SPEAKERS CONTENTS INSERTS Tables
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26–075PDF
2006
THE INTERNET IN CHINA: A TOOL FOR FREEDOM OR SUPPRESSION?
JOINT HEARING
BEFORE THE
SUBCOMMITTEE ON AFRICA, GLOBAL HUMAN RIGHTS AND INTERNATIONAL OPERATIONS
AND THE
SUBCOMMITTEE ON ASIA AND THE PACIFIC
OF THE
COMMITTEE ON
INTERNATIONAL RELATIONS
HOUSE OF REPRESENTATIVES
ONE HUNDRED NINTH CONGRESS
SECOND SESSION
FEBRUARY 15, 2006
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Serial No. 109–157
Printed for the use of the Committee on International Relations
Available via the World Wide Web: http://www.house.gov/international—relations
COMMITTEE ON INTERNATIONAL RELATIONS
HENRY J. HYDE, Illinois, Chairman
JAMES A. LEACH, Iowa
CHRISTOPHER H. SMITH, New Jersey,
Vice Chairman
DAN BURTON, Indiana
ELTON GALLEGLY, California
ILEANA ROS-LEHTINEN, Florida
DANA ROHRABACHER, California
EDWARD R. ROYCE, California
PETER T. KING, New York
STEVE CHABOT, Ohio
THOMAS G. TANCREDO, Colorado
RON PAUL, Texas
DARRELL ISSA, California
JEFF FLAKE, Arizona
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JO ANN DAVIS, Virginia
MARK GREEN, Wisconsin
JERRY WELLER, Illinois
MIKE PENCE, Indiana
THADDEUS G. McCOTTER, Michigan
KATHERINE HARRIS, Florida
JOE WILSON, South Carolina
JOHN BOOZMAN, Arkansas
J. GRESHAM BARRETT, South Carolina
CONNIE MACK, Florida
JEFF FORTENBERRY, Nebraska
MICHAEL McCAUL, Texas
TED POE, Texas
TOM LANTOS, California
HOWARD L. BERMAN, California
GARY L. ACKERMAN, New York
ENI F.H. FALEOMAVAEGA, American Samoa
DONALD M. PAYNE, New Jersey
SHERROD BROWN, Ohio
BRAD SHERMAN, California
ROBERT WEXLER, Florida
ELIOT L. ENGEL, New York
WILLIAM D. DELAHUNT, Massachusetts
GREGORY W. MEEKS, New York
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BARBARA LEE, California
JOSEPH CROWLEY, New York
EARL BLUMENAUER, Oregon
SHELLEY BERKLEY, Nevada
GRACE F. NAPOLITANO, California
ADAM B. SCHIFF, California
DIANE E. WATSON, California
ADAM SMITH, Washington
BETTY McCOLLUM, Minnesota
BEN CHANDLER, Kentucky
DENNIS A. CARDOZA, California
VACANT
THOMAS E. MOONEY, SR., Staff Director/General Counsel
ROBERT R. KING, Democratic Staff Director
Subcommittee on Africa, Global Human Rights and International Operations
CHRISTOPHER H. SMITH, New Jersey, Chairman
THOMAS G. TANCREDO, Colorado
JEFF FLAKE, Arizona
MARK GREEN, Wisconsin
JOHN BOOZMAN, Arkansas
JEFF FORTENBERRY, Nebraska
EDWARD R. ROYCE, California,
Vice Chairman
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DONALD M. PAYNE, New Jersey
GREGORY W. MEEKS, New York
BARBARA LEE, California
DIANE E. WATSON, California
BETTY McCOLLUM, Minnesota
EARL BLUMENAUER, Oregon
MARY M. NOONAN, Subcommittee Staff Director
GREG SIMPKINS, Subcommittee Professional Staff Member
NOELLE LUSANE, Democratic Professional Staff Member
SHERI A. RICKERT, Subcommittee Professional Staff Member and Counsel
LINDSEY M. PLUMLEY, Staff Associate
Subcommittee on Asia and the Pacific
JAMES A. LEACH, Iowa, Chairman
DAN BURTON, Indiana, Vice Chairman
ELTON GALLEGLY, California
DANA ROHRABACHER, California
STEVE CHABOT, Ohio
RON PAUL, Texas
JOE WILSON, South Carolina
ENI F. H. FALEOMAVAEGA, American Samoa
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SHERROD BROWN, Ohio
EARL BLUMENAUER, Oregon
ADAM SMITH, Washington
GARY L. ACKERMAN, New York
BRAD SHERMAN, California
JAMES W. MCCORMICK, Subcommittee Staff Director
LISA M. WILLIAMS, Democratic Professional Staff Member
DOUGLAS ANDERSON, Professional Staff Member & Counsel
TIERNEN M. DONALD, Staff Associate
C O N T E N T S
WITNESSES
The Honorable David A. Gross, Deputy Assistant Secretary for International Communications and Information Policy, Bureau of Economic and Business Affairs, U.S. Department of State
Mr. James R. Keith, Senior Advisor for China and Mongolia, Bureau of East Asian and Pacific Affairs, U.S. Department of State
Mr. Michael Callahan, Senior Vice President and General Counsel, Yahoo! Inc.
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Mr. Jack Krumholtz, Managing Director of Federal Government Affairs and Associate General Counsel, Microsoft Corporation
Mr. Elliot Schrage, Vice President for Corporate Communications and Public Affairs, Google, Inc.
Mr. Mark Chandler, Vice President and General Counsel, Cisco Systems, Inc.
Mr. Harry Wu, Publisher, China Information Center
Ms. Libby Liu, President, Radio Free Asia
Mr. Xiao Qiang, Director, China Internet Project, University of California-Berkeley
Ms. Lucie Morillon, Washington Representative, Reporters Without Borders
Ms. Sharon Hom, Executive Director, Human Rights in China
LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING
The Honorable Christopher H. Smith, a Representative in Congress from the State of New Jersey, and Chairman, Subcommittee on Africa, Global Human Rights and International Operations: Prepared statement
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The Honorable Dan Burton, a Representative in Congress from the State of Indiana: Prepared statement
The Honorable David A. Gross: Prepared statement
Mr. James R. Keith: Prepared statement
Mr. Michael Callahan: Prepared statement
Mr. Jack Krumholtz: Prepared statement
Mr. Elliot Schrage: Prepared statement
Mr. Mark Chandler: Prepared statement
Mr. Harry Wu: Prepared statement
Ms. Libby Liu: Prepared statement
Mr. Xiao Qiang: Prepared statement
Ms. Lucie Morillon: Prepared statement
Ms. Sharon Hom: Prepared statement
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APPENDIX
Information on United States IT Companies involvement in PRC
Mr. David Jackson, Director, Voice of America: Statement submitted for the record
Uyghur Press Release
Mr. Tom Malinowski, Washington Advocacy Director, Human Rights Watch: Statement submitted for the record
Mr. John G. Palfrey, Jr., Clinical Professor of Law & Executive Director, Berkman Center for Internet & Society, Harvard Law School: Statement submitted for the record
Mr. T. Kumar, Advocacy Director for Asia and the Pacific, Amnesty International USA: Statement submitted for the record
Ms. Ann Cooper, Executive Director, Committee to Protect Journalists: Statement submitted for the record
Mr. Lance M. Cottrell, Global Privacy Advocate, Founder and Chief Scientist, Anonymizer, Inc.: Statement submitted for the record
Joint Investor Statement on Freedom of Expression and the Internet
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Boston Common Asset Management: Statement submitted for the record
Ms. Pam Dixon, Executive Director, World Privacy Forum
Peter Yuan Li, Ph.D: Statement submitted for the record
Ms. Charlotte Oldham-Moore, Director of Government Relations, International Campaign for Tibet: Statement submitted for the record
Responses from the Honorable David A. Gross to questions submitted for the record by the Honorable Christopher H. Smith and the Honorable Thomas G. Tancredo, a Representative in Congress from the State of Colorado
Responses from Mr. Elliot Schrage to questions submitted for the record by the Honorable Christopher H. Smith and the Honorable Thomas G. Tancredo
Responses from Mr. Mark Chandler to questions submitted for the record by the Honorable Christopher H. Smith and the Honorable Thomas G. Tancredo
Responses from Mr. Jack Krumholtz to questions submitted for the record by the Honorable Christopher H. Smith and the Honorable Thomas G. Tancredo
THE INTERNET IN CHINA: A TOOL FOR FREEDOM OR SUPPRESSION?
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WEDNESDAY, FEBRUARY 15, 2006
House of Representatives,
Subcommittee on Africa, Global Human Rights
and International Operations,
Subcommittee on Asia and the Pacific,
Committee on International Relations,
Washington, DC.
The Subcommittee met, pursuant to notice, at 10 o'clock a.m. in room 2172, Rayburn House Office Building, Hon. Christopher H. Smith of New Jersey [Chairman of the Subcommittee on Africa, Global Human Rights and International Operations] presiding, and James A. Leach [Chairman of Subcommittee on Asia and the Pacific] present.
Mr. SMITH OF NEW JERSEY. The Committee will come to order. Good morning and welcome to this hearing on the Internet in China. We are here to examine a problem that is deeply troubling to me and, I believe, to the American people, and that is that American technology and know-how is substantially enabling repressive regimes in China and elsewhere in the world to cruelly exploit and abuse their own citizens.
Over the years, I have held and chaired 25 hearings on human rights abuses in China, and while China's economy has improved somewhat, the human rights situation remains abysmal. So-called ''economic reform'' has utterly failed to result in the protection of freedom of speech, expression, or assembly. The Laogai system of forced labor camps is still full to capacity, with an estimated 6 million people; the Chinese Government which permits a horrifying trade in human organs continues unabated; the PRC's draconian, one-child-per-couple policy has made brothers and sisters illegal and coerced abortion commonplace; and political and religious dissidents are systematically persecuted and tortured.
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Similarly, while the Internet has opened up commercial opportunities and provided access to vast amounts of information for people the world over, the Internet has also become a malicious tool, a cyber-sledgehammer of repression of the Government of the People's Republic of China. As soon as the promise of the Internet began to be fulfilled, when brave Chinese began to e-mail each other around the world about human rights issues and corruption by government leaders, the party cracked down. To date, an estimated 49 cyber-dissidents and some 32 journalists have been imprisoned by the PRC for merely posting information on the Internet critical of the regime. And, frankly, that is likely to be only the tip of the iceberg.
Tragically, history shows us that American companies and their subsidiaries have provided the technology to crush human rights in the past. Edwin Black's book, IBM and the Holocaust, reveals the dark story of IBM's strategic alliance with Nazi Germany. Thanks to IBM's enabling technologies, from programs for identification and cataloging to the use of IBM's punch card technology, Hitler and the Third Reich were able to automate the genocide of the Jews. And I would recommend to anyone who is interested to read this book. It is a very, very incisive commentary on how that collaboration worked.
U.S. technology companies today are engaged in a similar sickening collaboration, decapitating the voice of the dissidents. In 2005, Yahoo!'s cooperation with Chinese secret police led to the imprisonment of cyber-dissident Shi Tao. And this was not the first time. According to Reporters Without Borders, Yahoo! also handed over data to Chinese authorities on another of its users, Li Zhi. Li Zhi was sentenced on December 10, 2003, to 8 years in prison for inciting subversion. His ''crime'' was criticizing in online discussion groups and articles the well-known corruption of local officials.
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Women and men are going to the gulag and being tortured as a direct result of information handed over to Chinese officials. When Yahoo! was asked to explain its actions, Yahoo! said that it must adhere to local laws in all countries where it operates. But my response to that is, if the secret police, a half century ago, asked where Anne Frank was hiding, would the correct answer be to hand over the information in order to comply with local laws? Again, these are not victimless crimes that the Chinese secret police are committing, and I believe we must stand with the oppressed and not with the oppressors.
I was recently on a news show talking about Google and China. The question was asked, ''Should it be business's concern to promote democracy in foreign nations?'' While that would be great, that is not necessarily the right question. The more appropriate question today is, ''Should businesses enable the continuation of repressive dictatorships by partnering with a corrupt and cruel secret police and by cooperating with laws that violate basic human rights?''
I believe that two of the most essential pillars that prop up totalitarian regimes are the secret police and propaganda. Yet for the sake of market share and profits, leading U.S. companies, like Google, Yahoo!, Cisco, and Microsoft, have compromised both the integrity of their product and their duties as responsible corporate citizens. They have, indeed, aided and abetted the Chinese regime to prop up both of these pillars, secret police and propaganda, propagating the message of the dictatorship unabated and supporting the secret police in a myriad of ways, including surveillance and invasion of privacy, in order to effectuate the massive crackdown on its citizens.
Through an approach that monitors, filters, and blocks content with the use of technology and human monitors, the Chinese people have little access to uncensored information about any political or human rights topic, unless, of course, Big Brother wants you to see it. Google.cn, China's search engine, is guaranteed to take you to the virtual land of deceit, disinformation, and the big lie. As such, the Chinese Government utilizes the technology of United States IT companies combined with human censors, led by an estimated force of 30,000 cyber police, to control information in China.
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Web sites that provide the Chinese people with news about their country and the world, such as the BCC, much of CCN, as well as Voice of America and Radio Free Asia, are routinely blocked in China. In addition, when a user enters a forbidden word, such as ''democracy'' or ''Chinese torture'' or ''Falun Gong,'' the search results are blocked, or you are redirected to a misleading site, and the user's computer can be frozen for unspecified periods of time.
Cisco has provided the Chinese Government with the technology necessary to filter Internet content through its creation of Police Net, one of the tools the regime uses to control the Internet. Cisco holds 60 percent of the Chinese market for routers, switches, and other sophisticated networking gear, and its estimated revenue from China, according to Derek Bambauer of Legal Affairs, is estimated to be $500 million annually. Yet Cisco has also done little creative thinking to try to minimize the likelihood that its products will be used repressively, such as limiting eavesdropping abilities to specific computer addresses.
Similarly, Google censors what is euphemistically called ''politically sensitive'' terms like ''democracy,'' ''China human rights,'' and ''China torture'' on the new Chinese search site, Google.cn. Let us take a look at what that means in practice. A search for terms such as ''Tiananmen Square'' produces two very different results. The one from Google.cn shows a picture of a smiling company, but the results from Google.com show scores of photos depicting the mayhem and brutality of the 1989 Tiananmen Square massacre.
Another example: Let us look at ''China and torture.'' Google has said that some information is better than nothing, but in this case, the limited information displayed amounts to disinformation. A half truth is not the truth; it is a lie, and a lie is worse than nothing. It is hard not to draw the conclusion that Google has seriously compromised its ''Don't Be Evil'' policy. Indeed, it has become evil's accomplice, and hopefully that will change.
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Not surprisingly, Americans, not just Chinese, are also victims of this censorship. On an informal request from the Chinese Government, Microsoft, on December 30, 2005, shut down the blog of Zhao Jing because the content of Zhao's blog on MSN Spaces was offensive to the PRC. This hearing, no doubt, is offensive to the PRC, and the Chinese people will never hear about this either.
Zhao had tried to organize a walk-off of journalists at the Beijing News after their editor was fired for reporting on clashes between Chinese citizens and police in southern China. However, Microsoft shut down the blog not only in China but everywhere. It not only censored Chinese access to information but American access to information, a step that it only recently pulled back from. Like Yahoo!, MSN defended its decision by asserting that MSN is committed to complying with ''local laws, norms, and industry practices in China.'' Regrettably, I have been unable to find an MSN statement on its commitment to global human rights laws, norms, and industry practices that do promote fundamental human rights.
I can tell you, ladies and gentlemen, standing for human rights has never been easy. It is never without cost. It seems that companies have always resisted having to abide by ethical standards, yet we have seen the success of such agreements as the Sullivan principles in South Africa and the MacBride principles in Northern Ireland.
I, and many of my colleagues on both sides of the aisle, would welcome leadership by the corporations to develop a code of conduct which would spell out how they could operate in China and other repressive countries like Vietnam while not harming citizens and respecting human rights. But I believe our Government also has a major role to play in this critical area and that a more comprehensive framework is needed to protect and promote human rights, and that is why I intend to introduce the Global Online Freedom Act of 2006 within the next couple of days to promote freedom of expression on the Internet.
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Let me also point out that there are some encouraging and innovative public and private efforts already underway in this area. Electronic Frontier Foundation, for example, allows Windows-based computers to become proxies for Internet users, circumventing local Internet restrictions. Through the efforts of the U.S. Broadcasting Board of Governors fund of a mere $100,000, VOA and Radio Free Asia's Web sites are accessible to Chinese Internet users through proxy servers because of the technology of Dynaweb and UltraReach.
Earlier this month, the technology firm, Anonymizer, announced that it is developing a new, anticensorship technology that will enable Chinese citizens to safely access the entire Internet, filter free. The solution will be to provide a regularly changing URL so that users can likely access the uncensored Internet, although nothing is guaranteed. In addition, users' identities are apparently protected from online monitoring by the Chinese regime. Lance Cottrell of the company has said it ''is not willing to sit idly by while the freedom of the Internet is slowly crushed. We take pride in the fact,'' he went on to say, ''that our online privacy and security solutions provide access to global information for those under the thumb of repressive regimes.''
In conclusion, I hope this hearing might also be the beginning of a different sort of dialogue: A discussion on how high-tech firms can partner with the U.S. Government and human rights activists all over the globe to bring down the Great Firewall of China or firewalls anywhere else where there is a repressive country, and on how America's greatest software engineers can use their intelligence to create innovative, new products to protect dissidents rather than to provide the dragnet to capture, to incarcerate, and to torture these dissidents, and, of course, to promote human rights.
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I would now like to yield to the distinguished Ranking Member, a good friend and colleague from California who is also a leader in human rights and a leader on this issue, my friend, Tom Lantos, for any time he may desire.
[The prepared statement of Mr. Smith of New Jersey follows:]
PREPARED STATEMENT OF THE HONORABLE CHRISTOPHER H. SMITH, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF NEW JERSEY AND CHAIRMAN, SUBCOMMITTEE ON AFRICA, GLOBAL HUMAN RIGHTS AND INTERNATIONAL OPERATIONS
Good morning and welcome to this hearing on the Internet in China. We are here to examine a problem that is deeply troubling to me, and I believe, to the American people: that American technology and know-how is substantially enabling repressive regimes in China and elsewhere in the world to cruelly exploit and abuse their own citizens.
Over the years, I have held 25 hearings on human rights abuses in China, and while China's economy has improved somewhat, the human rights situation remains abysmal. So-called economic reform has utterly failed to result in the protection of freedom of speech, expression, or assembly. The Laogai system of forced labor camps is still full with an estimated 6 million people; the Chinese government permits a horrifying trade in human organs; the PRC's draconian one-child per couple policy has made brothers and sisters illegal and coerced abortion commonplace; and political and religious dissidents are systematically persecuted and tortured.
Similarly, while the internet has opened up commercial opportunities and provided access to vast amounts of information for people the world over, the internet has also become a malicious tool: a cyber sledgehammer of repression of the government of China. As soon as the promise of the Internet began to be fulfilled—when brave Chinese began to email each other and others about human rights issues and corruption by government leaders—the Party cracked down. To date, an estimated 49 cyber-dissidents and 32 journalists have been imprisoned by the PRC for merely posting information on the Internet critical of the regime. And that's likely to be only the tip of the iceberg.
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Tragically, history shows us that American companies and their subsidiaries have provided the technology to crush human rights in the past. Edwin Black's book IBM and the Holocaust reveals the dark story of IBM's strategic alliance with Nazi Germany. Thanks to IBM's enabling technologies, from programs for identification and cataloging to the use of IBM's punch card technology, Hitler and the Third Reich were able to automate the genocide of the Jews.
U.S. technology companies today are engaged in a similar sickening collaboration, decapitating the voice of the dissidents. In 2005, Yahoo's cooperation with Chinese secret police led to the imprisonment of the cyber-dissident Shi Tao. And this was not the first time. According to Reporters Without Borders, Yahoo also handed over data to Chinese authorities on another of its users, Li Zhi . Li Zhi was sentenced on December 10, 2003 to eight years in prison for ''inciting subversion.'' His ''crime'' was to criticize in online discussion groups and articles the well-known corruption of local officials.
Women and men are going to the gulag and being tortured as a direct result of information handed over to Chinese officials. When Yahoo was asked to explain its actions, Yahoo said that it must adhere to local laws in all countries where it operates. But my response to that is: if the secret police a half century ago asked where Anne Frank was hiding, would the correct answer be to hand over the information in order to comply with local laws? These are not victimless crimes. We must stand with the oppressed, not the oppressors.
I was recently on a news show talking about Google and China. The question was asked, ''Should it be business' concern to promote democracy in foreign nations?'' That's not necessarily the right question. The more appropriate question today is, ''Should business enable the continuation of repressive dictatorships by partnering with a corrupt and cruel secret police and by cooperating with laws that violate basic human rights?''
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I believe that two of the most essential pillars that prop up totalitarian regimes are the secret police and propaganda. Yet for the sake of market share and profits, leading U.S. companies like Google, Yahoo, Cisco and Microsoft have compromised both the integrity of their product and their duties as responsible corporate citizens. They have aided and abetted the Chinese regime to prop up both of these pillars, propagating the message of the dictatorship unabated and supporting the secret police in a myriad of ways, including surveillance and invasion of privacy, in order to effectuate the massive crackdown on its citizens.
Through an approach that monitors, filters, and blocks content with the use of technology and human monitors, the Chinese people have little access to uncensored information about any political or human rights topic, unless of course, Big Brother wants them to see it. Google.cn, China's search engine, is guaranteed to take you to the virtual land of deceit, disinformation and the big lie. As such, the Chinese government utilizes the technology of U.S. IT companies combined with human censors—led by an estimated force of 30,000 cyber police—to control information in China. Websites that provide the Chinese people news about their country and the world, such as BBC, much of CNN, as well as Voice of America and Radio Free Asia, are regularly blocked in China. In addition, when a user enters a forbidden word, such as ''democracy,'' ''China torture'' or ''Falun Gong,'' the search results are blocked, or you are redirected to a misleading site, and the user's computer can be frozen for unspecified periods of time.
Cisco has provided the Chinese government with the technology necessary to filter internet content through its creation of Policenet, one of the tools the regime uses to control the internet. Cisco holds 60 percent of the Chinese market for routers, switches, and other sophisticated networking gear, and its estimated revenue from China, according to Derek Bambauer of Legal Affairs, is estimated to be $500 million annually. Yet Cisco has also done little creative thinking to try to minimize the likelihood that its products will be used repressively, such as limiting eavesdropping abilities to specific computer addresses.
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Similarly, Google censors what are euphemistically called ''politically sensitive'' terms, such as ''democracy,'' ''China human rights,'' ''China torture'' and the like on its new Chinese search site, Google.cn. Let's take a look at what this means in practice. A search for terms such as ''Tiananmen Square'' produces two very different results. The one from Google.cn shows a picture of a smiling couple, but the results from Google.com show scores of photos depicting the mayhem and brutality of the 1989 Tiananmen square massacre. Another example: let's look at ''China and torture.'' Google has said that some information is better than nothing. But in this case, the limited information displayed amounts to disinformation. A half truth is not the truth—it is a lie. And a lie is worse than nothing. It is hard not to draw the conclusion that Google has seriously compromised its ''Don't Be Evil'' policy. It has become evil's accomplice.
Not surprisingly, Americans, not just Chinese, are also the victims of this censorship. On an informal request from the Chinese government, Microsoft on December 30, 2005 shut down the blog of Zhao Jing because the content of Zhao's blog on MSN Spaces was offensive to the PRC. Zhao had tried to organize a walk-off of journalists at the Beijing News after their editor was fired for reporting on clashes between Chinese citizens and police in southern China. However, Microsoft shut down the blog not only in China, but everywhere. It not only censored Chinese access to information, but American access to information, a step it has only recently pulled back from. Like Yahoo, MSN defended its decision by asserting that MSN is committed to complying with ''local laws, norms, and industry practices in China.'' Regrettably, I haven't been able to find an MSN statement on its commitment to global laws, norms, and industry practices protecting human rights in China.
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Standing for human rights has never been easy or without cost. It seems that companies have always resisted having to abide by ethical standards, yet we have seen the success of such agreements as the Sullivan principles in South Africa and MacBride principles in Northern Ireland. I, and many of my colleagues on both sides of the aisle, would welcome leadership by the corporations to develop a code of conduct which would spell out how they could operate in China and other repressive countries while not harming citizens and respecting human rights. But I believe our government also has a major role to play in this critical area, and that a more comprehensive framework is needed to protect and promote human rights. This is why I intend to introduce The Global Online Freedom Act of 2006 in the coming week to promote freedom of expression on the internet.
There are some encouraging and innovative public and private efforts already underway in this area. Electronic Frontier Foundation, for instance, allows Windows-based computers to become proxies for internet users, circumventing local Internet restrictions. Through the efforts of the U.S. Broadcasting Board of Governors' fund of a mere $100,000, VOA and Radio Free Asia's websites are accessible to Chinese internet users through proxy servers because of the technology of Dynaweb and UltraReach.
Earlier this month, the technology firm Anonymizer announced that it is developing a new anti-censorship technology that will enable Chinese citizens to safely access the entire Internet filter-free. The solution will provide a regularly changing URL so that users can likely access the uncensored internet. In addition, users' identities are apparently protected from online monitoring by the Chinese regime. Lance Cottrell of Anonymizer said it ''is not willing to sit idly by while the freedom of the Internet is slowly crushed. We take pride in the fact that our online privacy and security solutions provide access to global information for those under the thumb of repressive regimes.''
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In conclusion, I hope this hearing might be the beginning of a different sort of dialogue—a discussion on how American high-tech firms can partner with the U.S. government and human rights activists to bring down the Great Firewall of China, and on how America's greatest software engineers can use their intelligence to create innovative new products to protect dissidents and promote human rights.
John Aird Statement
I would like to take this opportunity to recognize and honor the work of Dr. John S. Aird, a distinguished American whose immeasurable contributions as a scholar, population expert, and defender of human rights have changed the lives of so many over the course of his career.
It was with great sadness that I learned of Dr. Aird's death last October. His passing represents a grave loss for all of us who are committed to ensuring human rights around the world, and his tremendous work in this and other fields will not be forgotten.
Dr. Aird, former Senior Research Specialist on China at the U.S. Census Bureau, served for 28 years as that organization's resident expert on the population of China. He was a forthright and vehement critic of the Chinese government's coercive one-child family planning policy.
During his retirement, Dr. Aird worked as a full-time volunteer. He provided expert testimony in immigration courts for 415 families, helping Chinese citizens fleeing their country's coercive family planning programming to secure asylum in the United States.
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John S. Aird was truly one of the most informed and outspoken opponents of China's one-child policy. He testified before this and other Congressional committees on numerous occasions, and I believe my colleagues would join me in saying that his insights were consistently persuasive and well-considered, and proved invaluable to our work on human rights in China.
I would also like to acknowledge today the presence of Dr. Aird's wife of more than 58 years, Mrs. Laurel J. Aird, who has graciously joined us for this important hearing which will continue the course on human rights in China that Dr. Aird helped to chart with his work.
Mr. LANTOS. Thank you very much, Mr. Chairman. I want to commend you for an outstanding, comprehensive statement, and I want to express my appreciation to Chairman Leach and you for affording me the opportunity to say a few words.
