This is a tale of two companies with very divergent views of their role and responsibility in the world: Rio Tinto and Google.
Let's start by pointing out that some people view China as a wonderful place full of panda bears, exotic foods, mystical shrines and a fascinating, spiritual people steeped in Buddhist culture and tradition. They tend to be the same people who still believe in the Easter Bunny and Santa Claus. These people believe in something called the Chinese Miracle, in which every Chinese is living the dream – skyrocketing from poverty to middle class in their booming economy. They most certainly are people who know China mostly from books and television, or perhaps from having been to the Olympics or from taking a well-guided tour to the Great Wall.
China is actually a pretty crappy, miserable place. 90% of the world's executions take place there; the overwhelming majority of Chinese citizens work long hours for dismal pay and live in wretched poverty; there is nothing remotely like freedom – of the press, of religion, or just about anything else; the environment is a toxic mess; and the military routinely goes after its own citizens. No one in China trusts anyone else for very good reason - anything not tightly nailed down disappears immediately. There are few fates in life worse than having been born Chinese and not part of the small power circle that controls the Chinese Communist Party. If you don't believe that, you have only to ask why it is nigh unto impossible for the average Chinese to get a visa to leave the country. You see, we in the western world don't worry too much about whether our folks will come back after a visit to some other country. The Chinese know that once they let someone go, the chances of them returning are very slim. So no one gets to leave unless the Chinese government has their family or some serious assets to hold as collateral to assure their return.
The highest circle of Chinese government is not a friend of the United States, Australia, or anywhere else. They are not even friends of the Chinese people. They want power – period – and have no compunction about using any means to get it, and they want that power because it leads to wealth. Whatever China has in mind with its currency manipulations, political and military posturing, and deliberate pressure to keep wages down in order to attract the world's manufacturing base, it is not for the benefit of the United Sates or Australia; and it is not so China can become a full-fledged, contributing member of the 'community of nations' making the world a better place.
A fellow by the name of Stern Hu– the ranking Chinese executive for British and Australian mining giant Rio Tinto – was arrested a while back and charged with accepting bribes and stealing state secrets. The Chinese should have made him an honorary member of the Party, if the accusations are true. Bribery and stealing state secrets seems to be as natural a part of the Chinese power culture as breathing. If those acts are, in fact, crimes in China, just about every Chinese with enough money to own a car should be in jail. According to the Washington Times last week, "The cyber-attack on Google and other U.S. companies was part of a suspected Chinese government operation launched last year that used human intelligence techniques and high-technology to steal corporate secrets, according to U.S. government and private-sector cybersecurity specialists." For the Chinese to accuse a guy from Rio Tinto of stealing information about iron ore is not just thin – it's ludicrous.
But the story is actually quite a bit deeper than this. It seems the accusations came immediately after Rio Tinto rejected a bid from a Chinese state owned outfit to double their ownership of Rio Tinto's iron ore operations from 9% to 18%. By all appearances, Rio Tinto got the message - you do business in China by Chinese rules or you get out – so they threw Hu under the bus, and jumped into bed with China – which buys the vast majority of Rio Tinto's iron ore.
The "trial", of course, was held in secret. Hu was found guilty and sentenced to ten years in China's Qingpu gulag, and Rio Tinto and China are off on further joint ventures, putting a lot of money into each other's pockets. A fellow by the name of Sam Walsh, who runs Rio Tinto's iron ore business says, "We have been informed of the clear evidence presented in court that showed beyond doubt that the four convicted employees had accepted bribes," while acknowledging that the trial was held in secret and the evidence cannot be disclosed.
Now maybe Sam was out sick that day in civics class, but the fact is that legitimate countries with legitimate legal systems hold their trials in the light of day. The accused gets to face his accuser, and the evidence is laid out in public. The only exceptions are cases of the most clandestine national security and there is nothing in the iron ore digging and steel making business that rises to that standard. If the evidence isn't open to the public then it doesn't exist. And you, Sam, have what is known as a conflict of interest. You and China have your hands deep into each other's pockets … roughly translated to mean that your word that the evidence exists ain't good enough. Maybe Hu did it, and maybe he didn't. It takes a lot more than the word of a Chinese judge or Sam Walsh to establish it as fact. It takes the word of someone with ethics, which rules those two out.
Compare this story with Google. Their tale is well known. The Chinese government has been in a full court press to control Google and to control the searches that can be done on their massive computer engines. Google has gone along with the Chinese for quite a while, trying to find ways to accommodate the Chinese censors without compromising their product. They finally said enough is enough. There is no market big enough, no carrot juicy enough for them to violate their founding principle: Don't Be Evil. They know full well that China is, in fact, evil, and they can only go so far with them before they become evil themselves; so they packed up their gear and moved beyond Chinese control to Hong Kong. Google knows the Chinese government is slashing and burning Google content in China, (It is telling that the primary issue is the ability of Google's Chinese users to get information about human rights advocates, which is information the central party will not allow to be freely available under any circumstances. Do you still believe in the wonders of the Chinese miracle?) but Google decided that if anyone is going to lie to and deny freedoms of the Chinese populace, it will have to be someone other than Google.
It seems Google was not created by some pie-in-the sky warm and fuzzy idealist who falls for the silly notion of the Chinese miracle. Nor was it founded by folks like Sam up at Rio Tinto who are willing to put money ahead of the interests of humanity or their own country or any other principle. No, Google's Sergey Brin grew up in Soviet controlled Russia, and he understands China with great clarity. He is having none of it because he sees evil as it is – while Rio Tinto can't seem to see beyond dollar signs.
Rio Tinto should be ashamed of itself, and all of Australia should be outraged at Prime Minister Kevin Rudd's assertion that the Rio Tinto debacle was "separate from Australia's productive relationship with China." What productive relationship? The power hungry leadership of China is stealing your most precious national, natural resources and Rio Tinto is getting a commission for helping them.
Barack Obama is no better as he leads the US in tiptoeing around Chinese leadership. The fact is, however, that 'evil' is a pretty good word to describe China. There is also an old adage that you can tell a lot about a man by knowing who his friends are. This case tells quite a bit about Google – and about Rio Tinto and the leadership of both companies. When all of the intellectual dust and complicated rationalizations fade away, Google sees life's bigger picture in pretty straightforward terms. Too bad Rio Tinto and so many others can't.