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China Due Diligence - The Great Firewall Not Just a Political Tool But an Economic One.


Many people misunderstand the Golden Shield. (the official name for the Great Firewall)


Perhaps because of the metaphor of a static unyielding wall belies its dynamic nature of and importantly what it is trying to achieve.


For sure it is a political censor, there is no getting around this however, importantly it is also used to ensure that Chinese business interests are protected. That is strongly favouring domestic brands in preference to foreign owned competitors.


Google, Gmail, Facebook, You Tube and Twitter are all censored in favour of the domestically owned

Baidu, QQ, Wechat, YouKu, and Weibo respectively.


This has important implications for anyone trying to sell goods or services into China via the net.


First thing to realise is that because of the firewall's snooping foreign sites can be slow and unreliable when accessed from within the People's Republic and this varies from day to day.


Second, it is not possible under any circumstances for a foreign owned company to own a ICP (internet communications protocol) licence to host content from within the firewall on Chinese side servers.


Third only 20% of Chinese netizens have VPN (Virtual Private Network) that allows you to bypass the firewall. Most of these users are foreigners working in China or Chinese users educated abroad who are used to accessing content from outside the firewall. Interestingly the biggest growth in use of VPNs by Chinese citizens is to actually get back behind the firewall when they travel abroad to access all the domestic content they are used to.


Perhaps most important of all even if your site currently works reasonably well from behind the firewall its dynamic nature means this won't always be the case. If a foreign site begins to get a significant traffic from within China it's sure to draw attention to itself, especially if money is flowing out of China as a consequence. Guess what happens then !


Remember there is no concept of free market and China's economic miracle is expressly for the benefit of the Chinese and not to be exploited from afar. We've written more the historical antecedents of this mind set in an article here


The upshot of all this is that if you really want to have long term success as a net vendor of anything in China you are going to need a Chinese partner - please choose wisely.

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