Before I come to my foremost statement, let me stipulate for the record the obvious. We work with China on a wide range of issues, ranging from North Korea to Iran, and I very much welcome the opportunity of working with this new and emerging superpower.
Let me also say that I am fully aware of the very important, positive developments that the high-tech companies brought to China. But that is not the topic of our discussion this morning.
The hi-tech companies before the Committee today—Yahoo!, Microsoft, Cisco, and Google—are truly the best in the business. In our open and democratic system, based on our Constitutional guarantee of freedom of expression, these firms have thrived, and their founders have amassed enormous wealth, enormous influence, enormous prestige, but apparently very little social responsibility. Instead of using their power and creativity to bring openness and free speech to China, they have caved in to Beijing's outrageous but predictable demands simply for the sake of profits.
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These captains of industry should have been developing new technologies to bypass the sickening censorship of government and repugnant barriers to the Internet. Instead, they enthusiastically volunteered for the Chinese censorship brigade. After initially resisting appearing before Congress, representatives of these companies have come to us today to share their side of things. While some of these firms have been operating in China for years, they have suddenly discovered the need for high-sounding documents which simultaneously affirm their respect for freedom of communication and, at the same time, their complete compliance with repressive laws in China.
In the future, when you type the word ''oxymoron'' in a search engine, you will find the names of Google, Microsoft, Yahoo!, and Cisco. These companies need to do more than show ''virtual'' backbone. What Congress is looking for is real spine and a willingness to stand up to the outrageous demands of a totalitarian regime. My message to these companies today is simple. Your abhorrent activities in China are a disgrace. I simply do not understand how your corporate leadership sleeps at night.
Let me start with Yahoo!. As we meet today, Chinese citizens who have the courage to speak their minds on the Internet are in the Chinese gulag because Yahoo! chose to reveal their identities to the Chinese Government. It is bad enough that Beijing is so petrified of dissent that it throws dissidents behind bars for years on end and blacklists their families. But it is beyond comprehension that an American company would play the role of willing accomplice in the Chinese suppression apparatus.
Google and Microsoft similarly argue that they must comply with Chinese laws that prohibit online discussions and searching of certain ''sensitive subjects.'' So they have elected to become surrogate government censors, removing content and blocking information that offends the exquisite political sensitivities of the ruling elite in Beijing. Google often cites its adherence to German laws that prohibit neo-Nazi propaganda. This value-free excuse truly sickens me. Germany is a political democracy, and its freely elected leaders prohibited the hate mongering that three generations ago led to Auschwitz. To pretend to argue that this is analogous to the Chinese situation is beneath contempt.
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China has a rubber-stamp Parliament, and the Chinese Government places severe, uncompromising restrictions on freedom of speech and religious liberty. For Google's leaders, who made billions in a free and open society, to become Beijing's censors and agents of repression is unconscionable. They clearly have no moral dilemmas while censoring the suppressed Tibetans and members of the Falun Gong, both persecuted minorities in China. Do these companies have any standards at all?
If tomorrow another repressive government demands that Google block all access to women who want to use e-mail or blogs, will Google comply? What about a Sudanese request to block information on the ongoing genocide in Darfur?
These companies tell us that they will change China, but China has already changed them. Despite their protestations, their suddenly-concocted statements of principle, and an avalanche of press releases, it is clear to all objective observers that if we in Congress had not shined the spotlight on their collusion with Chinese censors, these companies would have continued their nauseating collaboration with a regime of repression. They need to stand with us and fight oppression in China and everywhere where they intend to do business. Thank you, Mr. Chairman.
Mr. SMITH OF NEW JERSEY. Thank you very much, Mr. Lantos.
The Chair recognizes Chairman Leach.
Mr. LEACH. Thank you, Mr. Chairman. I am pleased to join you in convening this hearing, and I would just like to note, in addition to chairing the Asia Subcommittee, I Co-Chair the Congressional Executive Commission on China. I raise this because I would like to note the ground-breaking work that the commission's staff has done on the China Internet issue during the past 4 years. They have assembled an unparalleled data base of English-language resources, including human rights reporting and translations of applicable Chinese laws and regulations which are available on the front page of the commission Web site, which is cecc.gov. I commend these materials to the attention of my colleagues and members of the public who are interested in an understanding of these issues.
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As highlighted in the commission's annual report, Chinese citizens face increased government regulation of the Internet, and as we all know, censorship is seldom helpful to any society. We live in an era in which the advancement of human understanding and the growth of the global economy cannot operate effectively without the broadest possible dissemination of knowledge. Ultimately, the Chinese Government may not be able to stem the tide of information unleashed by new technologies and by the growing expectations and sophistication of its own public, but in the meantime, the situation of freedom of expression in China remains problematic.
This may be a particularly awkward week for the United States to raise human rights concerns about another country, given the UN draft report on Guantanamo as well as the continued ramification of instances at Abu Ghraib, but, nonetheless, there are issues in United States-China relations that cannot be ducked, particularly when they involve the responsibilities of U.S. corporations.
During the past year, the Chinese Communist Party has improved its ability to silence and control political discussion on the Internet. Public security authorities have detained and imprisoned dozens of journalists, editors, and writers and shut down one-quarter of the private Web sites in China for failing to register with the government. These actions by Chinese officials have implications not only for China but also for the integrity of the Internet itself as a worldwide forum allowing the free and instantaneous exchange of information.
According to China's own state-run media, it has put together the world's most extensive and comprehensive regulatory system for Internet administration and has perfected a 24-hour, real-time, situational censorship mechanism. A Chinese Government delegate to the UN Working Group on Internet Governance has even been quoted as hoping that China's experience can act as a lesson for the global Internet governance.
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These issues bear directly on the development of the rule of law within China. Article 35 of the Chinese Constitution guarantees Chinese citizens freedom of speech and of the press. Any restrictions to these Constitutional rights should be openly legislated and transparently applied. In reality, restrictions imposed by officials are premised upon ill-defined concepts of social stability, state security, and sedition that mask what is, in fact, mere intolerance of dissent.
Interestingly, it was reported yesterday that a number of senior Chinese ex-officials, including Mao's secretary and a former editor in chief of the People's Daily, have courageously issued a public letter warning that depriving the public of freedom of expression will sow the seeds of disaster for a peaceful political transformation in China. The international community should forge a common voice to urge the Chinese Government to cease its political censorship of the Internet. In this regard, Secretary of State Rice's announcement yesterday that she is establishing a new, global, Internet freedom task force appears to be a constructive initiative.
In this context, some American technology companies have been the focus of recent public attention because of allegations that they have become complicit in the restrictive activities of the Chinese security apparatus. Industry representatives have volunteered to appear today, and this Committee looks forward to hearing their perspective.
I understand that much of the technical architecture of the Internet is substantively agnostic. The same capacities that enable network administrators to protect systems against destructive viruses and allow parents to protect their children from pornography also potentially enable political censorship and the monitoring of dissidents. As with so many technologies, the potential for good or ill depends largely on the intent of the user. Thus, the challenge is to maintain the promise of the technology while also refusing to internalize the intent of those who would use those capacities to restrict the parameters of discussion based on its peaceful political intent.
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From this perspective, certain corporate activities appear at first blush to be difficult. For example, it is problematic to see how altering one's search engine to exclude politically sensitive materials is anything other than voluntary cooperation in content-based censorship by Chinese authorities. The same would appear to be true for the removal or blocking of politically sensitive Web blogs or other documents. The potential conflict between censorship and the provision of alternative news is perhaps most acute with regard to Radio Free Asia and Voice of America.
On a human level, the moral hazard of locating Internet operations inside China are most visible in the cases of Li Zhi and Shi Tao, online writers who were sentenced to 8 and 10 years, respectively, after information allegedly provided by one Internet service provider reportedly enabled Chinese authorities to personally identify and publish them. Such activities have coercive ramifications for individuals and individual rights in China and unhealthful ramifications for advancing the rule of law in that country.
What is interesting in the censorship practices of American companies is that the censorship practices of American companies do not represent attempts to uphold the rhetoric of the Chinese Constitution. Rather, they are undertaken in response to, or in anticipation of, a threat of commercial or criminal reprisals by the Chinese Government which contravene their own Constitution.
It is presently impossible to gauge the leverage that American companies possess inside China because many of the limitations they observed are self-imposed and were apparently influenced by but not negotiated with Chinese authorities. By preemptively altering their online products to conform with the predilections of Chinese censors, those companies may be diluting the liberalizing pressure created by the desire of the Chinese people to use their original, unaltered products.
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To note one example, when China temporarily shut down access to Google.com, a significant public outcry developed which helped lead to the eventual restoration of that search service. I worry that by providing a sanitized, sensitized version of Google, that company may be allowing Chinese censors to avoid the public pressure that otherwise would result from their restriction decisions.
Citizens of China are willing to risk jail for freedom of expression when certain American companies are unwilling to risk profits for the same principles.
In conclusion, the Internet is an unprecedented tool for the advancement and utilization of knowledge. American search engines and content hosts are considered the most sophisticated in the world. All of us, governments and industries and concerned citizens, should work together to ensure that citizens of China and elsewhere are not denied access to these tools. Thank you, Mr. Chairman.
Mr. SMITH OF NEW JERSEY. Chairman Leach, thank you so very much for that very eloquent statement.
The Chair recognizes the Ranking Member from American Samoa, Mr. Faleomavaega.
Mr. FALEOMAVAEGA. Thank you, Mr. Chairman. I also want to commend you and Chairman Leach for calling this joint hearing together and certainly compliment our senior Ranking Member on our Committee, Mr. Lantos, for his eloquent statement.
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Mr. Chairman, before I proceed also with my formal statement as I have prepared this morning, I just want to offer a couple of observations, if I may, in terms of the statements that have been presented before our joint Subcommittee hearing this morning.
If there is one word that I offer my sense of what limited knowledge that I have and understanding of the situation that we are faced with not only in China but throughout the Asia-Pacific region, I suppose as someone who is a Member of this Committee who probably is the only Member of the Committee whose roots is from the Asia-Pacific region, I have, I suppose you might say, a different historical perspective.
When we look at the broad picture in terms of the Asia-Pacific region and its experience, transitioning is what I look at in the period of the last 60 or 70 years. The fact of the matter is when China first became independent in 1949, with over 400 million Chinese living at the time, and you look at the fact that here we are barely experiencing the fact that we are almost 300 million after establishing our own sense of democracy, less than 300 years, over the last 250 years, our population is less than 300 million. Now, the People's Republic of China has 1.3 billion people.
To me, regardless of how you label the kind of system of government that the Chinese leaders and the people have established thus far, the fact of the matter is I have to give them some sense of credit. How do you provide a system of government to feed 1.3 billion people out there, whether it is a democratic form or what? I would like to use the word ''transitioning'' probably as the best way that I could describe.
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The fact of the matter, Mr. Chairman, is the Asia-Pacific region has gone through tremendous transitioning. Some of the dialogue that we have had in the times past in this Committee looking at the fact that colonialism was not a bad word 60 or 70 years ago, except for the most repressive administrations toward some of these countries that we now find ourselves in the Asia-Pacific region: The French in Vietnam, the British in China, the Dutch in Indonesia, for some 350 years the most brutal colonial experiences that the Asia-Pacific countries have experienced.
I suppose one reason I ask sometimes my colleagues, why do you suppose a lot of these Asian leaders end up becoming Marxist socialists? That is because the worst examples of democracy are those supposedly exemplified by the western nations that extolled some principles of democracy during the period of colonialism who were out there carving empires did not paint a very pretty picture, in my humble opinion, in terms of the experiences that the Asia-Pacific have experienced at that period of time.
So there is one word that I would like to share with my colleagues. China is transitioning. Internet technology was introduced in China in the mid-1990s. According to the People's Republic of China data, the number of Internet users in China, not including Hong Kong, Macau, and Taiwan, reached over 111 million in 2005, making China the second-largest Internet population in the world. Internet usage is expected to rise as China continues to promote Internet development and enjoy rapid economic growth notwithstanding that the PRC Government strictly controls news and political content online, which has drawn the attention and criticism of many analysts and my colleagues here as policymakers from our country.
Frankly, I do want to commend China for controlling pornographic, violence-related, gambling, and other harmful information. At issue today is whether or not United States investment in China's Internet industry has led to the greater flow of global information in the country or whether or not United States corporations are overlooking violations of freedom of expression in China in order to maximize their profits.
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Today, United States Internet companies in China reportedly are considering how to develop common responses that would attempt to strike a balance between promoting freedom of expression and operating within an authoritarian political system. Like former Secretaries of State James Baker and Madeleine Albright, I also believe that the growth of the Internet and other information technologies will help bring about wide-scale democratization abroad. As one from the Asia-Pacific region, I also believe the United States should be respectful of growing democracies, as I commend the U.S. corporations who are working to bring this about.
I believe it was Tom Friedman's recently written book, The World Is Flat, that presents an interesting observation about the scale on the globalization aspects of looking at information technology. It kind of had its beginning among nations then among the corporations. Now, it is with the individual. An individual in China can directly communicate with individuals here in America or any other part of the world.
It seems that with information and freedom of the press, we have some of our own problems. Why the New York Times was told for 1 whole year not to present its, I guess you might call, little leak about domestic surveillance because of our national security in place, which now raises a very interesting question about the right of the public to know whether or not the Administration can conduct domestic surveillance without having to get warrants from the Court.
A very interesting situation in our own country calling about freedom of expression and how we are having to go through this interesting debate about the Fourth Estate and its right to tell the public what is happening, causing at least this Member to raise issues in our own country when we talk about freedom of expression, why the New York Times took a whole year. Why did it prompt them all of a all of a sudden to say, well, I guess we had better tell them our sources, telling that there has been domestic surveillance these past 4 years by the Administration without having to get a warrant, a very interesting issue that we are debating in our own country about freedom of expression.
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With that, Mr. Chairman, I want to just share that observation with my colleagues and look forward to hearing from our witnesses at the State Department as well as from our corporate community. Thank you, Mr. Chairman.
Mr. SMITH OF NEW JERSEY. I thank my colleague.
The Chair recognizes Chairman Rohrabacher.
Mr. ROHRABACHER. Thank you, Chairman Smith, Chairman Leach, and Mr. Lantos, who again shows us that Republicans and Democrats share the ideals that are at the heart of our Government here in Washington, DC. Let me note if there is any question of transition going on and what direction transition is going.
What we are discussing today would indicate that China is in transition in the wrong direction, which is of utmost importance to the future of the United States and the stability of the world as well as to the people of China. Let me note that, yes, in a free society, when a free society is attacked, and a war is declared upon them by radical Islam, which we now face, certain things are permitted that would not be permitted otherwise. Yet this is no comparison to China, which is a government which is at war with its own people.
Corporate America, in dealing with these situations in the past, has a dismal human rights record. Now, whether it is Google or Yahoo! or any other, and we are not just picking on these particular high-tech companies, but any number of multibillion-dollar corporations who are doing business in China, they are carrying on this tradition of making a buck with no consideration for human rights or the American ideals that we supposedly all share. Again, we see a betrayal of America's ideals and an undercutting of those who are struggling for democracy and freedom in China. Not only, let me note, are China and the Chinese freedom of those people being undermined, but so are the long-term chances of peace between the United States and China and the stability of the world.
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As I say, this is, again, a shameful act which we have seen so many times in corporate America, helping tyrants oppress their people, and now they do it again in an age of high technology, which shows us that technological development and sophistication of development, because we have been told all we need to do is help develop China's economy, and they are going to become more liberal, and here we see high technology and the development of industry in China is leading to more repression.
It is amazing to me that an American Internet company cannot connect the dots between profit and free and unfettered access to ideas. It is incomprehensible how they fail to see and to understand the implications to their own financial future by colluding with Chinese authorities to track down pro-democracy advocates or by setting up firewalls against such offending words as ''independent judiciary'' or ''democracy.'' If and when China becomes a democracy, and those brave souls who are struggling now for freedom in these desperate circumstances in China, if they manage to overthrow their oppressor, these companies will be the first to be booted out by those who remember their betrayal and hypocrisy.
Today, we have in the audience an American citizen who happens to be a Falun Gong practitioner, Mr. Huan Lee. Before last week, he operated out of his home in Atlanta through his laptops communicating with people in China to help them get around the Internet firewalls that American companies have established. Well, he and other computer experts in Falun Gong have developed cutting-edge, antiblockage applications and technology of their own especially designed to help overcome these obstacles.
Well, last week, Mr. Lee, an American citizen, in his home in Atlanta, was attacked by Korean- and Chinese-speaking men. He was bound and tied and wrapped in a blanket and beaten. He needed stitches in his face. When I met him yesterday, his face was still black and blue. Then they asked in Chinese where his files were and took his computers, a hard disk, a cell phone, and his briefcase. Law enforcement authorities are investigating this attack, but at present the perpetrators remain at large.
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Of course, in China, this would be common. What would be uncommon is that Mr. Lee would still be here. Mr. Lee, you are a hero of freedom. You are an American, and thus you are an American hero of freedom. I would ask you to stand for one moment. [Applause.]
Gentlemen—keep standing, Mr. Lee, for 1 minute—you have to choose between Mr. Lee and people like him in China who believe in our ideals as Americans and choosing between a gangster regime that beats people up and has heinous acts of oppression against their own people. It is your choice. Unfortunately, it appears that corporate America and you gentlemen have made the wrong decision. Thank you very much, Mr. Lee. [Applause.]
Mr. SMITH OF NEW JERSEY. Thank you very much, Dana.
The Chair recognizes Mr. Sherman.
Mr. SHERMAN. Thank you, Mr. Chairman. I think there are two issues here. One is the free flow of information and censorship where the Internet has been a tremendous positive, and I believe the involvement in U.S. high-tech companies has made it net a greater positive. However, it is up to these United States companies to inform their customers that not all of the world's sites are available on the Worldwide Web if you are in China. It should not be www. It is not worldwide Web; it is Chinese-censored Web. Second, we need to do everything possible in the United States to punch holes through the Chinese firewall to develop techniques, and I commend the Falun Gong and others who are doing that.
What concerns me even more is privacy, where a breach of privacy has led to the imprisonment of several democracy advocates. At a minimum, United States companies need to inform their customers of the degree to which the Chinese Government may get private information. When I go to Google.com, I see the privacy policy. What is interesting about that policy is it says they may cooperate with a court order. They may cooperate with a criminal investigation.
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I hope when I look at it again it says, a criminal investigation of a democracy, not that Yahoo! will turn over my e-mails, which would not be that interesting, or maybe the Chairman's, which would probably be more interesting, if that is part of the investigation of the Government of Sudan or China. Customers ought to know what the privacy policy is, and it is not enough to say criminal investigation because there is a difference between Beijing and Washington.
Second, the delete key has got to be a delete key so that when one of your customers deletes a document, it is gone from your system completely, unavailable to the Chinese Government or anyone else. I am particularly concerned about the participation or possible participation of U.S.-based employees in aiding oppressive governments, and that is why I would like to work with Members of this Committee, particularly Chairman Smith, on legislation that would prevent U.S.-based employees of any company that has confidential information, ISPs or banks or whomever, insurance companies, et cetera, prevent all U.S.-based employees from turning over confidential information to an oppressive government unless our Government certifies that that information is being requested pursuant to a legitimate criminal investigation of a nonpolitical crime.
A request from China or a court order from China directing Yahoo! or Google or anybody else to turn over information, or Bank of America, to turn over information to the Chinese Government should be ignored until you know that that is a legitimate criminal investigation and not an attempt to put a democracy advocate in prison.
Finally, if we are talking about privacy, I do need to comment about the privacy of Americans. Regardless of what this Administration is actually doing, its attorney general and our President himself are asserting that every chief executive of this country can, without a warrant, seize any information necessary to further the war on terrorism, wide open, any information, and I would hope that the companies represented today would tell us that Americans logging on to your domestic sites will have their privacy protected to the full extent of your privacy policies and will not be turned over to the U.S. Government in the absence of a court order.
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Otherwise, while those in China may see their privacy violated in the most heinous ways, we here in the United States may also find that perhaps some future President asserting these very broad interpretations of the Constitution is reading our e-mail, and I would prefer that that not happen without a court order. I yield back.
Mr. SMITH OF NEW JERSEY. Thanks, Mr. Chairman. Mr. Fortenberry.
Mr. FORTENBERRY. Mr. Chairman, thank you for holding this very important hearing, and thank you to the many witnesses who will help us today probe this very grave issue of people versus profits, of expression versus repression, of the rights of human persons versus the plans of the collective.
The companies represented here today have been pilloried in the press, and rightfully so, for abetting repression in China and, in one case, for cooperating with Chinese authorities, on the one hand, while stonewalling the U.S. Department of Justice on the other.
Mr. Chairman, this situation is not good. Now, with that said, I want to listen to all of our witnesses to understand how American multinational corporations are working to reconcile fundamental ethical standards with their efforts to observe foreign laws that violate American principles of justice.
American leadership and innovation have spurred the creation of the Internet. This remarkable technical breakthrough has since become synonymous with globalization, the Industrial Revolution of the late 20th century. Now globalization does carry the potential for progress to benefit human kind, but it also involves unprecedented challenges, including the one here today. U.S. companies operating around the world are required to abide by the local laws of the countries in which they operate just as foreign companies are required to abide by U.S. laws. However, the question before us is whether U.S. companies have a further obligation to the U.S. Constitution and the Bill of Rights when local laws overseas conflict with the basic principles upon which our laws are based.
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The case of Shi Tao has focused worldwide attention and harsh criticism on United States Internet service providers operating in China. Let me say at the outset that it is my sincere hope that no U.S. executive would willingly and knowingly collude in the detention and jailing of journalists. Nevertheless, the damage has been done, and that damage is very serious in human terms.
I submit that it is valid to argue that more truthful and good information is better than less information, that our Internet companies, which are second to none, should be free to continue leading and empowering the free flow of information worldwide. It is also valid to argue that this free flow of information is like a rushing global torrent that will eventually burst any dam that is in its way.
Nevertheless, these arguments will ring hollow to Shi Tao and others like him, and during this hearing we cannot turn back the clock for Shi Tao, but after this hearing it is clear that we can no longer settle for business as usual.
Now, given the collective ingenuity available to the companies represented in this room, I cannot imagine the need to throw up our hands in despair or that we would dare to settle for dismissing personal liberty as a cost of doing business. So I look forward to a candid discussion on the issue of safeguards, export controls, and other possible mechanisms that we can employee to further limit jeopardy to the citizens of the world who seek a free exchange of information.
Mr. Chairman, again, thank you for bringing together such a knowledgeable group of witnesses to explore the important issue of corporate responsibility toward American fundamental principles of justice.
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Mr. SMITH OF NEW JERSEY. Mr. Blumenauer?
Mr. BLUMENAUER. Thank you. I appreciate our Committee's leadership, Chairs, and Ranking Members for initiating this discussion and for the passion that has been clearly in evidence. This is a difficult set of issues, and I think we have already seen important and valuable soul searching done in a variety of sources, including some of the companies that will be visiting with us today.
But I think the companies themselves are more an indicator of a much larger set of issues and problems, and I hope we are sitting back listening to them and thinking about how the various companies in the information age walk the line in compliance with U.S. laws, the laws in the many countries around the world that they are operating, how we provide information, what impacts this has right here in this country, as has been referenced by a couple of my colleagues, on our own war on terrorism.
I fully believe that in China, in the long run, truth in information will transform that country, and with several Members of this Committee, when given the chance in direct conversation with Chinese leadership at the highest levels, have been unstinting in pushing back in terms of issues of access, of freedom, of being able to advance some of our democratic ideals. The question remains how best to do it, who plays what role, especially for the United States Government, and this is a mirror on our own behavior.
I think there are issues we could talk at some length about: Unlawful spying on U.S. citizens; the limits, the guidelines we are going to give to technology companies in terms of complying with laws, real or imagined. There is a lot to be explored, and they could tell us about difficulties in dealing with well-intended legislation that some of us have voted for that has turned into a nightmare and posed legal problems.
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I also think this Congress has to be very careful about the signals that it sends. I am one who thinks that our telling the Palestinians right before the election who they were going to vote for might have just pushed Hamas over the top, and the Chinese Government, with some 4,000 years of history, has not always been amenable to being hit by a crowbar by the United States Congress. I think we have to be surgical and careful about what we do so that it is not counterproductive, but that is Congress.
We are going to hear from the Administration ultimately when we wind down our comments because they are practicing diplomacy, and they have got a lot going on, from Six-Party Talks—the list is endless in terms of the environment, the economy, and global security. And we need to take a step back and have a deep breath there.
I am hopeful that, apart from the politics and the diplomacy and the practice of business, that Congress does not overreact. I am open to suggestions for legislation, but a lot of what we did with knee-jerk reaction in the collapse of Enron and MCI produced some intemperate legislation with Sarbanes-Oxley that has been frozen in time. We would not have done it that way if we had done it in a thoughtful manner. Our dual-use-technology export controls have created a sort of bizarre regime where thoughtful, independent observers will suggest that, with the best of intentions, we have created problems not just for American business but actually might be undermining some of our security objectives, and it is a bureaucratic nightmare. It is frozen in time, and Congress is incapable, once it is there, of going back and thoughtfully looking at it and making adjustments that most rational people say ought to be made.
I commend the leadership for taking and shining a spotlight. I think just by having this hearing, important things are happening. I am open to how we strike that balance, how we work with the private sector, work with the Administration, work with governments around the world, but I hope that this is just the first step of a thoughtful, longer-term discussion so that we, at the end of the day, do something that achieves what all of us agree needs to happen, but too often Congress fails in the way that we initiate it.
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I appreciate your courtesy, and I look forward to further proceedings of this hearing.
Mr. SMITH OF NEW JERSEY. Thank you. Chairman Burton?
Mr. BURTON. Thank you, Mr. Chairman. I want to thank you very much for holding this hearing. I am a little disappointed in some of my Democrat colleagues in trying to equate what is going on in China with the war against terror and how our President and our country is trying to stop additional terrorist attacks on this country by making sure we monitor what potential terrorists are doing here and abroad. But I know it is an election year, and I can understand them doing that. They would like to get the majority back, so I guess we just have to tolerate that.
Let me talk just a little bit about the issue at hand. President Hu, when he took office in 2004, indicating, and people were believing, that there was going to be an era of good feeling between the United States and China and that there was going to be less repression, and, according to what I have seen, it has been just the opposite. There is more hard-line activity over there. The golden shield, which is going to police the Internet over there ostensibly to deal with potential lawbreakers and people who might be a threat to law and order, is really just a tool to put innocent civilians in jail who criticize or who disagree with the regime.
It is a totalitarian, Communist approach that has been used in the past, but what bothers me about these American companies is I am sure that Microsoft and Google and Yahoo! were all watching television several years ago when young Chinese had a Statue of Liberty in Tiananmen Square, and young Chinese people were standing in front of tanks because they were fighting for liberty and freedom and all of the things that we enjoy. And they remember the thousands of young people that were thrown into gulags over there—10 million people are in the Communist gulags today, 10 million, and they were thrown into these Communist gulags and made to eat gruel and make things that we buy, ad infinitum.
