The Great Firewall of China

A vastsecurity network and compliant multinationals keep the mainland‘s Netunder Beijing‘s thumb. But technology may foil the censors yet

Skype had a dilemma. The Internet telephony and messaging service wanted to enter China with TOM Online (TOMO), a Beijing company controlled by Hong Kong billionaire Li Ka-shing. Li‘s people told their Skype Technologies (EBAY)partners that, to avoid problems with the Chinese leadership, theyneeded filters to screen out words in text messages deemed offensive byBeijing. No filtering, no service.

At first Skype executives resisted, says a sourcefamiliar with the venture. But after it became clear that Skype had nochoice, the company relented: TOM and Skype now filter phrases such as"Falun Gong" and "Dalai Lama." Neither company would comment on therecord.

VAST MACHINE.  It‘s no secret that Western Internet companies have to hew to the party line if they want to do business in China. Google (GOOG), Yahoo! (YHOO),and scores of other outfits, both domestic and foreign, have madeconcessions to China‘s censors. The latest high-profile example: InDecember, Microsoft‘s (MSFT) MSN shut down a Chinese blogger‘s site at the government‘s request.

Microsoftmaintains it had no choice. "We only remove content if the order comesfrom the appropriate regulatory authority," says Brooke Richardson,group product manager for MSN.

Getting a phone call from thegovernment is one part of the picture. What few Westerners know is thesize and scope of China‘s censorship machine and the process by whichmultinationals, however reluctantly, censor themselves. Few also knowthat China‘s censors have kept up with changing technologies, from cellphone text messaging to blogs.

EYES PEELING. How do the Chinese do it? Beijing has a vast infrastructure oftechnology to keep an eye on any potential online dissent. It alsoapplies lots of human eyeballs to monitoring. The agencies that watchover the Net employ more than 30,000 people to prowl Web sites, blogs,and chat rooms on the lookout for offensive content as well asscammers. In the U.S., by contrast, the entire CIA employs an estimated16,000 people.

Companies, both foreign and domestic, also abetthe government‘s efforts. Virtually all Net outfits on the mainland aregiven a confidential list of hundreds of banned terms they have towatch for. The list changes over time, based on events such as therecent police shootings in the southern town of Dongzhou.

Therules are even tougher for companies that host their sites on serversin China. This group, which has included Yahoo but not Google, arepressured to sign the government‘s "Public Pledge on Self-Disciplinefor the Chinese Internet Industry," the U.S. State Dept. says. Underthe agreement, they promise not to disseminate information that "breakslaws or spreads superstition or obscenity," or that "may jeopardizestate security and disrupt social stability."

Translation: "Ifyou own something, you‘re responsible for what‘s there," says NicholasBequelin, a researcher for Human Rights Watch in Hong Kong. That leadscompanies to "err on the side of caution and self-censorship."

NO "FREEDOM." For those who can‘t see the characters on the wall, Beijing has plentyof backup. All Internet traffic entering or leaving China must passthrough government-controlled gateways -- that is, banks of computers-- where e-mail and Web-site requests are monitored. E-mail withoffending words such as "Taiwan independence" or "democracy" can bepulled aside and trashed.

And when a mainland user tries to opena page that‘s blacklisted, the gateway will simply deny access. Searchfor "Tiananmen Massacre" in China, for example, and 90 of the top 100sites that mention it are blocked, according to the OpenNet Initiative,an Internet watchdog group. The Net operators‘ response? "We are tryingto provide as much information as possible," says Robin Li, chairman ofBaidu.com (BIDU), China‘s top search engine. "But we need to obey Chinese law."

Thecensors are also staying abreast of changes on the Internet. Hackers in2004 found a list of 987 words that were banned from QQ, China‘s topinstant-messaging program. That same year, phone companies were orderedto install software that blocks text messages with offending terms. Andbloggers are barred from posting words such as "freedom" as topics,although they‘re given a bit more leeway in the actual text of theirblog entries.

"WE DON‘T TOUCH POLITICS." Even so, since last summer, bloggers have been required either to posttheir musings on commercial sites that employ filters or to registerwith authorities, making it easier to track down offenders.

Therestrictions have led many companies to make both subtle andsubstantial changes to their operations on the mainland. The Shanghaipodcasting and video blogging service provider Toodou.com checks filesbefore they‘re posted, and users sometimes report objectionablecontent. And IDG Venture Technology Investment, part of Boston‘sInternational Data Group, has invested in a Chinese company thatoperates online bulletin boards on real estate, entertainment,technology, autos, and more. But "we don‘t touch politics at all," saysQuan Zhou, managing director of the group‘s Chinese arm.

China‘sInternet gateways can cause problems even for those companies thatavoid controversial subjects. ILX Media Group, a Greensboro (N.C.)publisher of four Chinese-language medical journals, transmits contentfrom the U.S. to China. But getting complex graphics through Beijing‘sfilters can take days, says Jeffrey Parker, ILX‘s chief operatingofficer in Shanghai. "All traffic has to go through the same meatgrinder," says Parker. Not that such policies deter investors. Parker,for instance, says he‘s upbeat about his prospects there.

KEEPING UP? Despite the power and sophistication of China‘s censors, the march oftechnology may yet foil them. As more sites add podcasts anduser-generated video, China‘s monitoring efforts will become far morecomplicated because it‘s harder to examine such material than it is tocheck text files.

"How do you filter when everybody has thecapability to be their own video blogger?" asks Ross O‘Brien, managingdirector at Intercedent Hong Kong, an IT consulting and research firm.But don‘t underestimate China‘s ability to control the Net, just as ithas done in the past. Although the battle is far from over, the formulaof getting companies to do much of the fighting may keep on servingChina well.