a lot of time is wasted by folks in China waiting a long time for foreign sites to load. However, I think that number is much lower than Western Geeks assume. In any event, Schuman has no statistical evidence to back up his assumptions, and we are left with China’s very fast economic growth on the other side of the ledger.

Schuman’s next point is that Net controls impede information flow, crucial to economic development:

But with the Internet controlled, China is attempting this very difficult task without an important tool – free flow of information. If China is to develop homegrown, innovative industries that can compete on a global scale, its businessmen, scientists and students need to be hooked into what the rest of the globe is doing, to latch onto new trends, read about fresh ideas and connect to how everyone else in the world is living. That’s not possible here in China.

Whoa, hyperbole much? Yes, access to information is important for economic development, and blocking certain web sites and social media platforms could impede that discourse. But again, let’s correct for Geek Bias. Just because that correspondent for the Daily Blah sits at Starbucks every day with his iPad and gets a lot of story ideas from folks on Twitter, this doesn’t mean that a quantum physics researcher at Tsinghua University also looks to social media for inspiration and professional discourse.

Not to be a Luddite or anything, but let’s not inflate the importance of social media, which is mostly used for entertainment purposes here in China. I don’t think that blocking Facebook equates to shutting off all communications between Chinese innovators and the rest of the world, or that Chinese innovators will fail to “latch onto new trends” without it.

Schuman’s final two points are that: 1) China’s home-grown social media alternatives may be popular, but they do not help Chinese communicate with the rest of the world; and 2) if those companies attempt to go abroad (he cites a possible Alibaba acquisition of Yahoo as an example), they will be hindered by customer fears regarding personal security.

Both points are valid, but not quantifiable, and the second issue is subject to Geek Bias. If Alibaba buys Yahoo, will we see American customers jump ship in droves? Schuman might be knowledgeable about data security and therefore sensitive to this, but I doubt most Americans give a damn. In the past decade, customer data was freely given to the U.S. government by American telecom providers, and there was almost no outrage, and certainly no shift in service providers.

Bottom line here: slow load times hurt productivity, and content controls (by definition) impede access to information. But saying that this will therefore translate into a huge drag on China’s economy is just speculation; it might sound “right” because we don’t like censorship, but that doesn’t make it true. Moreover, I suspect that this assumption is colored by Western geek tendencies to inflate the importance of social media and downplay the unfettered means by which innovators are still able to communicate with colleagues around the world and perform research.