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We were all horrified by that. It was horrible, and the whole world criticized the Chinese Government for their repressive tactics and how they were crushing, literally with tanks, crushing people who only wanted freedom. That is what the President has been talking about, freedom and democracy, for some time. That is what we are all about. That is what John F. Kennedy was about. That is what we have been about since the beginning of our Republic: Freedom and democracy and human rights for human beings around the world. And here we are in the technology age, and some of the most successful and effective companies that we have ever seen—the richest man in the world started Microsoft, and I really admire Bill Gates. I think it is fantastic that a man could acquire that kind of knowledge and that kind of wealth from being a great technology leader.
But now it is being used to repress people in the most repressive government in the world, and I just cannot understand why these companies who are making so much money cannot do it in a different way, not supporting a repressive regime that throws their people in jail simply because they disagree with them or crushes them with tanks.
So today, Mr. Chairman, when we talk to the people from these Internet companies and these major technology companies, I would like to ask them if there is anything being done to create countercensorship software because if they are making all of this money from the Chinese Government over there, maybe it would not be a bad idea to throw a few bones to the people who would continue to like to communicate in a free and effective way without the threat of being thrown into a gulag.
I would also like to ask, and I hope they will think about this when they testify, and I would like to have my whole statement inserted in the record, if I might, Mr. Chairman, but I would like for them, if they do not mind, telling us how much money they are making from their contracts with China. I think it would be interesting for the American people to know how much money they are making in helping repress the people who would like to have freedom of communication and have freedom in their country.
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This is a very important issue. I am not sure that anything we are going to say today or do today is going to change a lot because everybody knows, in corporate America and around the world, the dollar is very important. I am a free-enterprise advocate. I am a conservative Republican, and I believe in free enterprise, but I also believe, with free enterprise comes responsibility, and I hope the leaders of these companies will take to heart what is being said here today.
We did not want you guys to come up here just to beat on you. That is not what we wanted you to come up here for. Hell, I want you to make a lot of money. I want you to be successful. That is the thing that makes America tick, that makes us the greatest economy in the world, but at the same time, there is a responsibility that must be realized as well.
We really need to do everything we can to bring about freedom, democracy, and human rights in this world, and I hope that these companies will take this to heart when they leave today and maybe try to do something in a little different direction to bring about a positive change. And I would like to know how much money you are making from these contracts over there, and I hope you will tell the American people. With that, Mr. Chairman, I yield back my time.
[The prepared statement of Mr. Burton follows:]
PREPARED STATEMENT OF THE HONORABLE DAN BURTON, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF INDIANA, AND CHAIRMAN, SUBCOMMITTEE ON THE WESTERN HEMISPHERE
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MESSRS. CHAIRMEN, THANK YOU FOR HOLDING THIS IMPORTANT AND TIMELY HEARING. I LOOK FORWARD TO HEARING FROM OUR STATE DEPARTMENT OFFICIALS, PRIVATE SECTOR REPRESENTATIVES, AND THOSE REPRESENTING THE NON-GOVERNMENTAL ORGANIZATIONS AND HUMAN RIGHTS COMMUNITY.
WHILE I WHOLEHEARTEDLY BELIEVE IN A FREE ENTERPRISE SYSTEM AND THE SPIRIT OF CAPITALISM, I ALSO BELIEVE THAT WE MUST WORK TOGETHER TO FOSTER AND NURTURE DEMOCRATIC REFORM IN CHINA AS A CRITICALLY IMPORTANT STEP TO ENSURE THE LONG-TERM ECONOMIC AND SECURITY INTERESTS OF THE UNITED STATES.
IN RECENT YEARS, THE UNITED STATES CONGRESS HAS WORKED ON A BIPARTISAN AND BICAMERAL LEVEL TO SEND A STRONG, CONSISTENT MESSAGE TO REPRESSIVE REGIMES LIKE THE PEOPLE'S REPUBLIC OF CHINA (PRC): OPEN THE FLOODGATES AND MAKE A REAL COMMITMENT TO SUPPORT AND ADVANCE DEMOCRATIC GOVERNANCE AND POLITICAL OPENNESS, RESPECT HUMAN RIGHTS, AND PROMOTE AND PROTECT FREEDOM OF SPEECH.
WE MUST WORK TO ENSURE THAT U.S. COMPANIES WHICH ACTIVELY PARTICIPATE IN BUSINESS CONTRACTS WITH THE PRC DO SO IN A TRANSPARENT AND LEGITIMATE MANNER. TO THAT END, WHILE I REMAIN GREATLY CONCERNED ABOUT THE PRC'S OPPRESSIVE TACTICS, I WAS ALSO TROUBLED TO HEAR THE LATEST DEVELOPMENTS SURROUNDING THE DISCOVERY THAT AMERICAN COMPANIES ARE ALLEGEDLY COMPLICIT IN SUPPORTING CHINA'S REPRESSIVE ACTIONS.
EVEN THOUGH THE ARRIVAL OF THE CHINESE INTERNET IN THE MID-1990S PROVIDED THE AVERAGE CHINESE CITIZEN WITH THE ABILITY TO MORE RAPIDLY EXCHANGE IDEAS, IT ALSO BROUGHT ABOUT THE DEBILITATING USE OF STRICT CENSORSHIP AND THE LIMITATION OF FREE SPEECH. OVER 111 MILLION PEOPLE IN CHINA HAVE ACCESS TO THE INTERNET, AN INCREASE OF 88% IN JUST THE LAST THREE YEARS. IN FACT, THE CHINESE INTERNET IS THE SECOND LARGEST INTERNET MARKET BEHIND THE UNITED STATES.
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SO, WE MUST ASK OURSELVES THE QUESTION: SHOULD WE REMOVE U.S. COMPANIES FROM CHINA AND HAND OVER COMPLETE INTERNET CONTROL AND DOMINATION—AND SUBSEQUENTLY, COMPLETE CENSORSHIP—TO THE CHINESE GOVERNMENT?
THERE IS A BETTER WAY; IT IS MY HOPE THAT USERS OF THE INTERNET IN CHINA WILL CHISEL AWAY AT THE VIRTUAL WALLS OF REPRESSION AND DEMAND THAT THE GOVERNMENT CEASE FROM CENSORING INFORMATION.
AS YOU KNOW, THE CHINESE GOVERNMENT OWNS ALL THE TELEVISION AND RADIO STATIONS IN CHINA, AND MOST PRINT MEDIA OUTLETS, SO AS TO PROPAGATE AND PROMOTE STATE-SANCTIONED IDEOLOGY AND INFORMATION.
MEDIA PROFESSIONALS OPERATE UNDER STRICT ORDERS TO FOLLOW CENTRAL PARTY DIRECTIVES AND TO 'GUIDE PUBLIC OPINION' AS DIRECTED BY POLITICAL AUTHORITIES WHO EVEN GO SO FAR AS TO DIRECTLY CENSOR BOTH THE DOMESTIC AND FOREIGN MEDIA TO ENSURE COMPLIANCE.
NOW, THE HEAVY HAND OF CHINESE CENSORSHIP EXTENDS INTO THE UNTAMED ELECTRONIC WILDERNESS THAT IS THE INTERNET. AS I UNDERSTAND IT, THE OFFICIAL PRC PARTY LINE IS TO PROMOTE THE USE OF THE INTERNET, WHILE IN REALITY HEAVILY REGULATING AND MONITORING ITS USERS.
ACCORDING TO THE STATE DEPARTMENT'S ESTIMATES, CHINA'S INTERNET CONTROL SYSTEM EMPLOYS MORE THAN 30,000 PEOPLE—THROUGH AN OFFICIAL BUREAUCRACY—TO SPECIFICALLY TARGET AND PUNISH INTERNET USERS WHO QUESTION, CRITICIZE, OR STRAY FROM THE ACCEPTED, HEAVILY-CENSORED LANDSCAPE OF TOPICS AND COMMUNIST PARTY DOGMA. IN OTHER WORDS, CHINESE CITIZENS USE THE INTERNET AT THE GREAT RISK OF PUNISHMENT AND IMPRISONMENT—MORE SO THAN EVEN CONVENTIONAL MEDIA.
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IT HAS ALSO BEEN BROUGHT TO MY ATTENTION THAT THE PRC'S MINISTRY OF PUBLIC SECURITY HAS BEEN CONTINUALLY UPGRADING AND EXPANDING ITS ''GOLDEN SHIELD'' PROJECT—A GOVERNMENT-SPONSORED SURVEILLANCE SYSTEM THAT WAS INAUGURATED IN 1998.
THE GOLDEN SHIELD PROJECT INCLUDED THE CONSTRUCTION OF AN ADVANCED COMMUNICATION NETWORK AND COMPUTER-BASED INFORMATION SYSTEM PURPORTEDLY TO BE USED TO IMPROVE POLICE EFFECTIVENESS AND EFFICIENCY. UNFORTUNATELY, AS WE HAVE DISCOVERED, THE PRC IS NOT USING GOLDEN SHIELD AS A TOOL TO IMPROVE POLICE EFFICIENCY, BUT AS A WAY TO MONITOR CHINESE CIVILIANS VIA REMOTE VIDEO SURVEILLANCE, ONLINE DATABASES CONTAINING IDENTIFICATION RECORDS OF CHINESE CITIZENS, AND INTERNET POLICING.
WE MUST NOT OVERLOOK THESE EGREGIOUS VIOLATIONS OF FREEDOM OF EXPRESSION IN CHINA. WHILE THE INTERNET HAS PLAYED A ROLE IN BRINGING GLOBAL ATTENTION TO THE ISSUE OF CHINESE CENSORSHIP, THE INTERNATIONAL COMMUNITY MUST DO ALL THAT WE CAN TO ACTIVELY PROMOTE THE FREE FLOWING EXCHANGE OF IDEAS THROUGHOUT THE REPRESSIVE REGIME.
A STEP IN THE RIGHT DIRECTION WOULD BE TO PROMOTE THE DISTRIBUTION AND USAGE OF COUNTER-CENSORSHIP SOFTWARE.
IN FACT, I AM A PROUD COSPONSOR OF REPRESENTATIVE COX'S ''GLOBAL INTERNET FREEDOM ACT OF 2005'' (H.R. 2216), WHICH WOULD AUTHORIZE $50 MILLION TO DEVELOP AND IMPLEMENT A GLOBAL INTERNET FREEDOM POLICY COMBAT STATE-SPONSORED AND STATE-DIRECTED INTERNET JAMMING BY REPRESSIVE FOREIGN GOVERNMENTS—SUCH AS THE PRC—AND THE INTIMIDATION AND PERSECUTION BY SUCH GOVERNMENTS OF THEIR CITIZENS WHO USE THE INTERNET.
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IN THE SAME VEIN, SINCE HE ASSUMED POWER IN 2004, PRESIDENT HU JINTAO HAS DISAPPOINTED THOSE OF US WHO EXPECTED DEEPER AND MORE MEANINGFUL OPENING OF CHINESE SOCIETY. PRESIDENT HU HAS TAKEN A HARDER LINE TO SUPPRESS FREEDOM OF PRESS AND RELIGION, WHILE STOKING CHINESE NATIONALISM WITH THE ULTIMATE RESULT OF REPRESSION AND XENOPHOBIA. THERE IS A DARK SIDE OF NATIONALISM AND PRESIDENT HU HAS DEMONSTRATED A TENDENCY TO USE NATIONALISM AS A JUSTIFICATION FOR AUTHORITARIANISM.
WHILE TODAY WE ARE LOOKING AT INTERNET USAGE AND CONTROL OF THE INFORMATION SUPERHIGHWAY WITHIN CHINA, I WANT TO ALSO REMIND MY COLLEAGUES THAT CHINESE MILITARY STRATEGISTS HAVE ADVOCATED EXTENSIVE HACKING AND THE INTRODUCTION OF COMPUTER SUPER-VIRUSES AS METHODS TO ''GAIN DECISIVE EDGES OVER ADVERSARIES.''
AS WE ALL KNOW, CHINA POSSESSES A BOOMING HI-TECH INDUSTRY AND I AM CLOSELY WATCHING TO SEE WHETHER THERE IS A POLITICAL WILL AND COMMITMENT TO USE THESE TECHNOLOGIES FOR PEACEFUL MEANS WITHIN AND BEYOND CHINA'S BORDERS.
MOREOVER, CHINA WILL HOST THE OLYMPIC GAMES IN 2008, AND THERE MUST BE SUSTAINED INTERNATIONAL PRESSURE ON CHINA TO BREAK FROM THE PAST TO PURSUE AND INSTITUTIONALIZE DEMOCRATIC FREEDOMS AND INSTITUTIONS.
MESSRS. CHAIRMAN, THANK YOU FOR HOLDING THIS VITALLY IMPORTANT HEARING. I LOOK FORWARD TO HEARING FROM THE COMMITTEE'S WITNESSES AND FINDING A VIABLE SOLUTION TO ADDRESS THE GROWING PROBLEM OF CENSORSHIP THROUGHOUT CHINA.
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Mr. SMITH OF NEW JERSEY. The Chair recognizes the gentlelady from California, Ms. Watson.
Ms. WATSON. Thank you, Mr. Chairman. I am very pleased that you are holding these important hearings on the role of the Internet in China. Let me try to be as brief as I can.
Certainly, no Member likes the fact that United States-based Internet gateway companies, such as Yahoo! and Microsoft, have been implicated in providing information to Chinese authorities that has landed its clients in jail. Neither are Members pleased about the reports that United States companies have cooperated in filtering their sites of political content the Chinese Government finds objectionable and provided technology to enhance the capabilities of Chinese censors to monitor the Internet. The actions rub at the fundamental principles of an open society which cherishes and thrives on the free exchange of ideas and information.
Despite the PRC's efforts at censorship of the Internet and their odious consequences, we also must not forget that the Internet is an incredible force for freedom and change around the world. It is my understanding that China now has somewhere around 166 million e-mail accounts. Those with access to computers conduct nearly 400 million Internet searches daily. A significant amount of this activity escapes Chinese censors' eyes. For example, it is my understanding that much of the information about growing discontent in the provinces is communicated throughout China via the Internet. The Chinese Government's attempt to put a lid on the outbreak of SARS was undermined by Internet communication.
Mr. Chairman, it is my hope that this hearing will become part of a constructive dialogue about the challenges to Internet freedom and perhaps lead down the road to a responsible and standardized set of industry practices that all U.S. Internet companies will follow.
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I also believe it is proper and very timely that Secretary of State Condoleezza Rice announced yesterday the formation of a new, global, Internet freedom task force that will attempt to address the challenges of Internet freedom. I would be interested in hearing the Administration's thought on the new task force.
Finally, Mr. Chairman, I want to note the absence of China's largest search engine company, Baidu, which you may have invited to the hearing today. Baidu controls more than 50 percent of the Chinese Internet search market. It is listed on Nasdaq, has American investors, and has voluntary submitted to Chinese censorship. I believe that it would have been very enlightening to have their representatives at the witness table today, so I hope at another time they will come and testify in front of this Committee. Thank you very much, Mr. Chairman.
Mr. SMITH OF NEW JERSEY. Thank you very much.
Mr. Tancredo?
Mr. TANCREDO. Mr. Chairman, as several times in the past I had originally chosen not to speak at this time because we are here gathered to hear the testimony of the people that we have brought into the room, but, once again, some of the comments of my friends on the other side force me to interject my own thoughts on this. And that is that this Committee and our Human Rights Caucus have held several hearings on the issue of torture, and I sometimes think, in listening to my colleagues on the other side, that they could be brought in front of that committee for the torture they do to logic, especially when they try to draw comparisons, these bizarre and outlandish and idiotic comparisons, between colonialism and the fact that there is an attempt on the part of our Government to identify people who are talking to our enemies, that is to say, identify people who are communicating with al-Qaeda, and somehow make that a relative act, relatively the same.
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What the heck? Whether or not China, a country with a human rights record that should be and is often condemned by most of the civilized world, a country that does what it does to its own people, a country that has no regard for human rights, that in any way these two actions, the actions taken by the government to try to get these Internet operators and high-tech providers to give them the information they need to imprison people who are talking about things like freedom, it is just ridiculous to try to make these comparisons and to try to make the world feel as though these actions are in any way, ours and theirs, similar. They are not.
We are operating two different systems where what we are doing today could never be done, of course, in China. Looking into these issues is not allowed. The ability for us to analyze our own problems and to share them with the world, which we do so regularly; that certainly never can be done in China.
It is interesting in a way to me because in the original discussion of PNTR, permanent normal trade relations with China, we had so many companies coming in to tell us that, in fact, if we only would give them the ability to trade with China and to do so on a preferred basis that all of a sudden Jeffersonian democracy would break out all over China as a result of this economic vitality that we would create.
I remember saying at the time, if that were the case, why would the Chinese be here lobbying for this? Who knows more about China, us or the Chinese? The fact is that they wanted PNTR. They wanted it because, of course, a more vibrant economy helped them control their population. It helped them solidify their position. They do not want this freedom, however. They do not want the freedom of the Internet for exactly the opposite reason, because it would destabilize the regime, and we should, of course, understand what motivates, and we should do whatever we can to expand that concept of freedom throughout the world, and one way to do it is to let people have access to the free marketplace of ideas.
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We should not be fearful of the free marketplace of ideas. There will be some we do not like listening to, but it is nonetheless good for us to be able to explore them, and it is good for the Chinese people to be able to explore them. It is a healthier world we would create, and it is a less dangerous world we will create if that kind of opportunity is afforded to all people in China. Thank you, Mr. Chairman.
Mr. SMITH OF NEW JERSEY. Thank you.
Ms. McCollum?
Ms. MCCOLLUM. Thank you, Mr. Chair. I was hesitant to speak because we have so many people waiting to listen to what we are going to hear from our Government, from the testifiers who have their opinions on what should be done, and then from the companies who are directly involved in this. But to say nothing when my friends, and I do regard some on the other side of the aisle my friends, when we, as Democrats, say we need to look at laws, we need to look at the laws which China has and which these corporations, which we have encouraged to go to China through trade agreements passed by this country, have to work within the rule of law of China.
I think having a discussion about what we do to promote our democratic values here at home and abroad is a legitimate discussion. I think having a discussion with these companies about what we can do to protect people in China as they access the Internet—I think privacy statements have been discussed. Maybe what should be showing up in a privacy statement is: ''This site has been filtered. It has been restricted by your government,'' or, ''Your government may be monitoring this over our objections, over our company's values, but this is the arena in which we have to work in.''
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But then when some of my colleagues have talked about we, too, have to be ever vigilant to uphold the goals, the ideas, and the values of our United States Constitution and to make sure that we are participating in the checks and balances that are important in our democracy to remain healthy. For people to say that they are going to tolerate us saying that up here while people all around the world are watching does not speak well of us working together in a bipartisan way to do exactly what Mr. Tancredo said, to listen to one another, to learn from one another, and to have open and honest exchanges in which we are truly listening to one another.
To make comments that by wondering when we are going to have oversight hearings to find out how the Executive Branch is using its gathering of information through the Internet and through other technologies to listen in on what American citizens may be doing or may not be doing is somehow unpatriotic and that somehow, as a mother and as a person who took an oath of office to defend this Constitution, I am not a true American is wrong.
So what we need to do here today is to listen to the challenges that are out there for corporations as they interact with governments such as China in having their customers access the Internet and work with them to create an open society on the Internet. What we also need to do is to do our job here at home in our obligation to make sure that checks and balances are fulfilled so that we, at the same time, are looking clearly and making sure Americans' privacy rights are protected. Thank you, Mr. Chair.
Mr. SMITH OF NEW JERSEY. Thank you very much.
Chairman Royce?
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Mr. ROYCE. Yes. I do not think anyone, Mr. Chairman, is making the argument that no one is a true American because they might suggest a moral equivalency argument. All we are saying is that, or I think the point my colleague is trying to make is that, before 9/11 the NSA was eavesdropping, and we might as well admit it, on al-Qaeda on the pilots potentially who were going to take a plane and crash it into the Pentagon. Now, there were about a dozen calls that came out of Yemen where we listened in.
Now, the NSA was concerned enough about civil liberties that they knew that these two al-Qaeda agents were now in the United States, and thus to be treated like citizens, they did not set up their electronic equipment on this side, in the United States, and did not follow the conversations in the United States.
What subsequently happened, just by way of explanation, is that in the United States the NSA, under orders from the President of the United States, decided that in the future if, through the al-Qaeda switchboard in Yemen or anywhere else in the world, al-Qaeda attempted to make contact with their agents in the United States, we would, in fact, follow up in the U.S. instead of making this an area where those agents might operate without oversight, and we did that because, in addition to this particular incident, we had several other incidents that we were able to prevent on United States soil and in Europe through the use of this technology.
Arguably, for those of us on this side, this does not seem to be the same moral equivalency argument that we are involved in vis-a-vis the whole discussion of China. I think the thing that troubles us about those companies that have gone above and beyond the censorship that China demands of them as a cost of doing business, and we certainly have listened to the argument of the companies, they say that their issue is offer censored Internet service or offer none at all.
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We understand that argument, but what I think gives us particular pause right now and drives this hearing is that Yahoo! provided evidence to Chinese authorities that led to the imprisonment of Internet writer and activist Li Zhi, and the difference between imprisoning or monitoring and affecting his conversation as opposed to an al-Qaeda agent is demonstrably different because what you are talking about here is someone who is simply trying to articulate the position that freedom of speech is an important right in China, and part of Chinese evolution is accepting a divergence of opinion.
The cooperation of Yahoo! with the Chinese police led to his arrest and subsequent 8 years' prison sentence. It is one thing to play by another country's censorship rules, as odious as they may be, as is the case here, but it is a very different matter to aid in ruthless persecution of free thinkers, and for those of us that want to protect the environment for free thinkers in the world, I think it is important also to delineate the difference between someone involved in freedom of expression and someone involved in terrorist activity.
I, by way of my meager effort to offer a partial solution to this that I think might help compensate in some way for the damage done, would make the following observation. Some of the best minds in the world are involved in developing this new technology, and it strikes me that those same minds could be involved in developing ways to break through jamming.
For many years, I have carried legislation including Radio Free Asia. I have expanded the broadcasting now. We built the largest and most powerful transmitter in the world on Tinian Island with legislation I have carried. One of the things that really frustrated me about United States industry, and I will be very blunt about this, after we developed that capability, allegedly a company in Texas then went to the Chinese authorities and offered them the technology to jam Radio Free Asia in order to silence the ability to disseminate information across Asia.
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Now, what steps might industry take now? How could we find a way that could repair some of the damage? I would suggest at least the consideration of an idea, and I would prefer this outside of the government. I am not a big enthusiast for government involvement unless it is to set up something like surrogate radio service in some place in the world where there is no functioning free speech. I can see the utility in that, but I prefer the private market.
So my suggestion might be that those involved in an interest in free speech, because there is a great commitment to that with respect to many of the people that are going to appear here today, or at least in the past they have articulated that position, consider setting up some kind of a fund, privately maintained, that will help fund and consider contributions in technology that will help overcome the jamming, that will find ways around the censor of the Internet, and make that available.
I would think that that would be something that would maybe even offset the reputation that some United States companies have created, like the one I cited in Texas that allegedly then sold to the Chinese Government the very technology that would allow them to jam. They had been a part of helping to develop it. Our taxpayers paid for a United States company to help. It was part of the effort to develop the broadcasting capabilities, and then they turned right around and sold that to the Chinese Government.
I do think that there is, in the interest of freedom, a stakehold in this for many of the personalities in this room today, and I think their minds should be focused on what the private sector can do to help, as I said, overcompensate for some of the damage done.
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Chairman Smith and others have spoken eloquently about China's abhorrent human rights record. They are right. We, as a country, owe it to ourselves to look as closely as we can at these difficult issues which will profoundly impact the Chinese people's future and, frankly, long term, will impact our own nation's well-being. Thank you very much, Chairman Smith.
Mr. SMITH OF NEW JERSEY. Mr. Meeks?
Mr. MEEKS. Thank you, Mr. Chairman. I have been listening. Let me first start by this because I think that, first, in the spirit of honesty and in the spirit of truth, for me as I listened to my colleagues on the other side talking about whether or not this is equated to the NSA, et cetera, let me just say, in the spirit of Black History Month, first of all, many blacks in this country, when we had the founding fathers, they did not have freedom. In fact, for over 200 years, there was no freedom. We just lost Coretta Scott King. What they were fighting about as recent as a few months ago is freedom, and we have got to practice what we preach.
Freedom has not been for everybody here in America. Just ask some of the individuals in New Orleans. So we have got to make sure sometimes that we practice what we preach and that we do not try to blame someone else for some of our own failings.
Freedom is work, freedom is sacrifice, and freedom is making a difference. Now, for me, freedom is not just pointing fingers at American companies whom we said, and I know some way, well, the Chinese wanted them—well, we said we wanted them to be in China. Why? Well, I know I voted for PNTR. Why? Because I think that most of our American corporations and American businesses doing business in China have been some of our greatest Ambassadors. I think sometimes we forget the fact that China has changed substantially over the last 20 to 25 years, and it is, I think, a direct result of many of our businesses that are doing business in China.
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I was told one thing prior to visiting China, but going to China, I was told before I left that if I would talk to any Chinese individuals on the street, that they were so fearful of their government, they would not talk to me. They would run from me for fear of being locked up and put in jail. Well, I wanted to test that theory myself because I know that that would have happened some 20 to 25 years ago.
I got an interpreter and a car, and I stopped at bus stops that no one could have possibly known that I was going to stop at just to see what the reaction of the Chinese people would be and to ask them what their reactions were and what their feelings were toward the American companies doing business in China. I was quite shocked. It was not what I was told before I left.
I found that the Chinese people were very engaging and very appreciative of our American businesses. In fact, most of them desired to work for the American businesses because they saw it as a road to a better life and to freedom. We had some great off-the-record conversations. So for us to now come and say that because our American corporations are abiding to the laws of China that they are at fault, I think not.
I think of all of the communications that were completely cut off in this country. Long before the NSA, there were wire taps and other illegal activity that took place with Dr. King. Long before that, there were people that were jailed, one, a Member of this Congress, a member of the Black Panther Party. I am sure he can go into a whole lot of things that took place with reference to that organization.
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But we have got to continue to push and pursue freedom but not say we are going to, number one, point fingers at our companies. Maybe here is a role and an opportunity for the State Department and the International Society to get together so we can set some rules for all companies, no matter where we have Internet access, as opposed to saying that now something that we all voted for, or most of us in this Congress, for PNTR, to say, now we are going to point a finger at you, company, or that company. I do not think that is the way to go. It is right to compare what we do in this country to what other countries do.
So to say to us on this side that we should not be, well, it is not only for me, not only about NSA. It is about the historical background of all kinds of other kinds of illegal activities that this Government, Democrat or Republican, have taken place, and people have had an effect when they were just trying to fight for freedom. But we did not stop and listen to our local newspapers or anyone else who said it was prohibited, that we are not going to allow you to continue to do business there.
So I say that we need to work at this thing collectively. We need to make sure that we are working together so that freedom for the Chinese people can come, but do not put ourselves in the position where individuals are looking at us and making us the laughingstock because, again, we are saying do something, and then we are not doing it ourselves.
We have got to make sure that not only we tell people what to do and how to do it, that, in fact, we lead the way by doing it ourselves, and that is what this is all about. This should not be about just pointing fingers at our American companies, who I believe have been great Ambassadors and have forwarded more peace, more freedom, I should say, and more opportunity to the people of China, and as long as that information continues to flow, you cannot stop it because truth will continue to roll like the waters around the globe. I yield back.
