GOP rift over US firms in China

It is a tenet of American conservatives that US business has a pivotal role to play in promoting freedom abroad. Trade brings dialogue. Commercial interests build a counterweight to political ones.

But sharp questioning by a House panel this week of US technology firms in China has exposed a deep rift among conservatives about how to accomplish that goal. That rift, in turn, is complicating efforts by the Republican-controlled Congress to regulate what US tech firms do abroad.

The immediate bone of contention are revelations that Google, Microsoft, and Yahoo have helped Chinese authorities crack down on the flow of information. They have pared back what their Chinese users can see when searching the Internet. In addition, Yahoo furnished personal information about one of its users, a journalist now serving 10 years in prison for leaking state secrets. Yahoo is also investigating a second case in which it allegedly did the same thing.

On one side of the conservative divide are true believers in the problem-solving potential of markets. They want to give American firms maximum leeway in providing communication-enhancing tools to restrictive regimes. They argue that these tools can help bring the citizens of those regimes out of isolation.

"A person who gets a censored version of Google is more free than he was before" he had any Google access, says Rep. Tom Feeney (R) of Florida. But that toehold for freedom could vanish if Congress adds new rules because "technology companies, like most companies, are amoral. They're going to go where there's economic opportunity," he adds.

But other conservatives are seething that China is repressing its people with help from US business.

"Claiming that [Internet firms'] dealings with China will make China a more liberal society and more democratic is just playing games" with public perception, says Dana Rohrabacher (R) of California, who supports restrictions for US firms operating in China. "It's clear by now that corporate America is only interested in a buck, in making a fast buck. And if it means assisting Nazis and communists, they'll do it."

Lawmakers are already drafting new legislation. Rep. Christopher Smith (R) of New Jersey, who convened Wednesday's hearing of the House Subcommittee on Africa, Global Human Rights and International Operations, plans to submit legislation calling for an industrywide code for dealing with Chinese authorities. He plans to hold another hearing within two months.

This isn't the first time conservatives have asked whether free markets are always likely to create freer societies. For decades, weaponmakers have had to abide by laws that keep them from selling to hostile nations. And since 1977, companies bound by US law have had to say no to overseas deals where bribery is the necessary cost of doing business. In both cases, US firms have had to forgo economic opportunities in order to advance their country's political priorities abroad.

In China, however, stakes for business are especially high. The world's largest market, with more than a billion people, also ranks among the least expensive locations for manufacturing. And neither American industry nor the federal government is apt to feel it has sufficient leverage to improve Chinese human rights, according to Bruce Unger, a political scientist at Randolph-Macon College in Ashland, Va., who studies US-Sino relations.

"There is within the Republican Party ... a certain appeal to principle and human rights. [But] when you control the White House, with regards to China, it's very, very difficult to take that stand," Professor Unger says. "If you're dealing with a weaker country, you can hold onto principle. It may be easier to succumb to human rights principles when you're dealing with Hamas [in Palestine] than when you're dealing with a Chinese government."

Nevertheless, some conservatives in Congress say the stakes for humanity are just as high as they are for trade and particular industries. There could be dozens or even hundreds of Chinese dissidents doing forced labor in squalid prison camps as a result of American firms' having helped local authorities track them down, Representative Smith says. "We don't want [US firms] to be a part of the tools of repression, which have real-world, horrific consequences of people going to the gulag - or Laogai, as they call it - to be tortured. To think that they're partnering with that kind of repression while putting a gloss on it, [suggesting] that they're part of building democracy, that's unmitigated nonsense."

Both Yahoo and Smith have called on the Bush administration to play a more proactive role in fostering a climate in China where US firms wouldn't have to cooperate with such repressive demands. On Tuesday, Secretary of State Condoleezza Rice established a Global Internet Freedom Task Force to study "use of technology to track and repress dissidents" among other issues.

Meanwhile, conservatives wary of congressional interference are trusting in market forces - including negative publicity - to pressure companies to do what's right in China. Such a position includes a hope that the dynamics of business might include some moral suasion after all.

"I'm not sure Congress should pass a law" to prohibit cooperation with Chinese police, says James Glassman, resident fellow in technology and public policy at the American Enterprise Institute. "But there should be wide exposure of something like that, and if that happened, the company itself would have problems with its customers in the United States."