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Mr. SMITH OF NEW JERSEY. Adam Smith?
Mr. SMITH OF WASHINGTON. Thank you, Mr. Chairman. I appreciate the opportunity to speak, and I appreciate you having this hearing. I think this is an incredibly important discussion. When you are talking about interacting with regimes that you disagree with, there are a lot of very complicated and important issues that come up, and certainly this is not limited to China, and it is not limited to private companies. State-to-state issues arise as well, and I just feel that it is not a black-and-white issue. It is not engagement always works. No matter how bad they are, no matter what they are doing, simply engage, and it will get better. Nor is it true that simply saying, Look, if we disagree with you, we are going to have absolutely nothing to do with you. I do not think that is a smart approach either.
I think you have got to look at it on a case-by-case basis, and where China is concerned, it is particularly important because we are talking about 1.4 billion people and the most prominent emerging power in the world. Having a positive relationship with China, I think, is incredibly important to the future peace and stability of the globe.
When we look at this particular issue, the one thing that occurs to me is, let us assume for the moment that no United States tech company does business in China. Does it get better? Is it less repressive? Does China move forward? I do not think so, not in the least bit. I think lashing out at the companies there as sort of enabling this is a little absurd. China is what China is, and if the tech companies leave, that is not going to change.
So we have to look at what are we doing, and is it going to make a positive difference? I think one of the positive differences that is out there is what Mr. Meeks referenced, and this is what I am hearing from countless sources. While there is no question that China is a repressive regime, and you can pick your example and bash on it in a number of different ways, I think the question is, is it getting any better? The story I am hearing is that it is, that, in fact, there is greater freedom and openness amongst the people than there was 5, 10, 15, 20 years ago.
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So if we are making progress, that is something to make note of. It is not standing up and saying it is all perfect, it is all beautiful, and I do not remember anybody promising Jeffersonian democracy the year after we passed PNTR, by the way. I think there was a far more realistic approach, that you engage, and you make progress, and you move forward.
We do not have the power, as big and powerful and strong as we are as a country, to simply point around the globe, and I would trust this lesson would be learned quite clear by now, snap our fingers and say, You will do this the way we want you to. It is more complicated than that, but I think we are making progress in China.
When you talk about the Internet, in particular, I think the most interesting aspect of this, yes, they require filters. Well, we require filters around here. Private companies require filters as well, and yet I think we would all know that those things are only so effective. They are consistently broken, consistently hacked into, and the same is happening in China. China is not going to be any more successful at filtering and firewalling everything than we are. If you have it there, people will get through those firewalls and get information that they otherwise would not, and that is undeniably happening right now. So I think we have to be mindful of that.
Now, one thing I will say is that we have some leverage here, and I hope that our companies, and I think our role on this Committee is to put pressure on our companies that are over there doing business to use that leverage as well as they can. I think we must be realistic about that in negotiating with China to try to make progress and move forward, but I think it would be a grave mistake for this Committee to stand up and say, Look, China, we do not like what you are doing. Therefore, we just do not want to talk to you or have anything to do with you. I think progress is being made. I think the Internet is one way to do that.
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I do think we sometimes get a little pie in the sky about the progress that is going to be made, that it is going to be instantaneous and comprehensive. It is not going to happen. It is going to be slow and steady, and I think it is.
So while I look forward to this discussion, and I want to hear more about what is going on over there and how we can help move the ball forward to make the regime less repressive and more open, I do not think the approach here is to simply bash on the companies for doing business with China. It is far, far, far more complicated than that. Progress is being made. I hope we can work with the companies and with our own State Department to figure out how to make more progress but not to create a new Cold War with China by saying, ''We disagree with you; therefore, we will never have anything to do with you.'' I think that would be a very grave mistake for our foreign policy, so thank you for the opportunity.
Mr. SMITH OF NEW JERSEY. Ranking Member Payne.
Mr. PAYNE. Thank you very much, Mr. Chairman. Thank you for calling this very important and timely hearing. I do not know of any issue more prominent as relates to relationships between the U.S. and the PRC than this issue right now.
More than 100 million people in China are Internet users. China has become the second-largest country of Internet usage in the world ever since the Internet was introduced there in the 1990s. Because of the huge population, estimated between 1.3 and 1.5 billion people, and rapid economic growth, the number of users is increasing very fast, spreading from the metropolitan cities in the eastern areas to the cities and even small towns in middle and western regions of the country. It is spreading like wildfire.
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The Internet has been shaping Chinese society and changing the way of ordinary people's lives throughout that nation. However, politically, the Internet is both a tool for freedom and repression. It is sort of a tale of two cities: The best of times and the worst of times. The fact is that at the beginning the West was generally optimistic about the role the Internet would play in China. They said the Internet would accelerate liberalization and freedom of speech.
The assumption was that the Internet is impossible to control and censor. Former President Clinton once said that trying to control the Internet would be like trying to nail Jello to the wall. Unfortunately, and if anybody could do it, he probably could have done it, unfortunately, the Chinese Government has managed to do that, and United States companies have been involved. That is why we are here today at this hearing.
I think it has been mentioned that if we had been a little less anxious to change what was called Most Favored Nation status, which China enjoyed, but it was a trade treaty that had to be approved on a regular basis. There were people who felt that, first of all, the name sounded too good because the jury was still out on the People's Republic of China, and to have something called the Most Favored Nation status for trade relations sounded too good, and so those people who think of names that are very positive—the most positive a name sounds, the more suspicious I get. But then Most Favored Nation status, as we all know, was changed to permanent normal trade relations.
PNTR. That sounded a little less cozy, a little less favorable, especially in light of Tiananmen Square, in spite of the imprisonment of religious leaders and so forth. So we now have permanent normal trade relations, which means that we cannot reopen this unless it is some dramatic act of Congress that can undo a trade law, which would be almost impossible at this time. Why it was felt that we should give away a tool to keep a country that was emerging out of total totalitarianism into attempting to have some kind of democracy and free enterprise, to me, made no sense at all.
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The Chinese Government requires all companies to comply with its regulations on censorship and control of information. Companies like Yahoo!, Google, and Microsoft have complied, which we would expect them to do if they are going to do business in the PRC.
I am very concerned and disturbed by the actions of Yahoo! disclosing the e-mail addresses and contents of cyber-dissident Li Zhi and Shi Tao to the government, respectively, in 2003 and 2004, which has already been mentioned, resulting in Mr. Lee's 8-year sentence and Mr. Shi's 10-year sentence.
In 2004, Cisco Systems and Juniper Networks were involved in assisting China to develop censorship capabilities in trading for four out of the six contracts from the Chinese Government. Microsoft's blog-hosting service, MSN, at Beijing's request, closed down the popular online journal of blogger Zhao Jing, who also worked as a research assistant in the Beijing bureau of the New York Times.
In 2006, the new local Google site in China, www.google.cn, will comply with local Chinese laws and regulations, move the key words like ''democracy'' and ''human rights,'' ''Tibetan independent,'' ''Tiananmen crackdown,'' ''Falun Gong spiritual movement,'' ''Taiwanese independence'' from use in the Chinese search engine. That is total censorship. It is absolutely wrong.
All of these facts are disturbing. These companies must find ways to work around this brutal censorship whenever possible, but I am afraid that if these companies were asked to leave China, the Chinese people would be the ones to suffer. You mentioned before, Glasnost and Perastroika in the USSR was a gradual, time-consuming, year-in-and-year-out by virtue of contact between western people, youth groups visiting the people in the USSR finally saw the breakdown of that system of the Warsaw Pact countries, and the wall came down in Berlin.
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It was a slow process. With the Internet, these things can be accelerated. However, as I have indicated, it can also be the worst of times, as it could be in the best times. So 10 years ago, no one would have imagined we would be talking about Chinese end users on e-mail and Web blogs, but today the activities of ordinary Chinese citizens on these Internet services flourish.
So though censorship is wrong and should not be used, it is a reality in China right now, and these companies have to operate in that reality. I think it is more useful for the United States companies to be operating in China and providing access to information and outlets for cultural expression and opinion sharing than for Chinese people to have to rely on Chinese Internet providers which do self-censorship and even blog more information.
We also have to remember that most Chinese citizens who use the Internet are not going to look for information on Falun Gong or Taiwanese independence anymore. In other words, the Internet is much more than a tool for political use, and our attempt to reduce the issues to that could have unintended consequences.
Once again, as I voted against the Most Favored Nation status or permanent trade relations, I think if we still had it open, we could pressure China, for example, even in Darfur where they are extracting the oil or looking the other way as genocide is going on, and they, being a permanent member of the Security Council, can veto any strong resolution condemning what is happening in Darfur. That is the reason that the Secretary-General's hands are almost tied, because of the Security Council and those five permanent members who can veto any proposal. We have no real clout over the head of the Chinese Government.
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So, Mr. Chairman, I really commend you for this hearing. I certainly look forward to hearing testimony from our witnesses.
Mr. SMITH OF NEW JERSEY. Mr. Payne, thank you so very much.
Let me now introduce our first panel, panel 1, beginning with Ambassador David Gross, who has served since August 2001 as the U.S. Coordinator for International Communications and Information Policy in the Bureau of Economic and Business Affairs. Since joining the Department of State, Ambassador Gross has addressed the UN General Assembly and has led U.S. delegations to many major international telecommunications conferences. He has also led the U.S. Government's participation in the multilateral preparatory work for both phases of the UN's ''Heads of State'' World Summit on the Information Society and had the honor of leading the U.S. delegations to both the formal summit in Geneva in 2003 and in Tunis in 2005.
We then will hear from Mr. James Keith, who is the senior advisor on China, Mongolia, Taiwan, Hong Kong, and Macau at the U.S. Department of State. Prior to becoming senior advisor, Mr. Keith was consul general of the United States in Hong Kong and was the director of the Office of Chinese Affairs. Mr. Keith is a career foreign service officer. He has served numerous tours of duty in Washington working on Asian affairs and has served at the United States Embassies in Beijing, Jakarta, and Seoul.
At this time, if I could ask both of you two gentlemen to please stand and take the oath, and if you could raise your right hands.
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[Witnesses sworn.]
Mr. SMITH OF NEW JERSEY. Let the record show that each of our witnesses affirmed in the affirmative, and, Ambassador Gross, the floor is yours.
TESTIMONY OF THE HONORABLE DAVID A. GROSS, DEPUTY ASSISTANT SECRETARY FOR INTERNATIONAL COMMUNICATIONS AND INFORMATION POLICY, BUREAU OF ECONOMIC AND BUSINESS AFFAIRS, U.S. DEPARTMENT OF STATE
Mr. GROSS. Thank you very much, Mr. Chairman. Should I ask for our written statements to be incorporated into the record?
Mr. SMITH OF NEW JERSEY. Without objection, both of your written statements and any attachments will be made a part of the record.
Mr. GROSS. Thank you very much, Mr. Chairman. Thank you, Chairman, and Ranking Members very much. I want to thank you especially for holding this hearing. As I think everyone has said this morning, this hearing and the holding of this hearing itself is a significant event and something for which we are already seeing positive changes.
Since its commercial launch a little over a decade ago, the Internet has proven to be the greatest purveyor of news and information in history. From a small band of university researchers sharing documents to more than a billion people around the world connecting in real time, the Internet has proven to be a force multiplier for freedom and a censor's nightmare. Repressive regimes have failed to fully restrict or block access to the Internet. Nevertheless, there are severe challenges to this openness. These challenges are our focus.
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It is a top priority for the State Department and for the U.S. Government to do all we can to ensure maximum access to information over the Internet and to ensure minimum success by censors attempting to silence legitimate debate in this global town hall. The U.S. Government and the State Department have been at the forefront of the battle to ensure global access to information through the Internet. We do this bilaterally and multilaterally. My colleague, Jim Keith, will focus on our bilateral relationship with China.
We have actively engaged in outreach with many other countries to find common cause regarding this important matter. Multilaterally, we are engaged in many forums, most recently at the United Nations World Summit on the Information Society, to expand the rights of all people, no matter where they live, to have access to the free flow of information. As the department has focused more energy on this issue, the Secretary has concluded that a task force would be a useful tool to make our strong advocacy even sharper and stronger.
The Global Internet Freedom Task Force announced yesterday will draw upon the State Department's expertise across many bureaus, including international communications policy, human rights, democracy, business advocacy, corporate responsibility, and, as appropriate, relevant countries and regions. The task force will consider the foreign policy aspects of Internet freedom, including the use of technology to restrict access to political content and the impact of such censorship on U.S. companies, the use of technology to track and repress dissidents, and efforts to modify Internet governance structures in order to restrict the free flow of information.
The task force will also look to ensure that our concerns are being raised at all levels with governments and international organizations alike. We will also work with the private sector and NGOs to help address their concerns in meeting these challenges. The task force will, over the coming weeks and months, make recommendations to the Secretary on policy and diplomatic initiatives to maximize access to the Internet and to help minimize government efforts to block information. We will feed into the robust interagency processes, led by the NSC and the NEC and including our partners at Commerce, Justice, USTR, and other agencies. Our goal in this area may be summarized by our desire to have more people have more access to more information everywhere.
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This hearing is obviously an important part of that process. I am pleased with the recent positive statements being made by Internet companies, especially their willingness to work hard on the creation of a global best practices. Of course, they must do much more. Similarly, both in our conversations and in their public statements, NGOs have been very helpful in this effort.
Six decades ago, the Universal Declaration of Human Rights stated:
''Everyone has the right to information, to freedom of opinion and expression, and this includes the right to freedom to hold opinions without interference and to seek, receive, and impart information and ideas through any media, regardless of frontiers.''
These rights were reaffirmed most recently at the UN's World Summit on the Information Society just this past November.
We will work with all stakeholders, including, of course, the Congress, to determine the best diplomatic and technical strategies to affirm these rights and practices.
Mr. Chairman, we do not believe that technology alone will lead to the Chinese Government allowing its people to enjoy freedom of expression or the political benefits of the free flow of uncensored information. We will, however, continue to make clear that it is not acceptable for the Chinese Government to continue to suppress speech on the Internet or to foster a climate of intimidation and persecute dissidents. All of the people of China, including the more than 111 million Chinese Internet subscribers, deserve no less. Thank you very much, Mr. Chairman.
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[The prepared statement of Mr. Gross follows:]
PREPARED STATEMENT OF THE HONORABLE DAVID A. GROSS, DEPUTY ASSISTANT SECRETARY FOR INTERNATIONAL COMMUNICATIONS AND INFORMATION POLICY, BUREAU OF ECONOMIC AND BUSINESS AFFAIRS, U.S. DEPARTMENT OF STATE
Thank you very much for the opportunity to testify with my colleague from the Bureau of East Asia and Pacific Affairs, James Keith, before these Subcommittees. We have before us a subject of great importance to the Administration and to the people of China. The Internet is one of the great engines of human freedom in the world today, and limits on the spread of information and the use of the Internet to repress legitimate dissent are of great concern to the U.S. Government. Such measures also work against the interests of the Chinese people as they strive to build an ''innovation society.'' We welcome this occasion to discuss with you our views on the Internet in China and U.S. Government efforts to promote the free flow of information via the Internet. The involvement in this hearing of several of the principal U.S. Internet companies active in China, as well as human rights organizations with an abiding interest in this issue, puts a needed spotlight on a matter of real concern to this Administration, the Congress, and the American people.
In Chairman Hyde's invitation to appear at this hearing, he referred to regulations issued by the Chinese government in September 2005 that are being used to suppress freedom of the press and free speech. The regulations are very broadly written, criminalizing virtually any unlicensed reporting over the Internet of any situation or event that is unflattering to Chinese society or its leadership—at least, in the view of the censors. Among the forbidden activities are ''harming the honor or interests of the nation,'' ''spreading rumors, disturbing social order or disrupting social stability'' and ''inciting illegal assemblies, associations, marches, demonstrations, or gatherings that disturb social order.'' Clearly, the regulations provide the legal means to censor a very broad spectrum of legitimate speech, and their scope causes great concern.
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The new Chinese regulations run counter to the commitments China itself has made to the world community. I had the honor of serving as Co-Head of the U.S. delegation to both phases of the United Nations' World Summit on the Information Society in Geneva in 2003 and in Tunis in 2005. Both meetings concluded with final declarations, which the U.S. worked hard to ensure included strong language reaffirming the critical importance of freedom of speech. For example, the Geneva Declaration of Principles states ''that everyone has the right to freedom of opinion and expression; that this right includes freedom to hold opinions without interference and to seek, receive and impart information and ideas through any media and regardless of frontiers.'' The Tunis Commitment adopted just this past November explicitly reaffirmed the Geneva Declaration and further stated that ''freedom of expression and the free flow of information, ideas and knowledge are essential for the Information Society and beneficial to development.'' Similarly, the Tunis Agenda, unanimously adopted at that same UN Summit, reaffirmed ''our commitment to the freedom to seek, receive, impart and use information, in particular, for the creation, accumulation and dissemination of knowledge.'' China was an active participant in both phases of the WSIS and agreed to all of these WSIS declarations.
In bilateral discussions with Chinese officials, I and many other State Department officials have reminded them of these commitments and expressed U.S. concern over Chinese policies and practices. Senior officials at our Embassy in Beijing regularly do the same, and Mr. Keith will outline these approaches in greater detail. The Administration will continue to remind the Chinese Government of its commitments to giving its citizens access to information, and to make the point that our companies should not be used to persecute political dissenters or to suppress political dissent.
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We have also emphasized to the Chinese Government that we do not believe it is in the interests of China for its government to continue to censor the Internet or to establish a climate of fear among Internet users. We continue to urge the Chinese Government to uphold its constitutional guarantee of freedom of expression and to bring its own practices into compliance with international standards. While censorship appears to be incomplete, the vast monitoring effort conducted by Chinese authorities means that users can never be sure whether their legitimate searches for information will be met with intimidation or worse. Such a chilling effect over the world's most dynamic medium of communication cannot help China in its quest to build an innovative, knowledge-based economy. Hampering dissent and interfering with the free flow of ideas does not break the resolve of political dissidents. Instead, it limits China's economic potential at a time when—as the PRC claims—it wants to foster indigenous innovation fueled by increased foreign investment.
The Chinese leadership has sought to draw a line between economic reform and political dissent. That line is an illusion. As Secretary Rice said very recently, ''It is very hard to tell people to think at work but not at home.''
Following the sentencing of Chinese journalist Shi Tao, the State Department—with much support from our Embassy in Beijing—immediately initiated an intensified dialogue with American companies doing business in China, including those that are appearing before you today. On Secretary Rice's instructions, we expressed to them the Department's concerns about the human rights issues at stake. The message has been unambiguous. With our common interest in establishing the free flow of information in China by using the Internet and other means, we will continue to consult with industry closely.
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The Subcommittees will shortly be hearing directly from several of these companies. We applaud recent statements that they recognize the importance of acting responsibly in this very difficult environment and see the value of cooperating with each other to improve the situation of the Chinese people. We have encouraged such cooperation, and we challenge our companies to leverage their global leadership by developing and implementing a set of meaningful best practices. We want to work with our companies, but the State Department can advocate more effectively for Internet freedoms when U.S. companies conduct themselves in a clear and consistent manner.
Secretary Rice pays close attention to threats to the Internet and its transformational power as a force for freedom. In order to ensure a robust U.S. foreign policy response she established a Global Internet Freedom Task Force (GIFTF) on February 14. The task force will report to the Secretary through Under Secretary for Economic and Agricultural Affairs Josette Shiner and Under Secretary for Democracy and Global Affairs Paula Dobriansky, and will consider foreign policy aspects of Internet freedom, including:
The use of technology to restrict access to political content and the impact of such censorship efforts on U.S. companies;
The use of technology to track and repress dissidents; and
Efforts to modify Internet governance structures in order to restrict the free flow of information.
In addressing challenges to Internet freedom, the task force draws on the Department of State's multidisciplinary expertise in international communications policy, human rights, democratization, business advocacy, corporate social responsibility, and relevant countries and regions. Consistent with existing interagency and advisory institutions and processes, this internal task force will focus the State Department's coordination with the National Security Council, the National Economic Council, other agencies, U.S. Internet companies, non-governmental organizations, academic researchers, and other stakeholders.
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We believe that, as President Bush has stated: ''Historians will note that in many nations, the advance of markets and free enterprise helped to create a middle class that was confident enough to demand their own rights. They will point to the role of technology in frustrating censorship and central control—and marvel at the power of instant communications to spread the truth, the news, and courage across borders.''
Mr. Chairman, we do not believe that technology alone will lead to the Chinese government's allowing its people to enjoy freedom of expression or the political benefits of the free flow of uncensored information. We will continue to make clear that it is not acceptable for the Chinese government to continue to suppress speech on the Internet or to foster a climate of intimidation and persecute dissidents. All the people of China, including the more than 111 million Chinese Internet subscribers, deserve no less.
Thank you again for inviting me here today, and I would be happy to answer any questions you may have.
Mr. SMITH OF NEW JERSEY. Thank you very much, Ambassador Gross.
Mr. Keith.
TESTIMONY OF MR. JAMES R. KEITH, SENIOR ADVISOR FOR CHINA AND MONGOLIA, BUREAU OF EAST ASIAN AND PACIFIC AFFAIRS, U.S. DEPARTMENT OF STATE
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Mr. KEITH. Thank you, Mr. Chairman. I would like to add my thanks for including us in today's hearing and want to commend the Subcommittee for shining the light on these practices. If I may, I would also like to point toward the work that the CECC has done under Chairman Leach's co-sponsorship. We have used much of their information already and will continue to do so in showing the Chinese Government that there is a partnership between our two branches of government in seeking to advance our goals in China.
Again, the way we have put that, in one respect, is that it is a top priority for us to maximize access to information over the Internet and minimize success by censors to control it. Another way of putting that, if I may paraphrase something that one of the Members said a moment ago, is we certainly need to find a way to sustain the promise of the technology without acquiescing to the intent of the censors.
This is a top priority for us. We have direct instructions from the Secretary of State to advance this agenda, and, in a broader perspective, we are led by the President in our engagement with the Chinese on human rights objectives. He has been the most forceful spokesman for advancing our human rights agenda in China, including during his recent trip to the region just at the end of last year.
I would say to you also that our assistant secretary for democracy, human rights, and labor, Barry Lowenkron, is in China today. He has already made points reiterating our strong commitment to precisely this question of maximizing access to information over the Internet and limiting the censorship which is increasing in China, and he has raised specific cases, as have the Secretary, the President, Ambassador Rant in Beijing, and other senior Administration officials and will continue to do that, I can assure you.
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In addition to that, we are looking for ways to address systemic reform in our human rights agenda. We will not lose sight of any of the individual cases, of course, but we also have to work toward the long-term, looking for ways to bring, both bilaterally and multilaterally, pressure to bear for China to address the systemic problems that exist today. These are problems that, as you know, Mr. Chairman, we have addressed in our human rights reports and will continue to do so every year, including this one.
Just to take one example of the kinds of things that we are raising as both individual and systemic issues, jamming of VOA and RFA are activities that we have protested, will continue to protest, and have tried to make the case to the Chinese as to why this is not in their interest in the long term.
We will continue to bring public attention to all of these negative or backward-looking activities on the part of the Chinese Government while at the same time trying to point toward more productive and promising avenues in the future.
I commend also the Subcommittee's attention to the distinction between negative and backward-looking activities on the part of the Chinese Government and the success and prosperity of the Chinese people that we hope for. We look to sustain that distinction because we want the Chinese people to know that we are looking for a China that succeeds, and we are looking for ways to help them make the right kinds of accomplishments and achievements not only on their own but through the efforts of the Chinese Government over time.
It has been the President's contention that our pressure on the human rights agenda with the Chinese is precisely designed to help them succeed. In fact, economic modernization in China depends upon, over time, the Chinese Government opening itself up not only in the economic area but also in the political area. This has been an important motivation for us in engaging the Chinese Government on our human rights agenda.
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Like many voices in China, some of whom I know will be represented in later panels, we anticipate the Chinese Government will find it very difficult, in fact, perhaps an exercise in futility, to try to control the flow of information into China. China itself aspires to succeed as a knowledge-based economy, and as has been pointed out earlier, just this week, former senior government officials and scholars have, in China, pointed to the problems with censorship and China's own interest in advancing political reform and advancing government decisions that would limit intervention into areas such as the Internet.
In fact, one commentator this week, as quoted in the New York Times, described China's current situation as a censor's nightmare, given the hundreds of millions of consumers who make up the market for information in modern China.
So our message is that we want to work with the Congress. We look forward to opportunities to persuade the Chinese Government that this is the direction it ought to move in, and I can assure you, this will continue to be a high priority for us, both in terms of our multilateral engagement as well as our bilateral engagement with the Chinese.
In sum, our perspective is that Chinese censorship is increasing. It is wrong, it is contrary to China's own interest, and, in our view, ultimately it is futile. Thank you, Mr. Chairman.
[The prepared statement of Mr. Keith follows:]
PREPARED STATEMENT OF MR. JAMES R. KEITH, SENIOR ADVISOR FOR CHINA AND MONGOLIA, BUREAU OF EAST ASIAN AND PACIFIC AFFAIRS, U.S. DEPARTMENT OF STATE
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Mr. Chairman, Committee members, thank you for inviting me to participate in today's hearing on the Internet in China. I believe this hearing has had the salutary effect of helping us focus our approaches to the many issues involved in this complex subject. As the Secretary made clear in her February 14 announcement of a new government task force to lead the way in resisting challenges to Internet freedom, the right to freedom of expression is firmly anchored in international law and in multilateral conventions and is an American foreign policy priority. We intend to sustain a robust foreign policy response to these challenges. I welcome the opportunity to join with you and my colleague, Ambassador David Gross, the Deputy Assistant Secretary of State for International Communications and Information Policy, to help the subcommittee explore this important topic.
China's policy of economic reform and opening up has resulted in the integration of China into the world community in ways more profound than many would have predicted, though the degree and scope of integration has varied by sector and subject. Nowhere is this better seen than in the Chinese government's efforts to adapt to—and control—new technologies. What the fax was in the late 1980s and the cell phone has been a decade later, so the Internet has become in the 21st century—a vital force for spreading information and exchanging ideas. China's leadership recognizes the centrality of the Internet and the free flow of information in providing the economic data to make China's market-oriented reform possible, but its effort to regulate the political and religious content of the Internet is counter to our interest, to international standards, and, we argue, to China's own long-term modernization goals.
We believe China will not achieve its ambitious development goals unless it opens its political system further and allows the full participation of its citizens in the political process. There are abundant tools available to the Chinese people in the technological and information sector to create the stable, prosperous and just society that would serve China best. In 1997 the number of Internet users in China was approximately 600,000. Today there are 111 million internet users in China—still just 8 percent of China's population—making China second only to the United States in total number of users. As Beijing looks at the world around it, it sees a flow of information into China—not just from the Internet but also from cell phones (China has more than 350 million of them), text messages and a large and growing foreign business, student and tourist presence—that challenges the government and society to conceive and formulate new ways of doing business, interacting socially, and relating to one another.
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We are firm in the conviction that the flow of information into and throughout China will not reverse itself. As the President said in Kyoto, Japan in November, as China reforms its economy, its leaders will find that once the door to freedom is opened a crack, it can not be closed. The President, Secretary Rice, and senior Administration officials remain deeply engaged in our efforts to challenge the Chinese to open the door further and think creatively about a future in which the ideas of individual citizens help to keep China at the cutting edge of 21st century development.
Regrettably, China's leadership efforts to monitor the content of the Internet have accelerated in the past year, sending a chilling message to all Internet users. Beginning in March 2005, PRC authorities began to enforce the ''Computer Information Network and International Internet Security Protection and Administration Regulations'' which require that all website operators register their sites with the local Public Security Bureau within 30 days of beginning operations. The Chinese government has shut down thousands of sites for failing to register. Then in July, the government issued new regulations requiring instant message users and bloggers to use their real names.
An attempt to exert even greater control came in September with ''The Rules on the Administration of Internet News Information Services,'' promulgated by the State Council Information Office and the Ministry of Information Industry. These rules—like those dating back to 1999 when the Chinese government first sought to control what Internet Content Providers could and could not publish—try to ensure that ideas that do not have the government's imprimatur or that challenge its authority do not take root in China. The rules are hard to interpret, especially when they mandate that Internet News Information Service Work Units or organizations may not include content that jeopardizes the security of the nation, divulges state secrets, subverts the national regime, jeopardizes the integrity of the nation's unity, harms the honor of the nation, or disturbs social stability, among other cautions. These vague and variably interpreted restrictions limit search results on ICPs operating inside China about, for example, the Tiananmen Massacre, the Dalai Lama, democracy, or human rights, to name just a few terms that are subject to content control.
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Even issues that appear to be somewhat distant from the subject of political reform can be captured by the government's overriding focus on social order. For example, it is clear in retrospect that the government initially sought to restrict public awareness of public health and environmental issues such as the SARS outbreak in 2003 and the recent Songhua River spill in northern China.
We have raised our concerns about content control and about the treatment of Internet activists repeatedly and firmly with the Chinese government.
We have expressed concern about the cases of journalists, editors, and writers detained or imprisoned for expressing their view or sharing information on the Internet including Shi Tao, who was sentenced to ten years for forwarding Chinese government instructions on how the media should cover 16th Anniversary of the Tiananmen Massacre.
We have told the Chinese government that we are also deeply troubled that another individual, Li Zhi, was reportedly imprisoned earlier for expression of his views over the Internet.
In addition, we have protested the sentencing of Yang Zili, an activist who was part of an Internet group discussing political reform, and Li Changqing and Yang Tianshui, who were both arrested for their Internet-based writings.
Censorship and restrictions on media outlets, including the Internet, have been the subject of numerous and frank protests to the Chinese—including one by our Charge in Beijing on February 9—and will be a key topic of discussion when Assistant Secretary for Democracy, Human Rights and Labor Barry Lowenkron holds meetings in Beijing, which began today. He will express our deep concern about China's efforts to control the free flow of information in violation of international commitments, including those made at the World Summit on the Information Society to ''seek, receive, impart and use information, in particular for the creation, accumulation and dissemination of knowledge.'' Ambassador Gross has addressed that matter here today.
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Despite the presence of thousands of government monitors—perhaps as many as 25–30,000 by one estimate—and the involvement of more than 20 ministries and government organs in ''managing the Internet,'' China's success in its attempts to control this technology has been limited at best.
While Internet use and content is officially restricted, registration requirements and enforcement vary by Internet café and by city in China. Of course, computer savvy Internet users can usually get around the censors by using any number of proxy servers. In fact, one commonly used service, Anonymizer, a leading online identity protection technology, has just announced that it is developing ''a new anti-censorship solution that will enable Chinese citizens to access the entire Internet safely and filter-free, and also free from oppression and fear of persecution or retribution. The new program is expected to be available before the end of the first quarter 2006.
Some sophisticated Chinese Internet users are adept at using code words or symbols to get their views across without triggering key word filters.
American officers in China have found that news containing politically-sensitive words can be accessed, though its availability varies day-to-day and site-to-site.
Many well-known English language websites including the New York Times and Washington Post are accessible but others including Voice of America, the BBC, and Reporters Sans Frontiers are consistently blocked. We have and will continue to protest these blocks.
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The Department of State's Embassy and Consulate sites, though subject to intermittent blocking, are generally available and provide access to U.S. policy statements and the Department's Human Rights Reports.
Of course, censorship efforts need not be widespread or effective across the board to achieve their aim. Censors just need to arrest and sentence a few prominent individuals to send a chilling message. But I believe, as do many in China, that controlling the Internet to the extent that the Chinese government has sought to do is likely to be futile in the long term. As Professor Xiao Qiang, the leader of the Internet project at the University of California at Berkeley and from whom you will hear later in this hearing, is quoted in the February 9 New York Times, ''Symbolically, the government may have scored a victory with Google, but Web users are becoming a lot more savvy and sophisticated, and the censor's life is not getting easier.'' The Times goes on to note that ''Microsoft alone carries an estimated 3.3 million blogs in China. Add to that the estimated 10 million blogs on other Internet services, and it becomes clear what a censor's nightmare China has become.''
I expect that market forces will continue to push China toward a less restrictive approach to the flow of information. The international and domestic business communities in China will continue to demand not only the hardware for the information age, but also the software, including unfettered access to the Internet and seamless broadband connections unburdened by filtering and other government efforts that render commercial operations less effective, reliable, and efficient.
Mr. Chairman, we will do our best to shape public and private interaction with China in ways that advance fundamental human rights, including those for Internet users. This is a central tenet of the Secretary's new task force on Internet Freedom. I assure you that this Administration will engage the Chinese government on these issues in ways that promote American values and ideals.
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Mr. SMITH OF NEW JERSEY. Thank you very much, Mr. Keith.
I would just advise the Members we will be operating under the 5-minute rule for panel 1.
Let me just ask, and that goes for the Chairman as well, earlier, Mr. Meeks and others have said that somehow the Chinese and the companies operating there are just abiding by the laws of China. As you pointed out, Ambassador Gross, the most recent regulations provide the legal means to censor a very broad spectrum of legitimate speech, and things like spearheading rumors, disturbing the social order, absolutely catch-all phrases, and I am wondering if you can tell us—we have seen corporations in the past live and, unfortunately, thrive in dictatorships. South Africa comes to mind. Those companies that have done business in Sudan and other places where gross violations of human rights are commonplace.
We know for a fact, and Manfred Nowak, the Special Rapporteur on Torture, just gave us a fresh iteration of that after his visit and report in early December, and he is a very eminent human rights person, and he said torture is widespread in China. If you go to the Laogai, you can count on being tortured. He also said that many of the people with whom he met were very much intimidated, would not talk to him, including others—this idea that somebody on the street gives a glowing rendition of how things are in China is basically the Potemkin Village, especially if you cross the line and speak out on fundamental human rights and desire freedom or religious freedom, at that, in the countries.
So my question is, the new Global Internet Freedom Task Force that you have announced, and I applaud the Administration for doing this; how will it deal with this whole issue of U.S. corporations partnering with the secret police? We know of Shi Tao. We know of others, but as I said in my opening comments, that is probably just the tip of the iceberg. There are so many who are probably languishing and being tortured in the Laogai, and I, frankly, was in a Laogai. Frank Wolf and I visited Beijing Prison No. 1 in the early 1990s after Tiananmen Square and saw about 40 Tiananmen Square activists who were there with shaved heads. It was reminiscent of the concentration camps of a half century ago.
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I would also say to all of my colleagues, if you have not read IBM and the Holocaust—Clarence Page, the syndicated columnist, suggested just a day and a half ago that I read it—I have gotten through about half of it, and it is an indictment of that collaboration, an almost see-no-evil view that some take that somehow they are on the side of efficiency and making the trains run on time and maybe even liberalizing a society when, in fact, they are actually aiding and abetting a dictatorship to be more potent, have a higher degree of efficacy in promoting its repression. It seems to me these are like tools in the hands of a repressive regime. Now they can do that much better in terms of a dragnet, if you will, with regard to its people.
So if you could speak to that issue. What would this new initiative do with regard to partnering with the police to crack down on dissidents?
Mr. GROSS. Sure. Let me respond with a couple of thoughts. The new task force will allow us within the State Department to sharpen our focus on how to deal with these classes of issues. We have a lot of resources and a number of tools that we have.
One of the tools that we are going to be looking very closely at trying to be more effective in using is reaching out to other governments. As has been noted by many of the Members this morning, although the focus today is on China, we should not forget that this is a problem that is broader than China. And, similarly, although we have U.S. companies in focus today, this is also a problem that is broader than just U.S. companies. There are many other companies around the world that are involved in the same sorts of activities, and it is a global, competitive marketplace.
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So what we have already begun to do, but we are looking to do more of, is to reach out to our companies to better understand what is going on to make sure that we understand what the facts are, to promote, as we have today, and we will continue to do, global best practices that have been the source of discussion this morning, to reach out and to talk to NGOs, both domestic and abroad, to better understand their views and their desires. I was particularly impressed by a number of the comments that were made before the caucus earlier this month, some of the very thoughtful ideas, including the opportunity to work together, both companies and NGOs, together with government on these projects.
So we look to outreach and to use the task force to reach out to other governments around the world that have similar values to those that we have, to try to work collectively, and, most importantly, to try to find the efficient ways to deal with this problem. We recognize very much that words alone are not what this is about. What we really want to do is have actions and results, and we are going to be looking for those good ideas from any quarter, domestic or foreign, and to listen carefully and then to implement strongly.
Mr. SMITH OF NEW JERSEY. Let me just ask you, if I could, the censoring of U.S. sites. As I think you heard in my opening comments, and I think we have shared some of the broad outlines of the legislation, the Global Online Freedom Act of 2006, one would be to put e-mail service outside of a repressive country so that the ability of the secret police to have access to is at least mitigated and hopefully prevented.
We also would provide for no censoring of U.S. Government sites. Obviously, Radio Free Asia and Voice of America provide a very valuable insight for those who do not get uncensored information. We would also provide that U.S. Internet service providers could not block those sites, and I am wondering how you might feel about that because it seems to me, I went and looked at several of google.cn's sites and was almost shocked, certainly was dismayed, to see that you not only were blocked on some occasions when you did ''China human rights'' or something of that kind; you went to the disinformation site, People's Daily, china.com.
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For instance, I asked about Manfred Nowak, a very esoteric type of search question, and rather than getting his report on the Google Chinese search engine, I was sent right to People's Daily where he was criticizing the United States for Guantanamo. Certainly, his criticism should be looked at and deciphered, but you did not hear anything about what China was doing.
So on the U.S. sites, your thoughts on that and basically on what you may know already about our bill. Do you think it is valid and needed?
Mr. GROSS. Let me start off, and then let me turn it over to Mr. Keith.
Of course, the Administration would be happy to provide lots of feedback on the bill, and I have not had a chance to look at it, although I, of course, have heard your comments about that. I think, obviously, there are a lot of very important and very good ideas there.
If I may, and at the risk of sounding somewhat nontechnical, even though my expertise is technology, one of the things as I have visited China that I hope that you all will keep an eye on, as we are keeping an eye on, is that the methods used by the Chinese Government are not just technologically based. For me, at least, one of the most sobering and chilling aspects was the use of people to police this; that is, not only the approximately 30,000 cyber police that people have talked about, although no one really seems to know the exact number, of course, but also the use of active registration, people looking at what it is, people are typing it as they type it in, and, in particular, the idea that you may never know whether or not your e-mail or your Web searches are, in fact, being looked at at any given time.
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So it is not just a question of technology. In some respects, oddly and perhaps somewhat counterintuitively, I almost wish it were because then the technological solutions we would all hope for may be there. But I hope we all keep in mind the even, to my mind, more difficult set of problems is how do we deal with that mind-set? How do we deal to try to convince the Chinese Government that at their core they are going the wrong way, and even their nontechnical, but sometimes very effective, approaches are, in fact, just as difficult and just as counterproductive.
Mr. KEITH. Mr. Chairman, I would add that ultimately the question you raised relates to the rule of law and transparency in China. This, of course, is a key area of our interest and an area where both the public and private sector in the United States are deeply engaged in China and trying to advance, with some success in some areas and some real obstacles in others, the deepening of the roots of the rule of law in China.
I think, looking at the specific question you raised, while one cannot count on this, and all we have is anecdotal evidence, it is certainly true that the ingenuity of the consumers in China is shining through, and that is that it is possible to get a wide range of information, including from major publications and through official U.S. Government sites without pointing to directly to specifics because the last thing we want to do in this setting is provide a roadmap as to what ought to be blocked or what is not being successfully blocked. Of course, our position is that nothing should be blocked, and we will keep working in that direction.
I see it as part of our goal is to try to create the atmosphere in which our companies can work, and that atmosphere should be one based on the rule of law and should be one in which any changes that the Chinese Government announces are transparent to all consumers, both Chinese and outside.
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So that is our goal, sir. I have to admit, as robust as our engagement on these subjects has been, we have to be judged by results, and we are as frustrated as the Congress is in many areas by the results.
Mr. SMITH OF NEW JERSEY. I have an additional six questions, but in the interest of time, we will submit them to you and ask if you could, as quickly as possible, get back to us.
Mr. KEITH. Yes, sir.
Mr. SMITH OF NEW JERSEY. Mr. Payne?
Mr. PAYNE. Thank you very much. I would be curious to know, in your opinion, how do PRC's citizens view the impact of the Internet on China's society and politics? Do you think they perceive the Internet as a potential political tool?
Mr. KEITH. Sir, if I may, I think the answer to the question, as was indicated by the Chairman's comments, has to be divided into different categories; that is, in many respects, the Internet is a tremendous tool for the average Chinese user, particularly as has been commented upon in many areas where the government is not interested in effecting control.
I think it is quite clear that both international and domestic firms in China see the Internet not as a luxury but as an absolute necessity in the 21st century doing business, and, as such, the Chinese Government has to be aware that the infrastructure for attracting investment, for attracting people to do business in China, depends in part on the free flow of information, including through the Internet, that companies now expect to be able to do this kind of work in order to conduct their business, and they can do it in Tokyo, Seoul, Shanghai, Singapore, many different places. So the work of the marketplace is helping to extend pressure on the Chinese Government.
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I think it is absolutely the case that whether you look at cell phones or text messaging or even going back to faxes to just give a sense of how quickly the technology is changing here and how rapidly the landscape can change underneath you, all of these technologies have been an integral part of spreading of information in political or even only indirectly political areas.
To give two quick examples, in terms of protection of the environment, the recent oil spill in China was made public through use of the Internet, and had it not been for that, might have been more difficult for the public to be aware of it.
Then to go back into history a little bit further, the initial news about the SARS epidemic, at that time, a completely unknown and new disease, came through use of the Internet.
So it is absolutely a critical part, both in terms of the above-ground, legitimate, from the Chinese perspective, way of doing business as well as the informal network of communication not only between China and the outside world but also, very importantly, throughout China.
Mr. PAYNE. Do you think that the SARS epidemic; was the government still trying to suppress that information, or did it come out just because of Internet use and the curiosity, et cetera?
Mr. KEITH. Sir, the news came out, and the government responded to it. I would say that the government responded with alacrity to it, in fact, over time. We have seen, looking back, that the government was quite decisive once the information was out in public, but it would not have come out as quickly as it did had it not been for the technology that was used to spread the information.
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Mr. PAYNE. There has also been sort of silence on HIV/AIDS in the past in the PRC. To your knowledge, has the Internet pushed the government to acknowledge it has a problem and start to deal with it?
Mr. KEITH. I think it has been part of that solution. Sir, I would say that the history on HIV/AIDS with the Chinese Government is one in which it has become increasingly transparent such that that is now more of an example of the kind of thing it should be doing as opposed to what it should not be doing. In the very beginning, the Chinese Government was very reluctant to admit to statistics and that sort of thing.
What really drove HIV/AIDS, I think, was the Chinese Government's recognition that the transfer of narcotics, and international crime being involved in that, from the Golden Triangle through southern China was inimical to their own interest, and, therefore, they started to engage very directly with us and with many other countries and with NGOs, including the Gates Foundation, to try to advance their own interest in trying to control it.
So I would say, in that case, with HIV/AIDS, the Internet was not the major driver; it was China's recognition that it was quite vulnerable.
Mr. PAYNE. I, several years ago, had the opportunity to fly up through Burma and went up to the area that borders China and the sort of vice that goes on, the casinos in the middle of nowhere, prostitution and so forth, and I would hope that the government would look in terms of trying to crack down on the Chinese citizens that go across the border for these activities.
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Let me just ask this final question, since time is of the essence. To your knowledge, is there a debate within the PRC Government on how to handle Internet censorship? Are there political or social or economic interest groups in China who would be more likely to support fair mass media in general and Internet in particular? Which groups would likely oppose it, and how far do you think they will go, push the envelope, without feeling repression from the government? Are there any groups that are pushing for this?
Mr. KEITH. Sir, I will try to answer as succinctly as I can. This, of course, is one insight into a much larger question in China in terms of its economic modernization and opening up and the different pressures that exist from different parts of the bureaucracy for a wide variety of reasons, some relating to public order and social order from their perspective and some relating purely to business practices and the desire of some elements in the bureaucracy to protect their opportunity to operate in a commercial environment.
So it is certainly the case that, speaking in very general terms, that there is an overall commitment to economic reform and opening up in China, but there is a debate among all of those without opening up the question of whether China should back up in terms of its modernization.
There is a debate as to how fast and how far it should go. The scope and pace of reform, I think, is certainly debated within China among the economic ministries and among those ministries responsible for public security. I think that debate is joined, and it is certainly the case that we want to appeal to those who are making the case for economic reform and modernization depending on the free flow of information.
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Mr. PAYNE. Thank you, Mr. Chairman.
Mr. SMITH OF NEW JERSEY. Chairman Leach?
Mr. LEACH. The Internet issue raises rather extraordinary trade issues that we have never had before and whether we should as a part of our trade policy have protection of a free Internet. Has the Administration given that any thought?
Mr. GROSS. The answer is yes. We have had conversations, both within the Administration and with companies and with academics, about this subject. I would leave it to our colleagues at USTR to make the judgment about this thing, but it has been an area in which there has been discussion and discussion about it.
Mr. LEACH. I would just like to raise one philosophical notion because the Chinese pay attention to hearings of this nature. As we know, the executive has attempted to identify the word ''democracy'' as part of its foreign policy agenda, and, frankly, that is American heritage; it is nothing unique to this Administration; it is our heritage. But the word ''stability'' is very important to the Chinese, and the question is what is destabilizing, and what is stabilizing? In a general framework, I think it would have to be said that the United States' advocacy of openness of information is not intended to be destabilizing, that as a general framework, the spread of knowledge is a stabilizing phenomenon, not a destabilizing one.
I only raise this because there is often a question of motivations, and I hesitate to get this particular discussion characterized as one aimed against a regime. It is aimed against certain policies of countries—a principal one is China, but it is on the side of the Chinese people, which becomes a stabilizing rather than destabilizing factor in that society as well as within our relations with it. Now, is that a perspective that you would share, or would you take another tack at this?
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Mr. KEITH. Mr. Chairman, that is an articulate description of precisely what the President has told the Chinese Government, I think, repeatedly, that, in fact, our perspective is that our engagement on human rights in China is aimed at the success of the Chinese people, that we want to see a stable and prosperous and successful Chinese people, and our strong conviction is the way to get there is not only through economic reform and opening up but also these kinds of issues that have been labeled as political reform, but they, in some cases, are administrative reform and in some cases relate to areas that are not as sensitive to the Chinese Government but also are directly involved in people's equal access to justice and due process.
We are working across the board in these areas, those that the Chinese deem most politically sensitive and others, with precisely this intent in mind; that is that for the Chinese to fail to allow for the views and feelings of their population to be registered in a meaningful way with the government leads to more instability, more of the kinds of incidents of problems in the countryside that have been reported on and are, in fact, a priority for the government in the upcoming National People's Congress this March, when, as the Chairman may know, the Chinese Government will focus on these imbalances that exist in Chinese society today.
Mr. LEACH. I appreciate that, but I am trying to take this a little bit outside the discussion of human rights, although an individual right is freedom of the press. But what we really have here is something more extraordinary. This is the right to knowledge, which is of a distinctive nature, and I just want it very clear that in our discussions of Internet issues we are talking about the precision of right to knowledge and how knowledge can be used, and it both is stabilizing and handicaps a society if they do not allow citizens access to knowledge. Does that seem to be a perspective that is the driving force behind this new task force, or is it something very different?
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Mr. GROSS. I would say it is an important part of that. I have had some personal experience on exactly the issue that you are raising. When we were negotiating for both phases of the UN World Summit on the Information Society, we had very candid discussions with our Chinese colleagues and colleagues around the world, so we recognize the apparent tension that there may be between the issues of stability and free flow of information.
I think, without speaking for them, of course, I think ultimately we were able to get the very, very strong language that we did because there is a recognition, particularly in a world in which most economies, certainly the Chinese economy is trying to become an economy based on innovation, that access to information broadly construed is key for future stability of economies and of societies, and I think that is one of the themes which we seek to work with the Chinese Government and with many other governments around the world.
We believe that this is not something to be frightened of or to be fearful. It does not lead to instability but rather, in fact, leads to a much more stable environment for everyone.
Mr. LEACH. Thank you very much.
Mr. SMITH OF NEW JERSEY. Thank you, Chairman.
Mr. Faleomavaega?
Mr. FALEOMAVAEGA. Thank you, Mr. Chairman. Before I raise a couple of questions here with the members of our witnesses, I want to offer my personal welcome and compliments to Mr. Keith, whom I have had the privilege of knowing a couple of times on my visits to Shanghai and did a fantastic job in representing our Government there as consul general. I am very happy to see you here back in Washington.
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Mr. KEITH. Thank you very much.
Mr. FALEOMAVAEGA. It is somewhat ironic, Mr. Chairman, that we here on this side of the aisle seem to be complimenting more the presence of our corporate community there in a place like the People's Republic of China promoting, at least in some form, a sense of advocacy, of public diplomacy, if you will, and the presence there of our companies seems to put a brighter light on other aspects of our policies throughout the world, at least in a country like China despite all of the problems that we are faced with, like any other country.
I wanted to ask both Mr. Keith and Mr. Gross, suppose we do pass a law to mandate that our high-tech companies leave China because of these repressive reports that we get in terms of censorship and our companies having been forced to reveal the identity of those, especially the Chinese, who are employed by these companies because of violations of some information given here. Let me ask you this. How many other companies do business in China besides those who come from the United States? Do we have competition from the corporate communities in Europe or others? Are we the only high-tech companies that do business in China?
Mr. KEITH. Sir, we are not the only companies, and, in fact, Chinese companies are among the competition.
Mr. FALEOMAVAEGA. What is the total investment of our high-tech companies that do business in China right now as of now?
Mr. KEITH. I guess I would have to know a little bit more about precisely how you wanted to break that down, but I can take that question for you, sir, and get you an answer.
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[The information referred to follows:]
WRITTEN RESPONSE RECEIVED FROM MR. KEITH TO QUESTION ASKED DURING THE HEARING BY MR. FALEOMAVAEGA
According to statistics from the U.S. Bureau of Economic Analysis, at the end of 2004 total U.S. direct investment in China was $15.43 billion. Of that, $3.85 billion, or about 25% the total was invested in the chemicals, computers and electronics products, electrical equipment, appliances, and components, and information sectors. I note that BEA statistics show a significantly lower amount of U.S. FDI than Chinese numbers as the BEA does not include U.S. investment that flows through Hong Kong.
Mr. FALEOMAVAEGA. What is the total investment of our total corporate presence there in China? How do we rank, second, third among the countries of the world that do business in China? I am curious.
Mr. KEITH. Our cumulative investment is among the top in the world. We are behind those overseas Chinese in Hong Kong and Tapei who, to some degree, include round-tripping investment, that is, money that comes out of China goes to Hong Kong or Tapei and then back into China, but we certainly are among the top investors in the world in China.
Mr. FALEOMAVAEGA. Can we kind of wing it? Can you give us some rounded out figures in terms of how much is our total investment there in China? See, I am a free enterprise supporter in that regard, if you will.
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Mr. KEITH. Sir, on the order of $30 billion.
Mr. FALEOMAVAEGA. Thirty billion dollars.
Mr. KEITH. If I have to stand corrected on that, sir, I will certainly get that to you.
Mr. FALEOMAVAEGA. How does that compare with other high-tech companies from other countries? I suppose Europe is probably our biggest competition as far as high-tech is concerned.
Mr. KEITH. Yes, sir. Well, cumulative investment of $30 billion, I think, across the board. The EU is a competitor. For example, just to take one case in point, Boeing and Airbus are very strong competitors, and that includes a great deal of technology component in the product. We are increasingly, especially in the energy sector, competing in the region. The Australians and the Indonesians are heavily involved in China.
Of course, in the manufacturing area, it tends not to be as high-tech, and that is where many of the competitors are for us coming out of southeast Asia and raw material being shipped up to China and then assembled in China and sent off to the international marketplace, including a large portion of it to the United States.
Mr. FALEOMAVAEGA. One of the ironies that we find ourselves in, there is always this constant bickering and public defiance between Taiwan and the People's Republic of China. What the world does not seem to know is that between Taiwan and China they have an unofficial, $100 billion trade going on. It is one of those contradictions that I find difficult myself to know.
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Let me ask you one more question, and I know my time is almost up. The Olympics are coming up in the year 2008. Do you suppose that the presence of these high-tech companies might have some semblance in terms of really letting the world—do you think that the Chinese Government would really allow our high-tech companies to be part of this dissemination process of telling the world how great China is? Would the government have a tendency to put more suppressive policies, and the fact that Google and Microsoft and Cisco Systems, these companies that are part of the this technological, high-tech information technology that we have in the world, do you suppose that the Chinese Government might have someone because this is what they wanted to do—do you think that there may be some change in understanding that this could really be a plus for them rather than put it in the more negative concerns of my good Chairman here that you want to arrest people and put them in prison for 8 years just because they have violated some semblance of the security risk or whatever it is that they are concerned about?
Mr. KEITH. Sir, if I may answer in two parts, it is absolutely clear that the Chinese Government wants the Olympics to have a symbolic effect along the lines that you describe and that they are clearly motivated to move in that direction.
I think part two has to be the long-term perspective that it is going to take, in my personal estimation, generations for us to see the change in mind-set that is associated with deeply rooted perceptions of the rule of law and operation of the rule of law.
So I think we have to keep the short- and long-term objectives in mind at the same time. Clearly, the Olympics is going to be, in the Chinese mind, a watershed, and there is every reason to believe that they are motivated to try to create that impression in the international community.
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Mr. FALEOMAVAEGA. As a follow-up to my good Chairman and colleague, Chairman Leach, had said earlier about not so much linking to the government, but basic philosophical and ideological problems that we sometimes get with the cultural nuances. I remember a couple of times when we visited Beijing, and we were complaining to the Chinese leaders about human rights, and as we got to really understanding, well, what do you mean by human rights? They have a totally definition of what human rights is. To them, human rights is making sure that there is food and shelter for the people, and, to them, that is the primary concern in the minds of the leaders. How do you go about feeding 1.3 or 1.4 billion people?
I would like to offer this challenge to our own country and our own Government leaders. We are having a problem feeding 300 million living here in this great nation of ours. We cannot even provide health insurance for some 46 million Americans.
I wanted to kind of lend that sense of my trying to understand the nuances and how we deal with a country as complex, a country who really we have to deal with when dealing with North Korea, with Iran, with Russia, with India. We cannot just point the other way and think that this country is going to go away because it is not.
I did not mean to direct my questions just to Mr. Keith. Mr. Gross, this great plan that Secretary Rice has decided to put in as an integral art of our State Department, what are some of the pluses that you see? Do you have any timelines that say, hey, in 5 months' time, this is what we are going to do, and is it just toward China? I am sure there are other countries that have similar policies. What about countries in the Middle East? Do they have security problems and censorship as well? They are not very democratic, with the exception of the State of Israel. Are there other countries that have the same problems that we are dealing with as China?
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Mr. GROSS. Absolutely. If the question is whether or not there are other countries that do not subscribe to the free flow of information and the importance of that, the answer, unfortunately, is absolutely yes. They are not regionally specific. There are, unfortunately, a good number of those countries, and it is for that reason why the Secretary's establishment of this new task force is so important. It is not focused on any one country, and it will look within the department to use the resources of our regional bureaus to identify those countries and then to work on them.
We think that that work needs to be specific and unique to each country because each country has its own set of challenges and own set of opportunities, and we look forward to finding those solutions and working creatively not only within the department but then reaching out and working collegially, as I have said before, with other governments and others on this very, very important set of issues.
To simply answer your question, yes. Unfortunately, this is a broader problem than just one country.
Mr. FALEOMAVAEGA. And if we were to pass a law putting the hammer on China, then we would have the cooperation of the State Department to tell us that there are other countries that we are having similar problems as we are with China at this point in time.
Mr. GROSS. I think the Congress can always feel assured that the State Department is here to help.
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Mr. FALEOMAVAEGA. Thank you. Thank you, Mr. Chairman.
Mr. SMITH OF NEW JERSEY. Thank you.
Ms. McCollum?
Ms. MCCOLLUM. Thank you, Mr. Chair.
I am assuming Taiwan's Internet access use is similar to what we would experience here in the United States or in the European Union or Australia. Would I be correct in that assumption?
Mr. GROSS. If the question is in terms of the free flow of information as compared to the percentage of penetration, the answer would be yes. In fact, actually, there are a lot of very interesting things going on in Taiwan about the use of technology, and there is a lot of dynamic use of and high-penetration rates.
Ms. MCCOLLUM. And Hong Kong? What can you tell me about Hong Kong?
Mr. GROSS. Let me start, but I, of course, am sitting next to an expert on Hong Kong.
Ms. MCCOLLUM. Either one of you.
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Mr. GROSS. Hong Kong is an extraordinarily dynamic place in terms of the use of technology and has been for some period of time.
Mr. KEITH. It is certainly one of the most wired cities in the world and very deep penetration into the account.
Ms. MCCOLLUM. Has there been any movement by the Chinese Government to influence what is going on with Internet use in Hong Kong?
Mr. KEITH. Not that I am aware of.
Ms. MCCOLLUM. I am going to show my lack of Internet savvy here real quick probably, so do not be afraid to say that you are mixing things up here. If I am a United States business, Minnesota Mining & Manufacturing, for example, and I am in my offices in mainland China, and as an American citizen, as an employee of that company, is my Internet access restricted by the Chinese Government?
Mr. KEITH. I am sorry. If I could just clarify. You are an American citizen working in a company in China. You have access to the same systems in Chinese that everyone else does, is my understanding; that is, you go through the same portals to the international community that the Chinese Government has structured, so you are captive by that.
Ms. MCCOLLUM. So, in other words, I am filtered. My access is restricted.
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Mr. GROSS. I think probably the perhaps somewhat unhelpful answer is that it depends. It can be as restrictive, but sometimes it is not.
One of the things which we have found, and this is true in many situations in China, is that it varies from time to time and place to place. Part of it depends upon the way in which the company has its network engineered. There are ways in which it can avoid some of the same problems you would see, for example, in cyber cafes in other parts of China. Having said that, so far as I am aware, almost all of it eventually has to come through a certain gateway, so certain filtering occurs at those gateways. There are some exceptions to that rule, but I think, by and large, the answer would be yes.
Ms. MCCOLLUM. And there is going to be another panel up probably, so whether I am a university teacher maybe working on a paper while I am over there or a U.S. citizen working out of something like that, I may or may not find myself restricted.
I have a policy question. I do not want to revisit the controversy discussion that we were having up here among us, but at the same time, I think what we do, what we say, how our words are interpreted as government-to-government relations, there is a New York Times article from February 14 in which a Chinese official is cited on here, and part of his job is he is the information office of China's state consul and cabinet.
Mr Liu says, ''The Chinese effort to regulate content on the Web is aimed primarily at preventing the spread of pornography, content harmful to teenagers,'' and he says, you know, we have the same concerns. We are trying to do the same things that developed countries are trying to do. Then he goes on and says in the article:
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''If you study main international practices in this regard, you will find that China basically is in compliance with the international norm. The main purpose and methods of implementing our laws are basically the same.''
Then he goes on to even say that the Bush Administration gained under the Patriot Act access to monitor Web sites and e-mail communications, the deployment of technology by the FBI to let agencies scrutinize huge volumes of e-mail traffic were examples of how the United States has taken legal steps to guard against the spread of harmful information online. He says, ''Clearly, any country's legal authorities closely monitor the spread of illegal information.'' One more final quote from him: ''We have noted that the U.S. is doing a good job on this front.''
Now, I alluded to the fact that I would like to see us have some oversight hearings and have a very open, robust discussion about what is the law, going and getting the Court approval and following current FISA law and all of that. We need to have that discussion ourselves so that we are speaking with one voice. How difficult is your job when your boss's words kind of come back to be used against you when you are trying to talk about freedom of information and privacy rights?
Mr. GROSS. Well, this has actually been an issue of longstanding. There are sometimes, as you have just read, recent examples that other governments tried to use, but we should always be mindful of the fact that ever since I have had my job now, for about 4 1/2 years, other governments have said, well, this is all just basically a matter of line drawing. Everyone agrees there are certain things that there should not be on the Internet. We may draw our line differently than you draw your line, but it is all just line drawing.
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I think that argument misses a very fundamental fact. It is one thing for democratic countries to go through the exercise of line drawing. It is something very different when nondemocratic governments seek to use the restriction of the free flow of information to keep themselves in power.
So we see there to be a fundamental difference, recognizing that reasonable people in democracies can draw different conclusions about what is or may not be appropriate in a particular circumstance, but there is a very fundamental difference that the sort of quotes that you just read, which I read as well, and I think many people did—they are not unique at all—fundamentally just miss the point, and it shows, I think, the gulf of difference in terms of approaches.
It would be a mistake for us to think this is a recent set of discussion points. Unfortunately, for us, these have been longstanding discussion points, and, again, it really goes to the question of how those decisions are made. Are they made in a democratic type of government situation? I think in all situations, governments should err on the side of allowing for the free flow of information, recognizing that the lines can be drawn differently where other types of governments draw the line very differently and find that restriction is their first choice, and liberalization is only done when there is a reason to do it.
Mr. SMITH OF NEW JERSEY. Ambassador Watson?
Ms. WATSON. Thank you, Mr. Chairman. This is a very, very interesting and telling discussion.
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It was mentioned that there might be some consideration when looking at agreements between an American company doing business in China that we might start incorporating Internet protocol procedures. I would like a response from the two of you. If such is to be, what would you see, and how binding would you see these procedures when an American company decides to do business and relates to the government of that country, you know, here in this country you go into private arrangements that not necessarily the government has to be involved in. But if we do such, what would you see, just kind of off the top of your heads, as procedures?
Mr. GROSS. Perhaps I will start and give my colleague more time to think of a good answer for your very good question.
I think, in the first instance, one of the things which we struggle with, which I know you all are struggling with as well, is the need for flexibility, particularly as technology changes. One of the things that makes this whole area very difficult is it is not static. It is extraordinarily dynamic, and, therefore, the issues are dynamic.
So, at the first instance, and one of the things I was so pleased as I was reviewing the comments made at the caucus a few days ago, was, I think, the general recognition that our first instinct should be to see if there are global best practices that can be established, and I do not mean like best practices but very substantial, very carefully worked out best practices that would have the sort of flexibility built into them to continue to evolve as these issues evolve, and only if that does not happen do we think that we should be stepping in to sort of try to manage that situation.
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I think the problem here is, in many respects, the opportunities, which are the dynamic factors associated with it. So I think the protocol there, to use the term that you were using, is one of flexibility, and it also allows us, of course, to address some of the issues that other Members have raised as well, which is that this is not just a bilateral issue. This really is something that is multilateral in its nature. It is something that affects other governments, other companies from other countries as well. Reaching out in that global fashion allows us to do that in ways that we might not be able to do domestically.
Mr. KEITH. I would just add that, of course, there are multilateral channels for us to address these issues as well, and that is one approach.
Another approach is the bilateral one. The tool you refer to would be one of those in our bilateral kit bag, so to speak. It seems to me, in general, our success with the Chinese has been in promoting or supporting change. Our success has been in those areas where we can point to the Chinese interests and get them to recognize their own interests, and in some areas we have had less success than others.
But to the extent that we can show them that, to get to one of the Chairman's points earlier, the question of stability, the question of attracting foreign direct investment, the question of creating the infrastructure for doing business in China are all caught up in this. All involve China's own self-interest, and, over time, our goal, from the government's perspective, is to convey to the Chinese that creating an atmosphere in which their own interests are served is convergent with our approach, which is, of course, anchored in American interests.
One of the goals in this approach would be to show the Chinese why, in the long term, they ought to do this out of their own self-interest.
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Ms. WATSON. I hope that as we preach to China or anywhere else in the world, we practice what we preach. You know, people watch everything we do. They have got this Internet ability. I understand, and you can comment on this, that the Chinese Government went into the northern and western part of their country and identified 10,000 people with the highest IQs and sent them into technological institutes for training. So we are dealing with very gifted people looking at the use of communications and the Internet in the future, and I think our country has to take into consideration their flexibility, the way they think, and the wisdom that comes out of thousands and thousands and thousands of years of living on this planet.
I hear this discussion, and I am saying, you know, people are defending, shall I say, their freedoms, and people are also defending the tapping into other's conversations and gathering information. So there is a mixed message going out there. I do not know where this country stands. So that is why I raised the question, what you thought the procedure should be, and I heard one response, that there has to be flexibility, and there has to be what they feel is in their best interest, but it has to be made public and not shrouded in secrecy. There is a tendency for this Government of ours to shroud what it does in secrecy, so we cannot have it both ways.
The other thing I want to raise is, with respect to Yahoo! and MSN having provided information to Chinese authorities, to your knowledge, are they in violation of any applicable United States laws?
Mr. GROSS. Not to our knowledge, but we will leave that, I think, to others to discuss in more detail.
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Ms. WATSON. Okay. So I think this would probably come up if we had such a task force, and I am really pleased that the Secretary of State has found it necessary to put such together. I commend that move because I think this is worthy of lots and lots of discussion and debate and not knee-jerk reactions. We really need to think it through.
We are dealing with the most populous nation on the globe with a long history. Ours is new, relatively, and so we have got to continue to have dialogue, and that is what bothers me about the way things are being done. We strike first and then want to discuss later. No. Before we make decisions that will impact on businesses in these United States as they relate to doing business in other countries, let us have thorough, complete, empirical kinds of evidence and dialogue based on that.
I think you might have responded to this question, but are there examples in other countries, say, in the Middle East, where services provided by United States Internet providers are circumscribed or monitored? Do you know?
Mr. GROSS. Yes. In fact, actually, in some respects, even the bigger problem there is the lack of the ability to compete in those markets themselves, but there are some very severe restrictions on access to information in many countries in the Middle East, and this has been a source of focus for us.
One place in which this got a lot of attention recently was Tunisia because it was the host government for the UN World Summit on the Information Society, and this was an area in which both are government and other governments as well and many NGOs and others were very outspoken about because of our strong commitment to ensuring the free flow of information.
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Ms. WATSON. Thank you. Let me end by asking that you gentlemen and the others on the panel come back. We have a responsibility in this Congress to do oversight hearings. We do not do them as often as I feel are necessary.
I was the Ambassador to the Federated States of Micronesia, and I, underground, started a newspaper just to inform the people that we had a cholera epidemic and that they should know so that they will not practice high-risk behavior. Of course, we worked it out ourselves, but I would hope that our respective Committees would do more oversight, that you would come back to us as this task force develops and let us know of your thinking and where the State Department would be in relationship to these countries and in relationship to the governments that we are concerned about.
So I will ask the Chair to hold another one of these hearings down the line so we can know the progress being made, and with that, thank you very much, Mr. Chairman, for the time.
Mr. SMITH OF NEW JERSEY. The time of the gentlelady has expired.
I want to thank our first panelists for their expert witness and testimony and, above all, for the good work you do day in and day out on behalf of freedom, freedom of information, and human rights. Thank you so much for being here.
Mr. KEITH. Thank you, Mr. Chairman.
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Mr. GROSS. Thank you, Mr. Chairman.
Mr. SMITH OF NEW JERSEY. I would like to invite our second group of panelists to the witness table, beginning first with Mike Callahan, who was appointed Senior Vice President, General Counsel, and Secretary of Yahoo! in September 2003 after previously serving as Yahoo!'s Deputy General Counsel and Assistant Secretary. Mr. Callahan is responsible for the worldwide legal affairs and public policy of Yahoo!, as well as advising the company's management and board of directors on strategic and corporate governance matters. Prior to joining Yahoo!, Mr. Callahan was with Electronics for Imaging, Inc.
We will then hear from Mr. Jack Krumholtz, who is the Managing Director of Federal Government Affairs and Associate General Counsel in the Law and Corporate Affairs Department at Microsoft. Prior to joining Microsoft, Mr. Krumholtz was an attorney with a law firm in Washington, DC, where he practiced in the legislative and government relations area. Mr. Krumholtz serves on the Advisory Council to the Congressional Internet Caucus and the Software Division Board of the Information Technology Association of America.
We will then hear from Elliot Schrage, who is responsible for corporate communications and public affairs, which encompasses media relations, stakeholder outreach, and policy strategy for Google. Prior to joining Google, Elliot was the Bernard L. Schwarz Senior Fellow in Business and Foreign Policy at the New York-based Council on Foreign Relations and an advisor to several global corporations on issues of corporate social responsibility.
And, finally, we will hear from Mark Chandler, who is Senior Vice President, General Counsel, and Secretary of Cisco Systems. He was previously General Counsel of StrataCom, Inc., which Cisco acquired in 1996, and Vice President, Corporate Development, and General Counsel of Maxtor Corporation, a Fortune 500 manufacturer of computer data storage devices. Mr. Chandler is also on the Advisory Council of the Woodrow Wilson International Center for Scholars.
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If I could ask you gentlemen if you would not mind standing and taking an oath. You would raise your right arm.
[Witnesses sworn.]
Mr. SMITH OF NEW JERSEY. Let the record show that each of our witnesses answered in the affirmative, so if we could begin with Mr. Callahan and please proceed as you would like.
TESTIMONY OF MR. MICHAEL CALLAHAN, SENIOR VICE PRESIDENT AND GENERAL COUNSEL, YAHOO! INC.
Mr. CALLAHAN. Thank you very much, Mr. Chairman, Chairmen Smith and Leach, Ranking Members Payne and Faleomavaega, and Members of the Subcommittees. I am Michael Callahan, Senior Vice President, General Counsel, and Secretary of Yahoo!. Thank you very much for the opportunity to testify before you today.
I would like to make three fundamental points. First, our principles. Since our founding in 1995, Yahoo! has been guided by beliefs deeply held by our founders and sustained by our employees. We believe the Internet can positively transform lives, societies, and economies. We believe the Internet is built on openness. We are committed to providing individuals with easy access to information. These beliefs apply in the United States. These beliefs also apply in China, where the Internet has grown exponentially over the past few years and has expanded opportunities for access to communications, commerce, and independent sources of information for more than 100 million Chinese citizens.
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Second, the Shi Tao case. The facts of the Shi Tao case are distressing to our company, our employees, and our leadership. Let me state our view clearly and without equivocation: We condemn punishment of any activity internationally recognized as free expression, whether that punishment takes place in China or anywhere else in the world. We condemn it. Mr. Chairman, we have made our views known to the Chinese Government.
Third, this hearing. We commend you, Mr. Chairman, for holding this hearing. It allows these issues to be raised in a public forum. While we absolutely believe that companies have a responsibility to identify appropriate practices in each market where they do business, we also think there is a vital role for a government-to-government dialogue of the larger issues involved. In this regard, we applaud the direction of the Secretary of State in establishing a Global Internet Freedom Task Force.
We believe these issues are larger than any one company or any one industry. We all face the same struggle between American values and the laws we must obey. Yahoo! intends to be a leader in the discussion between U.S. companies and the U.S. Government. We appeal to the U.S. Government to do all it can to help us continue to provide beneficial services to Chinese citizens lawfully and in a way that is consistent with our shared values.
Allow me to clarify Yahoo!'s current role in China. In October of last year, Yahoo! formed a strategic, long-term partnership with Alibaba.com, a Chinese company, and merged our China business with Alibaba.com. We do not have day-to-day operational control over Yahoo! China, but as a large equity investor, we have made clear our desire that Alibaba continue to apply rigorous standards in response to government demands for information about its users. I have personally discussed our views with senior management of Alibaba, as have other senior executives of Yahoo!.
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Mr. Chairman, we believe information is power. We also believe that the Internet is a positive force in China. It has revolutionized information access, helps create more open societies, and accelerates the gradual evolution toward a more outward-looking Chinese society.
The Internet has grown exponentially in China in ways that have increased China's openness to the outside world. More than 110 million in China use the Internet, with more than 400 million search queries taking place very single day. That represents an increase of almost 1,600 percent over the last 3 years.
In my prepared testimony, I mention a couple of examples in which the Internet forced the Chinese Government to be more open and more transparent. Many recent public comments, including from a researcher at the Chinese Academy of Social Sciences and a former official from the China state media, have publicly recognized that the government cannot control the Internet.
Despite these extraordinary benefits, there are severe challenges for any company operating in China and especially those in the Internet, media, or telecommunications industries.
This brings us to the case of Shi Tao. The Shi Tao case raises profound questions about basic human rights. It is important to lay out the facts. When Yahoo! China in Beijing was required to provide information about a user, who we later learned was Shi Tao, we had no information about the identity of the user or the nature of the investigation. Indeed, we were unaware of the particular facts surrounding this case until the news story emerged.
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Law enforcement agencies in China, in the United States, and elsewhere typically do not explain to information technology companies of other businesses why they demand specific information regarding certain individuals. In many cases, we do not know the real identity of these individuals for whom governments request information. Very often, our users may subscribe without using their real name to our service.
At the time the demand was made for information in this case, Yahoo! China was legally obligated to comply with the requirements of Chinese law enforcement. When we had operational control of Yahoo! China, we took steps to make sure that our Beijing operation would honor such demands only if they came from authorized law enforcement officers and only if the demand for information met rigorous standards establishing the legal validity of the demand.
When we receive a demand from law enforcement authorized under the law of the country in which we are operating, we must comply. Failure to comply in China could have subjected Yahoo! China and its employees to criminal charges, including imprisonment. Ultimately, American companies face a choice: Comply with Chinese laws or leave.
Mr. Chairman, we recognize this is not a time for business as usual. We are committing to the following. First, collective action. We will work with industry, government, academia, and NGOs to explore policies to guide industry practices in countries where content is treated more restrictively than in the United States and to promote the principles of freedom of speech and expression.
Second, compliance practices. We will continue to employ rigorous procedural protections under applicable laws in response to government requests for information, maintaining our commitment to user privacy and compliance with the law.
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Third, information restrictions. Where a government requests that we restrict search results, we will do so if required by applicable law and only in a way that impacts the results as narrowly as possible. If we are required to restrict search results, we will strive to achieve maximum transparency to the user.
Fourth, government engagement. We will actively engage in an ongoing policy dialogue with governments with respect to the nature of the Internet and the free flow of information.
The strength of this industry and the power of our user base is formidable, to be sure, but we cannot do it alone. We will do everything we can to advance our commitments. Ultimately, the greatest leverage lies with the U.S. Government.
Mr. Chairman and Ranking Members, thank you for giving me the opportunity to appear before you.
[The prepared statement of Mr. Callahan follows:]
PREPARED STATEMENT OF MR. MICHAEL CALLAHAN, SENIOR VICE PRESIDENT AND GENERAL COUNSEL, YAHOO! INC.
Chairmen Smith and Leach, Ranking Members Payne and Faleomavaega, and Members of the subcommittees, I am Michael Callahan, Senior Vice President, General Counsel and Secretary of Yahoo! Inc. Thank you very much for the opportunity to testify before you today.
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I would like to make three fundamental points here today:
First, our principles. Since our founding in 1995, Yahoo! has been guided by beliefs deeply held by our founders and sustained by our employees. We believe the Internet can positively transform lives, societies, and economies. We believe the Internet is built on openness. We are committed to providing individuals with easy access to information. These beliefs apply in the United States. These beliefs also apply in China, where the Internet has grown exponentially over the past few years and has expanded opportunities for access to communications, commerce, and independent sources of information for more than 110 million Chinese citizens.
Second, the Shi Tao case. I will discuss this in more detail later in my testimony. The facts of the Shi Tao case are distressing to our company, our employees, and our leadership. Let me state our view clearly and without equivocation: we condemn punishment of any activity internationally recognized as free expression, whether that punishment takes place in China or anywhere else in the world. We have made our views clearly known to the Chinese government.
Third, this hearing. We commend you, Mr. Chairmen, for holding this hearing. It allows these issues to be raised in a public forum and provides an opportunity for companies such as those appearing here today to ask for the assistance of the U.S. government to help us address these critical issues. While we absolutely believe companies have a responsibility to identify appropriate practices in each market in which they do business, we also think there is a vital role for government-to-government discussion of the larger issues involved.
These issues are larger than any one company, or any one industry. We all face the same struggle between American values and the laws we must obey. Yahoo! intends to be a leader in the discussion between U.S. companies and the U.S. government. We appeal to the U.S. government to do all it can to help us provide beneficial services to Chinese citizens lawfully and in a way consistent with our shared values.
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The Impact of the Internet In China
Before discussing these issues in detail, allow me to clarify Yahoo!'s current role in China. In October 2005, Yahoo! formed a long-term strategic partnership in China with Alibaba.com, a Chinese company. Under the agreements, Yahoo! merged our Yahoo! China business with Alibaba.com.
It is very important to note that Alibaba.com is the owner of the Yahoo! China businesses, and that as a strategic partner and investor, Yahoo!, which holds one of the four Alibaba.com board seats, does not have day-to-day operational control over the Yahoo! China division of Alibaba.com. The Alibaba.com management team runs the business; however, as a large equity investor, we have made clear our desire that Alibaba.com continue to apply rigorous standards in response to government demands for information about its users. I have personally discussed our views with senior management of Alibaba.com, as have other senior executives of Yahoo!.
Mr. Chairmen, we believe information is power. We also believe the Internet is a positive force in China. It has revolutionalized information access, helps create more open societies, and helps accelerate the gradual evolution toward a more outward-looking Chinese society.
The Internet has grown exponentially in China in ways that have increased China's openness to the outside world. More than 110 million people in China use the Internet. A growing Chinese middle class is benefiting from improved communication, technology, and independent sources of information. Online search, a core Yahoo! China service, is used by 87% of the online population in China, with more than 400 million search queries taking place every day. This represents an increase of almost 1600% over just the last three years. Unlike virtually any medium that has preceded it, the Internet allows users to access the information they want when they want it.
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The number of people communicating with each other over the Internet has also increased dramatically. The number of active mailboxes has grown by 88% to 166 million, and those using instant messaging has risen to 87 million, doubling in just three years.
Let me give you a couple of examples of the power of the Internet in China. In November 2002, a new respiratory illness developed in southern China. This illness spread to other areas of China and in Asia. Initially, state media did not report widely on the outbreak, limiting access to information on SARS in China. However, word spread quickly through channels on the Internet, alerting people in China and around the world of the severity of the epidemic. The Internet forced the Chinese government to be more transparent and to vigorously attack the problem.
Another example is currently highlighted on the Human Rights Watch website. Human Rights Watch, with which we have consulted on these issues, tells the compelling story of how the Internet helped spread the word in China about the tragic death of a young college graduate named Sun Zhigang while in police custody. A storm of online protests led to the abolition of the law used to detain Mr. Sun. Human Rights Watch's website states, ''[t]he Sun Zhigang case showed how Internet activists and journalists could mobilize an online uprising that produced real change.''(see footnote 1)
Experts in China and the United States agree on the liberalizing impact of the Internet in China. Please note the comments of a Chinese Academy of Social Sciences researcher in the New York Times last week. This expert stated, ''At first, people might have thought it [the Internet] would be as easy to control as traditional media, but now they realize that's not the case.''(see footnote 2)
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Finally, I would commend to you a 2002 report by the well-respected RAND Corporation that made an even bolder conclusion. It concluded that the Internet has allowed dissidents on the mainland to communicate with each other with greater ease and rapidity than ever before.(see footnote 3)
But even with these extraordinary benefits, there are severe challenges for any company operating in China, and particularly for those in the Internet, media, or telecommunications industries. This Committee correctly highlights the fundamental conflict between the extraordinary powers of the Internet to expand opportunities for communication and access to information with the obligations of companies doing business in China to comply with laws that may have consequences inconsistent with our values. This brings us to the case of Shi Tao.
The Facts Surrounding the Shi Tao Case
The Shi Tao case raises profound and troubling questions about basic human rights. Nevertheless, it is important to lay out the facts. When Yahoo! China in Beijing was required to provide information about the user, who we later learned was Shi Tao, we had no information about the nature of the investigation. Indeed, we were unaware of the particular facts surrounding the case until the news story emerged. Law enforcement agencies in China, the United States, and elsewhere typically do not explain to information technology companies or other businesses why they demand specific information regarding certain individuals. In many cases, Yahoo! does not know the real identity of individuals for whom governments request information, as very often our users subscribe to our services without using their real names.
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At the time the demand was made for information in this case, Yahoo! China was legally obligated to comply with the requirements of Chinese law enforcement. When we had operational control of Yahoo! China, we took steps to make clear our Beijing operation would honor such instructions only if they came through authorized law enforcement officers and only if the demand for information met rigorous standards establishing the legal validity of the demand.
When we receive a demand from law enforcement authorized under the law of the country in which we operate, we must comply. This is a real example of why this issue is bigger than any one company and any one industry. All companies must respond in the same way. When a foreign telecommunications company operating in the United States receives an order from U.S. law enforcement, it must comply. Failure to comply in China could have subjected Yahoo! China and its employees to criminal charges, including imprisonment. Ultimately, U.S. companies in China face a choice: comply with Chinese law, or leave.
Let me take this opportunity to correct inaccurate reports that Yahoo! Hong Kong gave information to the Chinese government. This is absolutely untrue. Yahoo! Hong Kong was not involved in any disclosure of information about Mr. Shi to the Chinese government. In this case, the Chinese government ordered Yahoo! China to provide user information, and Yahoo! China complied with Chinese law. To be clear—Yahoo! China and Yahoo! Hong Kong have always operated independently of one another. There was not then, nor is there today, any exchange of user information between Yahoo! Hong Kong and Yahoo! China.
Next Steps
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Yahoo! continues to believe the continued presence and growth of the Internet in China empowers its citizens and will help advance Chinese society. The alternative would be for these services to leave China—a move we believe would impede Chinese citizens' ability to communicate and access independent sources of information. But we recognize this cannot be a time for business as usual.
As part of our ongoing commitment to preserving the open availability of the Internet around the world, we are committing to the following:
Collective Action: We will work with industry, government, academia and NGOs to explore policies to guide industry practices in countries where content is treated more restrictively than in the United States and to promote the principles of freedom of speech and expression.
Compliance Practices: We will continue to employ rigorous procedural protections under applicable laws in response to government requests for information, maintaining our commitment to user privacy and compliance with the law.
Information Restrictions: Where a government requests that we restrict search results, we will do so if required by applicable law and only in a way that impacts the results as narrowly as possible. If we are required to restrict search results, we will strive to achieve maximum transparency to the user.
Government Engagement: We will actively engage in ongoing policy dialogue with governments with respect to the nature of the Internet and the free flow of information.
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Let me make one final comment about the role of the U.S. government. We urge the U.S. government to take a leadership role on a government-to-government basis. The Internet industry in the United States, including the companies appearing before you today, have changed the way the world communicates, searches for, discovers, and shares information. No other medium in history has the potential to effect such great change so rapidly. We operate businesses that transcend boundaries, in a world of countries and borders. The strength of this industry and the power of our user base is formidable to be sure. But, we cannot do it alone. We will do everything we can to advance these principles. Ultimately, the greatest leverage lies with the U.S. government.
Chairmen Smith and Leach, Ranking Members Payne and Faleomavaega, and Members of the subcommittees, thank you for giving me the opportunity to appear before you. We welcome this chance to have a frank and open dialogue about this important issue. We are grateful for your willingness to understand the difficult challenges we face, and to help us as we work together to protect the ability of the citizens of the world to access communication, commerce, and independent sources of information. I would be happy to answer your questions.
Mr. SMITH OF NEW JERSEY. Mr. Callahan, thank you so very much.
Mr. Krumholtz?
TESTIMONY OF MR. JACK KRUMHOLTZ, MANAGING DIRECTOR OF FEDERAL GOVERNMENT AFFAIRS AND ASSOCIATE GENERAL COUNSEL, MICROSOFT CORPORATION
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Mr. KRUMHOLTZ. Chairman Smith, Ranking Member Payne, Chairman Leach, Ranking Member Faleomavaega, and Members of the Subcommittee, Microsoft welcomes the opportunity to address the issues surrounding Internet-based services in China. We are deeply concerned about recent events that have prompted widespread public concern over matters of individual security and government control of Internet content in that country, and we are actively seeking ways of reducing risks to individual users while maximizing the availability of information and opinion through these services.
My written testimony elaborates on the challenges companies like Microsoft face in providing Internet services in countries whose laws and free speech protections do not mirror our own. In the interest of time, I would like to focus my remarks on three main points.
First, Internet services like Microsoft MSN Spaces which host personal Web sites or ''blogs'' are having a major positive impact in China despite the effort by various agencies of the Chinese Government to control certain kinds of political content. In just the past few years, we have seen repeated examples in China of official responses to domestic developments that have been shaped for the better because of information provided and opinions expressed over the Internet. Most prominent have been reports about the government's handling of health issues, such as SARS and Avian flu, many of them circulated by personal Web sites.
While there are competing blog services offered by some Chinese companies, Microsoft's service, which was launched less than 9 months ago, is now the largest, with more than 3.5 million users. The overwhelming majority of Internet-based communications and search are not politically oriented, but a survey of Chinese Internet users found that 48 percent believe that by going online, the Chinese will learn more about politics, and 60 percent believe that the Internet will provide more opportunities for criticizing government.
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Mr. Chairman, this is the powerful reality of the Internet in China today. The Internet has already transformed the economic, cultural, and political landscape of China. It is vital that companies, particularly American companies, with the widest array of communications and information services, continue to offer services there.
Second, Microsoft is committed to working with governments, industry, and other stakeholders to protect the best interests of our customers, but enacting legislation that effectively forces us to withdraw from China would be counterproductive. We recognize from conversations with Members and staff of these Subcommittees that you have strong concerns that American companies somehow embrace Chinese censorship of the Internet. Let me assure you that that is not the case. Microsoft is deeply troubled by the restrictive regulations we operate under in China. We comply with them only to the extent required by law. However, to suggest that we can resist or defy these regulations assumes a much different reality than the one we deal with in China on a regular basis.
While we are actively exploring how best to protect the interests of our users under these circumstances, we do not have the influence or leverage to pressure the Chinese into changing their regulations or refraining from enforcing them. At the same time, we are not suggesting that compliance with local law is a matter of deferring reflexively to local authorities or endorsing any specific policy or ideology.
The simple fact is that there is not a government in the world, including the United States, which would accept the proposition that companies can set their own terms of operation in defiance of local law. Moreover, there are Chinese competitors for our services, competitors who would like nothing better than to see us forced to stop offering them in China.
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Ultimately, we must ask ourselves, will the Chinese citizens be better off without access to our services?
Third, the issues we face are global in scope. It is essential that the U.S. Government play an active role in building a consensus for the widest possible availability of information over the Internet. The Internet raises issues of legitimate governmental concern, including matters of privacy, child safety, and national security, but authorities around the world have made different judgments about the standards appropriate to their cultures and national circumstances. The Chinese effort to manage content on the Internet is just the most troubling of these fundamental differences.
It is, therefore, the responsibility of governments, with the active leadership of the United States, to seek to reduce or reconcile these differences in order to protect the value and power of the Internet on a global basis. Here again, companies like Microsoft can play an active role in supporting such efforts to promote a deeper consensus across many nations.
We, therefore, welcome yesterday's announcement by the Secretary of State creating the Global Internet Freedom Task Force and look forward and are committed to working with that group.
What Microsoft will continue to do is what we do best: Provide the technologies and services that enable individuals and organizations to harness the power of the Internet for their own purposes. We think that the trend of history will continue to come down on the side of openness and transparency, as it has increasingly been doing in China and as it will ultimately do everywhere else.
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Thank you for the opportunity to discuss these issues with the Subcommittees, and we look forward to working with you on this important issue.
[The prepared statement of Mr. Krumholtz follows:]
PREPARED STATEMENT OF MR. JACK KRUMHOLTZ, MANAGING DIRECTOR OF FEDERAL GOVERNMENT AFFAIRS AND ASSOCIATE GENERAL COUNSEL, MICROSOFT CORPORATION
Microsoft welcomes the opportunity to address the issues surrounding Internet-based services in China. We are deeply concerned about recent events that have prompted widespread public attention to issues of individual security and government control of Internet content in that country. And we are actively seeking ways of maximizing the availability of information and opinion through these services while reducing the risks to individual users.
Microsoft believes that issues of Internet content and customer security go to the heart of our values as a company. The Internet should be fostered and protected as a worldwide vehicle for reliable information and communications, personal expression, innovation and economic development. Microsoft seeks to advance that objective by providing services such as our free Hotmail email service, and free personal websites or ''blogs'' on the MSN Spaces service, as well as reliable access through the MSN portal to the millions of websites that have made the Internet such a magnet for education, commerce, entertainment, and, increasingly, for personal communications and expression.
Global Dimensions
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At the same time, the Internet raises issues that often justify government attention, especially on matters of individual privacy, law enforcement, and national security. On some of these issues, governments around the world have made differing judgments about the legal standards and policy trade-offs appropriate to their own cultures and national circumstances—in many cases issuing regulations or codes of conduct that define limits on permissible content and prescribe procedures for identifying authorship. While the exercise of governmental responsibilities is usually well-intentioned and limited, it is critically important for the future of the Internet—and thereby for the future of the global community and economy as a whole—that all governments address these issues with deliberation and restraint. Legal and regulatory steps should be taken only with the utmost attention to their wider consequences—including the impact on individuals, enterprises and societies far beyond the borders of the initiating countries. International meetings and bilateral consultations may increasingly help to promote the consistency of national actions and to maximize the openness, security and reliability of the Internet platform. Indeed, the greatest influence over time on national policies affecting the Internet, including those of the Chinese government, is likely to come from a combination of bilateral and multilateral processes of consultation and consensus-building. But the global consultative process is only just beginning to unfold.
In this regard, the U.S. government has a particularly important role to play. As the leading nation in the development and enhancement of the Internet, the United States has a special responsibility to engage in shaping the political context that will keep it flourishing responsibly. For that reason, the United States should intensify its vital leadership on these issues and initiate discussions with other governments—both bilateral and multilateral—to address restrictions on Internet content that might otherwise create major impediments to the utility of the medium and present unnecessary risks to individual users.
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The private sector also has a vital role to play. While retaining its leading role in developing the technologies and standards that protect Internet security and reliability, industry should advocate policies and principles that maximize the value of the Internet for individual users, including basic protections for freedom of expression, commercial integrity and the reliability of information. We have initiated consultations with the companies at this hearing and others to consider the kinds of principles that would advance these values effectively on an industry basis. But, in the end, the legal framework in any particular jurisdiction is not one that private companies are in a position to define for ourselves. National law and policy set parameters in every country in which we do business, and private companies are required to give them due deference as a condition of engaging in business there.
That does not mean that compliance with local law is a matter of deferring reflexively to local authorities or endorsing any specific policy or ideology. Restrictions on content should involve ongoing consultations in which the objective of private operators is to protect the integrity of their services and the privacy of their customers. Where the safety and security of individuals is at stake, it is incumbent on both governments and private companies to assure that requests for customer information in particular are subject to the highest available standards of legal process. When that information is not maintained in the country concerned, such requests necessarily invoke international agreements that require established government-to-government procedures. When it is maintained in the United States, private operators clearly must comply with applicable U.S. laws protecting on-line privacy, such as the Electronic Communications Privacy Act (ECPA). In addition, Microsoft will seek to provide appropriate notice and transparency to our customers about the standards that will be applied to their communications and the risks they may run if those standards are violated.
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Let me be clear on one point: Microsoft will continually review the overall value of our services in any particular country and the conditions created by government policies and practices. If we conclude that those practices undercut or completely compromise the value to customers of our services in that jurisdiction, we will consider withdrawing those services until such conditions improve. But we must always keep squarely in mind whose interests would be best served by such a withdrawal. Will the citizens of that country be better off without access to our services, or will their absence just vindicate those who see our presence in the country as threatening to their official or commercial interests?
China as a Special Case
Microsoft is keenly aware that China presents a special case. Various agencies of the Chinese government are engaged in a substantial effort to manage the kinds of information available to Chinese citizens through the mass media. This effort includes specific regulations restricting the publication on the Internet of news-related content related to ''current events news information, reporting and commentary relating to politics, economics, military affairs, foreign affairs, and social and public affairs, as well as reporting and commentary relating to fast-breaking social events.'' These regulations allow government authorities to restrict content for any of a number of reasons ranging from ''harming the honor or the interests of the nation'' to ''disrupting the solidarity of peoples'' to ''disrupting national policies on religion, propagating evil cults and feudal superstitions'' and ''spreading rumors, disturbing social order, or disrupting social stability.''(see footnote 4) And these regulations encompass the kinds of Internet-based services provided by Microsoft's MSN division. The Chinese government's approach on these matters is well documented in a Report issued just this month by the well-respected NGO Freedom House.(see footnote 5)
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Yet, despite those efforts and the serious consequences for individuals who get caught up in the censorship process, the Internet has already transformed the economic, cultural and political landscape of China. In particular, it has had an enormous impact in increasing public access to information. To quote the Freedom House Report:
''While the state has expended considerable effort to limit Chinese access to web pages deemed politically subversive, many users find ways to access blocked Internet sites by using proxies or anti-blocking software. The Internet has increased the speed and convenience of accessing information and decreased the financial costs of interpersonal communication . . .''
This is the powerful reality in China that we must not lose sight of in our concern for the worst cases of recent times. One recent independent survey of Chinese Internet users found that ''48% percent of Internet users believe that by going on line the Chinese will learn more about politics, and 60% of users believe the Internet will provide more opportunities for criticizing the government.'' [Emphasis added.](see footnote 6)
As described in a New York Times report last week from Shanghai, the Internet offers the best opportunity for ordinary citizens in China to communicate their own observations and opinions and to report the facts about important local events.(see footnote 7) Just in the past few years, there have been repeated examples in China of the ways in which official responses to domestic events have been affected by the availability of information and opinions communicated over the Internet. Most prominent have been reports and commentary about the handling of health issues, such as SARS, Avian flu, HIV/AIDS and water contamination. They demonstrate the important role played by the kinds of services that companies like Microsoft provide over the Internet. Since its introduction in China last May, our MSN Spaces blogging service has attracted more than three and a half million users and over fifteen million unique readers, making it the #1 such service in China. As our General Counsel, Brad Smith, noted in reviewing our policies on these services:
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We think that blogging and similar tools are powerful vehicles for economic development and for creativity and free expression. . . . We believe that it's better to make these tools available than not.
Therefore, based on grounds of human rights and freedom of expression alone, Microsoft believes that we should continue to provide our Internet-enabled services in China. That is a judgment that we will continue to evaluate over time, drawing on the best advice we can get, including the opinions of the Members of Congress who follow these issues in China with great interest. If, on the other hand, the outcome of these hearings is to make it impossible for us to continue these services in China—either because of conditions imposed by our government, or because of further actions on the part of the Chinese government—we believe that the Chinese people would be the principal losers—being denied an important avenue of communication and expression.
Microsoft Concerns
Let there be no misunderstanding about the values that underlie Microsoft's decisions on this matter. Our people—from the senior management of the company to the more than 60,000 employees all over the world, including more than 2500 in China itself—care deeply about the impact of our services on the people we serve. We are actively reviewing all of our policies and practices to identify the best ways to protect customers, while providing the widest possible array of information sources.
The example that has received the most attention to our services in China involved the removal of a well-known blogging site on MSN Spaces authored under the pseudonym of ''Michael Anti'' at the request of the Chinese government. The details of that case have been carefully reviewed, and although we do not think we could have changed the Chinese government's determination to block this particular site, we regret having to do so and have since clarified the manner in which we will deal with similar requests in the future. Those policies seek to assure three things:
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First, explicit standards for protecting content access: Microsoft will remove access to blog content only when it receives a legally binding notice from the government indicating that the material violates local laws, or if the content violates MSN's terms of use.
Second, maintaining global access: Microsoft will remove access to content only in the country issuing the order. When blog content is blocked due to restrictions based on local laws, the rest of the world will continue to have access. This is a new capability Microsoft is implementing in the MSN Spaces infrastructure.
Third, transparent user notification: When local laws require the company to block access to certain content, Microsoft will ensure that users know why that content was blocked, by notifying them that access has been limited due to a government restriction.
Our ongoing reviews may result in other changes of policy as we continue to examine our options and seek the input of a broad array of experts. In addition to active discussions within the industry and with the Executive branch, we have been meeting with NGO's focused on issues of human rights in China and will continue those discussions. We are seeking the advice of recognized experts on China to better understand the dynamics and trends affecting the issues we are addressing here. And we will continue to discuss these issues with Members of Congress, including testimony before appropriate Committees such as this one.
Industry Influence
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Finally, let me address the suggestion that Microsoft alone, or in collaboration with other companies in our industry, should be able to change the standards enforced by the Chinese government—or alternatively, to negotiate the manner in which we choose to comply with those standards. Some commentators assert that we are in a position to temper or delay our degree of compliance with Chinese law and criminal process without losing our license to do business in China. Some have even suggested that we have not tried to pressure the Chinese government in this regard because we seek to curry favor for commercial reasons. These arguments ignore the basic realities of doing business, not only in China, but in most other countries.
Indeed, witnesses at the Congressional Human Rights Caucus two weeks ago suggested or implied that private companies should never provide information to governments about the identity of customers or agree to any sorts of restrictions on Internet content. But the simple fact is that there is not a government in the world, including our own, which would accept such an assertion by a private company seeking to do business within their jurisdiction. Indeed, it is a well-established principle of international jurisdiction that global Internet companies have to follow the law in the countries where they provide services to local citizens, even when those laws are different from those in their country of origin.(see footnote 8) Taking the contrary position in defiance of government directives would be tantamount to inviting sanctions—up to and including the prosecution of our employees, the termination of our services in-country and even exclusion of the company from doing business in the country entirely.
When pressed on this point, most observers would no doubt concede that there are circumstances—such as instances of kidnapping, child abuse, or cyber-attack—when the apprehension of serious criminals justifies cooperation with law enforcement authorities even in authoritarian societies—so long as law enforcement is not used as a pretext for political repression. Yet in practice, when companies face law enforcement requests of this kind, there is little room to question the motivations or and second-guess the judgments made by officials in these cases.
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In the end, the issue comes back to a difficult judgment of the risks and benefits of these powerful technologies, not just in China, but in a wide range of societies where cultural and political values may clash with standards of openness and free expression. Microsoft cannot substitute itself for national authorities in making the ultimate decisions on such issues. What Microsoft will do is provide the technologies and services that enable individuals and organizations to harness the power of the Internet for their own purposes—if allowed to do so. And we will continue to advocate that people should have the maximum opportunity to use these technologies in exercising those decisions for themselves.
We think that the trend of history and the impact of technology will continue to come down on the side of greater openness and transparency—as it has in China, and as it is likely to do elsewhere. As our Chairman, Bill Gates, said recently in answer to a question about Internet censorship:
''You may be able to take a very visible Web site and say that something shouldn't be there, but if there is a desire by the population to know something, it is going to get out.''
Thank you for this opportunity to address the Subcommittees on these important matters.
Mr. SMITH OF NEW JERSEY. Thank you, Mr. Krumholtz.
Mr. Schrage?
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TESTIMONY OF MR. ELLIOT SCHRAGE, VICE PRESIDENT FOR CORPORATE COMMUNICATIONS AND PUBLIC AFFAIRS, GOOGLE, INC.
Mr. SCHRAGE. Chairman Leach, Chairman Smith, Ranking Members Payne and Faleomavaega, and Members of the Committee, my name is Elliot Schrage, and I am the Vice President of global communications and public affairs at Google. I have submitted my full testimony for the record and will be very brief with my oral testimony.
What I would like to do is provide a little context and then just make a few points. Google was founded in 1998 with a business mission to organize the world's information and make it universally accessible and useful. For almost 6 years, we have been offering a Chinese language service that is unfiltered and uncensored for all users worldwide.
Since at least 2002, however, our users in China have experienced increasingly difficult, severe problems, indeed, accessing our service. As a result, we faced a difficult choice: Compromise our mission by failing to serve our users in China or compromise our mission by entering China and complying with Chinese laws that require us to censor search results.
Mr. Chairman, in an imperfect world, we had to make an imperfect choice. Based on what we know today and what we see in China, we believe our decision to launch the google.cn service, in addition to our google.com service, is a reasonable one, better for Chinese users and better for Google.
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As I said, there are four points about the decision that I would like to highlight today.
First—our decision to create a presence, any presence, inside of China was a difficult one. Self-censorship, like that which we are now required to perform in China, is something that conflicts deeply with our core principles. We recognize the conflict and the inconsistency. We respect the opinions of those, including several Members of this Committee, who disagree with the decision that we have taken. But how did we reach our decision?
Point number two—we reached our decision by balancing three commitments: First, our commitment to user interests, our commitment to access to information, and our commitment to responding to local conditions. Our business commitment is to satisfy the interests of our users in China, to offer them great search product, speed, reliability, and, yes, privacy and confidentiality of their search results and information. That is how we built a successful business in the United States, and that is how we plan to build that business around the world. Second is our conviction that expanding access to information will make our world a better, more informed, and freer place. And, third, our need to be responsive to local conditions. In most countries, this, frankly, is not a challenge, but in China it most certainly is. Balancing these three interests, we have determined that we can do the most for our users and do more to expand access to information if we accept the censorship restrictions required by Chinese law.
So, point three—what are we offering in China? What we have done inside China is to offer a new site, an additional site, google.cn, which is a complement to our google.com service. We have offered google.cn as a search Web site inside China for Chinese users. The new service will have significant advantages over its local competitors, we believe. It will be faster, more reliable, with more and better search results for all but a handful of, yes, politically sensitive search requests. We are not happy about it, but that is the requirements. At the same time, google.cn has crucial protections for our users. We will provide them disclosure when we are filtering. We will protect their privacy and confidentiality, and for those reasons who want to seek unfiltered results, we will continue to make the unfiltered results available through google.com.
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The last point is—we are new to this. It is not appropriate to say that we are proud of our decision. It is just too early to say that. Our hope is that the decision will prove to be the right one. If, over time, we are not able to achieve our objectives to continue to balance those interests in China, we will not hesitate to reconsider doing business in that market.
Finally, I would like to offer two suggestions for the industry and for this Committee. First, absolutely, there is a role for joint industry action. We certainly can and should come up with common principles around such issues as disclosure and transparency, perhaps public reporting of the kinds of censorship requests we get, as well as best practices for protecting user data.
And certainly also, finally, there is a role for government. We do need your help, and you can help us. For example, censorship should become a central part of the bilateral and multilateral trade agenda. We could, for example, treat censorship as a barrier to trade and raise that issue in appropriate fora.
I look forward to your questions, and thank you again for this opportunity.
[The prepared statement of Mr. Schrage follows:]
[Note: Image(s) not available in this format. See PDF version of this file.]
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Mr. SMITH OF NEW JERSEY. Thank you very much.
Now, Mr. Chandler?
TESTIMONY OF MR. MARK CHANDLER, VICE PRESIDENT AND GENERAL COUNSEL, CISCO SYSTEMS, INC.
Mr. CHANDLER. Chairman Smith, Chairman Leach, Ranking Members Payne and Faleomavaega, my name is Mark Chandler, and I am Senior Vice President and General Counsel of Cisco Systems. We have also submitted a statement for the record, and I will, therefore, offer a brief summary of views this afternoon.
We appreciate the opportunity to address these very serious issues. Cisco strongly supports freedom of expression on the Internet, and we respect the conviction of those who have brought these concerns forward.
The Committee is exploring the question of Chinese Government censorship of the Internet. In that regard, Cisco does not customize or develop any specialized or unique capabilities in order to enable different regimes to block access to information. Cisco sells the same equipment to China that we sell worldwide. Cisco is not a service or content provider or network manager, and Cisco has no access to information about individual users of the Internet.
Cisco does aspire to provide open access to the world's information resources to all people everywhere. We support the UN Global Compact on Human Rights, and we comply fully with all of our national laws, which, in the interest of both national security and human rights, prohibit the sale of our products to certain destinations and users, and that includes the Foreign Relations Authorization Act passed by the Congress in the wake of the Tiananmen Square incident.
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Cisco was founded 22 years ago by two computer scientists at Stanford in order to enable communication between different computer systems. Today, we have 40,000 employees, nearly 30,000 of whom are here in the United States, and annual sales of almost $27 billion, and our mission of connecting the world has not changed.
Some describe us as the plumbers of the Internet since our technology constitutes the pipes that connect Point A to Point B. Our products were first used in private corporate networks, but when the public Internet emerged in the nineties, our products found worldwide application. When you send an e-mail in your office to your children or grandchildren, that e-mail is routed through equipment provided by Cisco or our competitors.
Because our products are designed to interconnect and expand communications systems worldwide, we build to open global standards. Almost a billion people use the Internet today. The key to the Internet's success today, and to expanding free expression in the future, is standardization on one global Internet, including China, and that remains the core of Cisco's mission.
Now, networks cannot function without network management and security protection capabilities. Otherwise, network administrators could not protect us against hackers who want to try to shut down the Internet or steal personal information. Companies could not stop employees from illegally downloading music of video that is copyrighted or from accessing computer viruses. Libraries and parents could not control access to pornography. This generic blocking capability is available from all major manufacturers, including at least a dozen United States, Canadian, European, and Chinese companies.
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These same capabilities which are essential to operate a network are used in some countries to censor political expression on the Internet. While this hearing is focused on China, the issue is, unfortunately, global. As you have heard, some Middle Eastern countries block sites which are critical of their leadership, for example. Cisco, however, has not, and does not, design products for the purpose of political censorship.
Because of threats to networks around the world, there is no safe way to disable those capabilities that may also be used to block access for political reasons. While I cannot speak to the many other companies who have been cited as providing these sorts of functions to the Chinese authorities, these capabilities in Cisco's equipment are off the shelf, and their designated uses are essential.
I will close with one observation. Legislation or other action which encourages governments to build their own Internets will reduce free expression. Last year, the Chinese authorities proposed a special standard to allow Chinese companies alone to manufacture certain equipment for accessing the Internet. Our Government resisted that proposal, and we urged continued action in that regard. The power of the Internet to expand free expression depends on there being one global Internet.
Efforts are underway, often driven by anti-U.S. activists, to balkanize the Internet. Policies which promote that, even inadvertently, will undermine rather than support the many projects which you cited, Chairman Smith, and which Congressman Rohrabacher cited which help users evade censorship.
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Around the world, those who fear the liberating power of ideas will seek to use their own power to block free expression. With the right policies, censorship will fail. The Internet is not just a source of information, but it is a beacon of hope, and we must do everything we can to keep it that way. Thank you.
[The prepared statement of Mr. Chandler follows:]
PREPARED STATEMENT OF MR. MARK CHANDLER, VICE PRESIDENT AND GENERAL COUNSEL, CISCO SYSTEMS, INC.
Mr. Chairman, Members of the Subcommittee:
My name is Mark Chandler, Senior Vice President and General Counsel of Cisco Systems. Thank you for the opportunity to address some very important and difficult issues. Cisco strongly supports free expression and open communication on the Internet, and we respect the strength of conviction of those who have brought these concerns forward.
The Committee is exploring the question of Chinese government censorship of the Internet. In this regard:
Cisco does not customize, or develop specialized or unique filtering capabilities, in order to enable different regimes to block access to information
Cisco sells the same equipment in China as it sells worldwide
Cisco is not a service or content provider, or network manager
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Cisco has no access to information about individual users of the Internet
Cisco does, however, comply with all U.S. Government regulations which prohibit the sale of our products to certain destinations, or to certain users or to those who resell to prohibited users. We have not sold and do not sell our equipment to the countries listed on the U.S. Department of Treasury's OFAC (Office of Foreign Assets Control) list of embargoed nations, and we comply fully with all aspects of the Foreign Relations Authorization Act passed by Congress in the wake of the Tiananmen Square incident.
Cisco has played a leading role in helping to make Internet technology ubiquitous, allowing hundreds of millions of people in nearly every nation around the world to access information and ideas previously unavailable or inaccessible. Because our products are designed to expand the reach of communications systems, we build to open, global standards. We do not design custom or closed Internet systems. The Internet technology may not be perfect—and the Internet itself can be misused—but there has been no greater force in spreading the power of ideas than the single worldwide Internet. The key to its growth and the flow of information it enables has been the standardization of one global network. This has been and remains the core of Cisco's mission.
Cisco was founded 22 years ago by two computer scientists at Stanford University who were seeking a way to exchange information between different computer systems in two different departments. At that time, such communication was very difficult if not impossible even within a college campus, although today it is, of course, common across the world. Our founders developed a device to communicate between their disparate computer systems. This became the first product of Cisco Systems, known as a router. Today we are a leading supplier of Internet equipment. We employ nearly 30,000 people in the United States and 10,000 overseas. We have annual sales of approximately $27 billion, and we hold over 2,000 issued US patents and have applied for over 3,000 more.
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Networking equipment (routers and switches) forms the core of the global Internet and most corporate and government networks. Cisco makes the equipment that makes the Internet and networking work. We are often described as the ''plumbers'' of the Internet, as our technology constitutes the ''pipes'' that connect point A to point B. Originally our products were designed for communications within private or enterprise networks. When the public Internet emerged in the mid '90s, our products found immediate application for worldwide use. We now have many competitors around the world who build products that perform similar functions. When you send an email in your office to your children or grandchildren, the digital language that makes up that email is routed through equipment made by Cisco or our competitors.
Networks that existed in the early 1970s would eventually evolve into the Internet, but at the time Cisco was founded, the Internet as we know it today did not exist. As the Internet grew, it moved from societal novelty to a critical part of the communications infrastructure of our country and the world. It unfortunately also became the target of attacks, the intended result of which was to attempt to reduce its capability to operate by impeding or entirely preventing its ability to provide communications services to millions of users. These attacks can take many forms, some of which are referred to as worms, viruses, denial of service attacks, and more. Network management and security capabilities—including technology generically referred to as filtering—are essential to mitigate attacks and thus enable information flow. No network can be administered without the ability to manage and protect the information that flows through it. Without this capability, it would not be possible to operate the Internet and the Internet would likely not exist as it does today.
The technology that is used to manage and protect against hackers or websites that host viruses is also the same generic technology that allows libraries and parents to filter or control internet access by children, such as via AOL's parental controls, or block pornography or the illegal downloading of copyrighted material. If, for example, a network administrator knows that a certain website is dangerous to her network because a virus or spyware has been downloaded from that site, or because the site is pornographic, she can use IP address blocking (each website and user on the Internet has an IP—Internet Protocol—address—the equivalent of a phone number) to protect her network from that site. This technology is a customary part of network management software of all major suppliers of Internet equipment—Cisco's and our competitors'—and is basic to network functionality. Whether for security or the management of information, the technology is one and the same. The filtering that occurs is implemented by the owner or administrator of the network using technology that is available regardless of the manufacturer.
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Some countries have chosen to restrict or limit access to information on the Internet based on political considerations, rather than on the freedoms that we enjoy in this country. While many have commented on the activities of the Chinese government in this regard, the issue is, in fact, global. Some Middle Eastern countries block sites critical of their leadership. And judicial action has been taken in France due to the failure of an operator to block French users' access to some types of information. Cisco however has not and does not design products to accommodate political censorship. The tools built into our products that enable site filtering are the same the world over, whether sold to governments, companies or network operators. The features in our equipment are ''off the shelf'' and not altered in any way for any market or region. Similar technology is available from at least a dozen other US, Canadian, European and Chinese companies. Because of threats to network operations, which exist around the world, there is no way to market equipment without these capabilities. The management of information flow by a customer cannot be prevented by Cisco unless we are to also prevent the originally intended use of this technology, which would expose the Internet to the full risks of inevitable daily attacks. Networks attached to the Internet would literally stop working.
Our innovative products have helped lead the world into the Internet age and are truly changing the way the world lives, works, learns and plays. For instance, since our entry into the Chinese market in 1994, the number of Chinese accessing the global Internet has grown from 80,000 in 1995 to over 130,000,000 in 2005—a 1625% increase in the past 10 years. While Cisco certainly cannot take credit for all of the Internet growth in China, it shows that the appetite for information via the Internet is nearly impossible to contain. Is there any question that the Internet has provided to hundreds of millions of people access to information from around the world in a volume and with a speed unthinkable even a decade ago?
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For some, the Internet is a tool that liberates individuals from the constraints of time and distance, empowering those who previously had no access to the world's store of information. Some are fearful of this liberation as they see the Internet as a mechanism for empowering non-state actors. Still others see the Internet as a tool used by governments to control content.
Any policy response to this divergence in views is necessarily complex. It must, however ensure the continuation of a single, worldwide Internet if the goal of global free expression is ever to be achieved. Among the questions most pertinent: Has the Internet helped spread a dramatic increase in access to information in regions where content is nonetheless subject to certain limitations? Does active engagement in such countries help to influence policy decisions? What policies will best help foster the ability to overcome censorship? If countries that engage in censorship are to be denied US Internet technology, will those countries establish closed-standard Internets of their own to further restrict access to information? In our view, legislation or other action which encourages governments to build their own Internets will reduce free expression. Last year, the Chinese authorities proposed a special standard to allow Chinese companies alone to manufacture Internet equipment for China involving the use of encryption. Our government resisted that proposal, and we urge continued action in that regard. The power of the Internet to expand free expression depends on there being one global Internet. Efforts are underway, as illustrated in the attached article, to balkanize the Internet. Policies which promote that—even inadvertently—will undermine rather than support the many projects which help users evade censorship and will exacerbate rather than solve the problems we are discussing today.
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The liberating power of the Internet depends on its existence as one global Internet. Its advent is a powerful force and its capabilities broad. Any policies in this area should, we believe, proceed from the realization that its very global nature provides a unique tool for the dissemination of ideas and cultivation of freedoms. We should do nothing to disturb its promise.
Thank you for inviting us to appear before you today.
Mr. SMITH OF NEW JERSEY. Thank you very much for your testimony. Thank you all for your testimony.
First of all, before I ask some questions, if we could just dim the lights for a moment, I just want, for the purposes of the Members who have not done this—I spent several hours doing it myself 2 days ago and last week—if you go to google.cn and also go to google.com and ask the same or put in the same phrase or word, you get two entirely different outcomes.
If you put in ''Tiananmen Square'' and go to google.com, which is obviously what is available to every one of us here, you get pictures of the atrocities that were committed in Tiananmen Square against peaceful protestors. Let me just say parenthetically, I mentioned at the outset that I have held a number of hearings on human rights issues in China.
One of those hearings was when Choha Tien, who was the defense minister of the People's Republic of China, came and visited, he got a 19-gun salute by the Clinton Administration, which I thought was inappropriate. But he said at the Army War College that nobody died in Tiananmen Square. Well, at home, he is used to getting away with that kind of information and those kinds of big lies, but immediately he was challenged by many of us.
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I convened a hearing 2 days later right here in this room. We had several people who were on the square that day, including journalists and activists, including one who is in the room right here today, and Time Magazine correspondents, and we asked Choha Tien or anybody from the Chinese Embassy to come and give an accounting for such a big lie. Nobody showed up from the Chinese Embassy. Choha Tien did not show up.
But it underscored to me that at home they are used to getting away with it; abroad, they need to be challenged because, obviously, many of us who followed those occurrences knew that there was a different set of circumstances, and the truth was entirely different from what was represented.
You go to google.cn, and you get pictures of people in Tiananmen Square smiling, wonderful pictures of the square, but you do not get pictures of what really happened that day.
Mr. Schrage said a moment ago there is a handful of politically sensitive requests. Well, they are, in many ways, all important. It has to do with the Falun Gong, China human rights issues, the use of torture, which I said to the previous panel, under Manfred Nowak, and he is just the most recent person to report on it, the UN Special Rapporteur on Torture, and he says it is widespread.
I would recommend to my friends who are at the witness table here to read the State Department's Annual Report on Human Rights Practices as well as the Religious Freedom Report and the Report on Trafficking. It paints a horrific picture of systematic human rights abuses in China, which the question is, are we enabling, or are we providing some kind of counter to it so that the flower of a generation, those students and young men and women who aspire to nothing more than human rights, are not put into prison but, instead, are lifted up and hopefully get an airing of their concerns.
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So let me just go to some questions, and if you gentlemen would not mind responding to those questions, and time being what it is, I will lay out my first major question and then the second and then yield to you and then go to my good friend, Mr. Payne.
Harry Wu, who is the great survivor of the Laogai, spent 19 years in the Laogai and, again, in the 1990s, was able to assemble six survivors of the Laogai right where you sit. Paul D'Angiotso and I chaired that hearing. Paul D'Angiotso was a Buddhist monk who could not even get through the security downstairs because he brought the implements of torture that are routinely employed against both women and men: Cattle prods applied to the genitals, under the arms, and in various other sensitive places. He brought those and said, ''This is what is used day in and day out against people in the Laogai.'' Remember, there are at least 6 million, some say many more than that, in the Laogai today, including political and religious dissidents, including Shi Tao.
Harry Wu will testify later on today, and I quote him:
''A friend of mine recently tried to access some 'politically sensitive Web sites' while at an Internet cafe in a remote, small city in Xinjiang Province. The police quickly showed up to arrest him. I do not know who supplied the technology enabling the police to track my friend's Internet surfing, but I am pretty sure that U.S. technology was involved.''
He goes on to point out that Golden Shield, which monitors Chinese civilians, had assistance from Intel, Yahoo!, Nortel, Cisco Systems, Motorola, and Sun Microsystems, and he says, ''The Golden Shield project would not have been possible without the technology and equipment from these companies.''
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So my questions are, exactly how does the secret police track Internet users, e-mail searchers' sites, and does your technology of your respective companies and presence in China in any way enable or assist the Chinese police in this endeavor?
Secondly, and this might be more to Yahoo!, but the others might want to provide an answer as well, how does the secret police monitor Yahoo! e-mails? Do they have access to your files, your cyber files and to private information? How many times do they—''they'' being the police—request information that is in your files? Is it routine? Is it every day? Do they have some automated way of just doing it without even making a request? Do you ever say no? Are there circumstances around which you would say, ''No,'' and say, ''We are not going to provide the information. This is a political prisoner or a political personage. We think that the nature of this request crosses a line. We do not just say yes to everything.''?
Are any of the names among the known cyber dissidents and journalists? Reporters Without Borders suggests that 39 cyber dissidents, and I forget the number of journalists, but large numbers, but as I said, and I will say it for the third time, many of us believe that is the tip of the iceberg. Have you ever tried to cross-reference any of those who are now in the Laogai or in a jail somewhere else with those requests that were made to any of your respective companies?
With regard to Google and Internet filtering, who decides and how often and where what is now going to be blocked. What bureau within the People's Republic of China does the blocking? For instance, Tiananmen. Who were the ones who said, Tiananmen, that is a no-no? You cannot have that. And how many words are we talking about, and can that be expanded from day to day? For example, if the police raid a small village, as they have done recently, and kill people, all of a sudden the People's Daily does not over that, and that is to whom many of your Internet users in China will be sent or China.com. Who makes those decisions? Is it you? Is it the people in China, the government?
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Why do you send Internet users, and I ask this very respectfully, why do you send them to government propaganda sites, when I or anybody in this room go to google.cn, go to the disinformation site? Many of us are concerned about torture. Manfred Nowak—again, I will use his name—UN Special Rapporteur on Torture. A scathing report on China just came out in December. If you put his name in google.cn, you go to a People's Daily report about he wants to go to Guantanamo, and I think and many others in this room certainly think he ought to be able to go to Guantanamo. I have gone there. Many Members of Congress and many journalists have gone there. He ought to be allowed to go there.
But the big question is, why is it that you get sent to that site, which completes the loop? And with so many young people using the Internet, they are now getting the party line, and that party line usually puts the United States in a very, very bad light.
Finally, are you gentlemen aware of just how widespread torture really is in China? If you or I were arrested, what I am saying right now would fetch me a 15-year term in the Laogai, no questions asked, maybe longer, as well as what others, especially on our third panel, the human rights activists. If Harry Wu goes back after speaking today, he will be nabbed and sent right to the Laogai and will be tortured. That is the day-to-day practice.
I deeply respect that your companies do so much good and provide freedom of information in so many ways. I have a Yahoo! e-mail account, also an MSN e-mail account, as does my wife, but in a repressive country we are talking about a situation where it becomes a tool of that repressive regime. As I said at the outset, and I think it bears repeating, propaganda and secret police are the two main pillars of any dictatorship anywhere in the world, and that includes the PRC.
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So if you could go down the line and answer some of those questions.
Mr. CALLAHAN. Congressman, first off, Mr. Chairman, I will answer the questions with respect to Shi Tao, in particular. You directed those at me.
Let me please state in no uncertain terms, as I did in my testimony, that our company condemns the persecution of any person for exercising their right of free expression, whether in China or anywhere else in the world. You asked about how this information is disclosed. Against the backdrop of the fact that I no longer have supervision over the day-to-day operations in Beijing following our transaction in October, but when we did have control over the day-to-day operations, we made sure that our Beijing operation would only comply with a lawful demand from an authorized agency. The demand had to be in writing, the demand had to have a seal of the agency, and the demand had to come from someone we had made sure was an authorized representative.
There was no ongoing access to the Yahoo! files by Chinese law enforcement. These were requests, demands that we had to comply with, and no one is more troubled by this, Mr. Chairman, than when we realized this came out in the news that we had supplied information pursuant to a lawful demand that had been used for this purpose.
When we established operations in Beijing, we made sure that we had this process in place. I can assure you that was unpopular with the Chinese Government, with the law enforcement authorities we dealt with. It was not the practice of the other companies, local companies, in the market at that time. We did take some heat for that. I would not be remiss to say that.
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Furthermore, we have no knowledge of the identity or the purpose of the investigation when they came to demand this information about Mr. Shi Tao, in particular. In addition, we followed the rigorous procedural process that we had in place, and as a backdrop, I do not think it would be appropriate for me to sit in my office in California and order a Chinese citizen in our Beijing operations not to follow a lawful demand, recognizing the very distressing consequences that that caused, that could subject that person to persecution and criminal prosecution. And for that reason, Mr. Chairman, we wanted to take this issue, address it head on.
By no means do we come here today and say that these are good consequences. These are horrible and distressing, but by the same token, it exemplifies for us why Yahoo! cannot take this issue on by itself, Mr. Chairman. We ask for the government's help. We are encouraged by the State Department's announcement, and we are here and ready to engage with our industry peers on this topic.
Mr. SMITH OF NEW JERSEY. Before moving on, just very briefly, it is my understanding that Google has made a different determination because they have not sited their e-mail servers inside of the repressive country, in this case, China, so that access to what you term a legitimate request from law enforcement. Part of the problem we have is that law enforcement is enforcing unjust rules and regulations and laws, and there is a difference. To enforce apartheid 20 years ago or more on South Africa was profoundly unjust, and yet it was a rule of law. So if it is an unjust law, somehow we would suggest, and one of the things our bill would do would be to put e-mail servers out of harm's reach to the greatest extent possible.
In terms of Alibaba, you mentioned in your testimony, and then I will move down the line, not to belabor it, that you talked to them. What is their response? You did not say what that was. In a way, does that give you some plausible deniability because you are still a shareholder in Alibaba? Again, I mentioned IBM and the Holocaust. One of their plausible denials was that they had IBM Germany that was doing much of the heavy lifting when it came to creating a data base which included Jews that regrettably were marched off with incredible precision, and the trains did run on time to the gas chambers.
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Mr. CALLAHAN. Mr. Chairman, as I mentioned in my testimony, I met with senior executives at Alibaba, as did other senior executives at Yahoo!, to express our concern about these issues and to encourage them to follow the very rigorous procedural protections that we had in place when we controlled the operation. I cannot speak for them. I hope that they will follow that. I think they recognize how important it is to Yahoo! as a major shareholder, and I believe that has some influence on that.
As to the second part of your question, Mr. Chairman, about the transaction itself, plausible deniability is not a factor for Yahoo!. I come to this Committee today to recognize the distressing consequences of having to comply with this law enforcement demand. We recognize that we need to do our part as part of the industry in working with government to address the situation. That is how we come to you.
Mr. SMITH OF NEW JERSEY. Would it be correct to assume you do not know how many times the police make requests and how often those requests have been honored and whether or not any of that marries up with people who we know to be imprisoned as a result of e-mails that were captured by the secret police?
Mr. CALLAHAN. That is correct. Because we do not receive the identity or the reason for the investigation, as well as the fact that the records are not in our control, it is not information——
Mr. SMITH OF NEW JERSEY. Do you keep a record at least of how many investigations there have been?
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Mr. CALLAHAN. The records are kept at the local subsidiary, so it is——
Mr. SMITH OF NEW JERSEY. Could we get that for the Committee?
Mr. CALLAHAN. It is my understanding, sir, that those records are prohibited from being disclosed under Chinese law because they are demands from Chinese law enforcement.
Mr. SMITH OF NEW JERSEY. So we will not even know the scope and the magnitude of how many requests have been made and how many times pertinent information has been tendered to the Chinese secret police. Is that, in and of itself, not enough to move out and disengage?
Mr. CALLAHAN. Congressman, we believe firmly that the benefits that the Web brings are very, very important, and we believe that having a presence in countries, and it is not just about China, and it is part of the reason we set out principles and commitments that we wished to make, that engagement is the better course. We recognize these very serious consequences, but we are also here to recognize that we share responsibility to engage with government on this issue.
Mr. SMITH OF NEW JERSEY. Finally, do you know how the Chinese Government knows which e-mails to make requests on?
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Mr. CALLAHAN. I do not have that information.
Mr. SMITH OF NEW JERSEY. Could you provide that for the record?
Mr. CALLAHAN. It is not information that we would have. We received a lawful request for a certain user ID.
Mr. SMITH OF NEW JERSEY. But how are they monitoring? That is my question.
Mr. CALLAHAN. I do not know the answer to that question.
Mr. SMITH OF NEW JERSEY. If anybody else knows, I do hope you will provide that for us. Thank you.
Mr. KRUMHOLTZ. Mr. Chairman, let me, in response to your question, perhaps take you through how we respond to requests from Chinese authorities.
When we receive a take-down directive in China, we generally only have 24 hours, sometimes less, to respond. We review these requests at our Chinese operations center and also at Microsoft headquarters to assure that the appropriate authorities are involved and that we have no basis to challenge that conclusion.
I should note that most blog take-downs are actually things that we do when there has been a violation of our terms of use, when a blogger has content that raises questions of racism or bigotry or pornography. So the overwhelming majority of our take-downs involve a violation of our own terms of use.
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Customers' personal information is stored on servers located in the United States, so requests for that information from the Chinese have to be handled under procedures that are provided under the U.S.-China Mutual Legal Assistance Treaty. Since we are the U.S. Government, the U.S. Department of Justice engages, and we would follow their orders if they determined that we should provide that information.
Finally, in a very limited number of cases, and this is not just in China but wherever we do business, and we do business in over 90 countries, we do cooperate with local law enforcement agencies when an individual's personal safety is at risk. So, over the past 2 years in China, I believe there have been about a half a dozen cases—there has been a case of murder, a missing American student, or pornography or other serious crimes, crimes of a serious nature, where we will cooperate with the local law enforcement agents.
Mr. SMITH OF NEW JERSEY. Does Microsoft provide any capability to monitor e-mails or any other information that is flowing through the 'Net in China?
Mr. KRUMHOLTZ. We do not.
Mr. SMITH OF NEW JERSEY. Thank you. Mr. Schrage?
Mr. SCHRAGE. So, candidly, we are new to the market, being on the inside, and we have developed our program in a very calibrated way to be consistent with the values and the missions I described earlier on. As a practical matter, we have agreed to enter the market to perform search services, but we made a fundamental, strategic decision that we were not going to offer services like G-mail or Blogger, services that provide us commercial value, benefits in other arguments, that we would not provide those services inside of China because we did not want to be put in a position where we would have possess of data that might create the kinds of problems we are discussing today. I want to be categorical in that.
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That deals with the first set of issues that you have asked about, privacy and confidentiality of information. We are not going to have it, so we are not going to be in a position to give it.
The second set of issues you asked had to do with censorship, and, again, as I mentioned earlier, it is an issue that we have great concern.
I do want to make some reference to your point earlier on about google.com and google.cn. I am actually very proud of what you just showed because, in contrast to every other search engine in the marketplace, we make it very clear and very easy for anyone anywhere in the world to see what is and is not available in China. It is not something we are happy about. I want people to know the kinds of problems that we are forced to deal with in China so that you, and perhaps with my colleagues here in industry, we can seek to make the same information available in both services.
With respect to who decides and what is on the list, it is actually a somewhat straightforward process. What we do is we base our service inside of China, and we begin to search. We try to find the information that is already available to users that passed through the firewall. Internally, there is no firewall—it is already restricted—and externally.
As a practical matter, from that we derive a list of sites, of URLs, that are just blocked by the Chinese firewall, and what we have done is we have essentially, and I am somewhat oversimplifying, we have essentially made available inside of China those things that we have found that are either already available or were not blocked but were otherwise unavailable. Other search engines did not capture that information, either inside of China or outside.
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The last point you make, frankly, is, candidly, the most troubling one, and one I do not have a great answer for you. You made an excellent point, Mr. Chairman, earlier on: Is a half truth better than no truth? Is it better to have half the results that are misleading than to have no results at all? That is a very appropriate question to ask and one that I do not have an answer for you today. I think that is precisely the kind of question that would be an appropriate subject for an industry group to discuss, precisely an appropriate question for the State Department task force to discuss, and we would be delighted to be a part of that conversation.
Mr. CHANDLER. Mr. Chairman, your question, as I understood it, was related to the technical means by which filtering is undertaken with respect to Cisco products. Customers around the world use embedded filtering that is part of network managing software to manage their networks, as I alluded to. I understand, for instance, in the House of Representatives that if you or staff seek to reach sites that include spyware that would be loaded onto your computer, it is automatically blocked. That is a good thing, and I think we all understand why that happens.
The programming of it, which is undertaken by users, at least as it relates to our products, is so-called ''URL filtering'' where particular Internet addresses, if they are known, IP addresses or URLs, universal resource locators, can be programmed in so that those sites cannot be reached by the user trying to reach those sites. That is the principal mechanism available worldwide as part of network management software not just from Cisco but from really every vendor, Chinese, European, American, because it is so fundamental to Internet security.
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Mr. SMITH OF NEW JERSEY. If I could ask you, in terms of tracking people as they move along the 'Net, is there any capability that you have provided that allows the Chinese dictatorship, the secret police, to say, so-and-so just asked about the Falun Gong? Now we know what their IP address is, who they are, and the next thing you know, somebody shows up at the door.
Mr. CHANDLER. I think the questions that get asked to some of the service providers are illustrative of the fact that the information is not readily available from the network. There are products which I am told we do not supply to service providers in China which are available for so-called ''content searching.'' There are a number of them from a number of different companies. Enterprises use them to manage their internal networks. We do not provide it to service providers, but that will allow for content searching within particular documents that are passing through a network.
Mr. SMITH OF NEW JERSEY. Let me just ask in terms of Police Net, what kind of capabilities does that give to the public security police, which we know brutalize people, especially religious believers, especially groups like the Falun Gong? Hundreds of Falun Gong have been tortured to death, not only to crippling and people who walk around with post-traumatic stress disorder, but to death. They have done it with many, many others as well of different religious faiths. Sitting where you are sitting, besides people like Harry Wu, we have had Wei Jingsheng and others testify before who talk about the brutality that happens every day.
I went on Google and downloaded where I was sent when I put in ''human rights'' and came to this judicial reform and interest of human rights, and it has smiling policemen on page after page almost holding town meetings, which is a Potemkin Village in and of itself about what these police are really all about. Officer Friendly; it just does not comport with reality.
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My question is with regard to the tracking, if any of you could get into that further, if you would, of these individuals and Police Net, in particular. We are told, and please correct me if I am wrong, this has linked all of the public security police in a way that they had not heretofore, which gives them, again, an efficacy and an ability to track real criminals but also the other edge of the sword, human rights activists so that they silence dissent.
Mr. CHANDLER. The phrase ''Police Net'' is not a Cisco expression. I can explain what types of products we sell to law enforcement around the world and how those might have application. We sell data networking products. We are a networking company, and we try to illustrate for our customers ways that data networking can be used to improve operations.
With respect to law enforcement and first responders, generally our focus has been on providing products that allow data networking to permit greater access to information resources. So, for instance, a product will allow an ambulance driver to be able to see medical records of a patient, will allow police to be able to access resources that are in law enforcement data bases officially, and our products bring together voice-video so, for instance, if there is a closed-circuit television system or a Web equivalent of that, those images can be seen by a mobile law enforcement agent. But it is data networking. We are not a company that provides the data itself or builds data bases, but we provide a networking solution worldwide that allows for data bases to be brought together, both in a fixed and mobile setting.
Mr. SMITH OF NEW JERSEY. Tell me if you think this is accurate. In defensetech.org, they have a statement that says: ''Police Net connects officials of the Public Security Bureau, a national agency with local branches that handles security, immigration, social order, and law enforcement . . .''—''social order'' is obviously one of those elastic terms—''. . . to keep a wealth of information on every citizen in China. Cisco marketed Police Net at China's 2002 Information Infrastructure Expo,'' and then it goes on from there.
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So don't they now have that and are utilizing it?
Mr. CHANDLER. Police Net may be a designation they use inside China for what they are doing. What we sell is a data networking solution that is sold worldwide to law enforcement that includes sales in China, but it is a data networking solution. The data have to exist in order to be networked and brought together and made accessible.
I will say that the Congress, after the Tiananmen Square incident, passed the Foreign Relations Authorization Act that established very, very specific criteria for selling equipment that was considered crime control equipment in China, and there is a list of products associated with that. None of the elements that we sell in China to law enforcement agencies is considered part of the crime control equipment that was controlled under that act.
Mr. SMITH OF NEW JERSEY. But as you know, the Internet was nowhere near where it is today back then, and the capabilities for law enforcement, in this case, an unlawful law enforcement agency, to crack down on dissidents did not exist. So one of the things we are looking at in our legislation is to expand that list.
Let me ask one other question, and then I will yield to my colleagues, and I appreciate their patience. They will have ample time to ask questions as well.
Both in Google's testimony on page 4, Microsoft's on page 5, and Yahoo!'s made mention of it as well, pointed to the Academy of Social Sciences of China. Google, your testimony: ''A recent, well-respected study by researchers at the Chinese Academy of Sciences found that 54 percent of users believe the Internet provides more opportunity to criticize the government.'' Microsoft: ''One recent independent survey of Chinese Internet users, 60 percent of users believe the Internet will provide more opportunities to criticize the government.''
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Frankly, in going online and looking at greater depth myself at the Chinese Academy of Social Sciences, it turns out that the head of it is a member of the Central Committee. He is a Communist in good standing, if you will, and they also, in their mission statement, talk about how dedicated they are to Marxist-Leninist ideology and the teachings of Mao Tse Tung, and my real question is, do you really believe that a study can be had in China where people are fearful when asked questions like this?
This is not a Gallup poll. How was that study done? You are quoting it with great respect and admiration. Who did they really poll in those five cities that they claim to have polled? We know that answer the wrong way or criticize the government, and you end up in the gulag. So why would they think that at a time when the '' 'Net is drawing ever closer,'' and this dragnet is capturing more and more people, that the Internet is going to provide this enhanced ability to do that?
Mr. Krumholtz, in your testimony, you rightfully point out that these all-encompassing, catch-all phrases are used in China. You said ''disturbing the solidarity of people.'' What does that mean? ''Harming the interests of the nation.'' These are the same kinds of catch-all phrases like ''slander against the Soviet state'' that were employed with impunity by the Soviet Union during their crackdowns on dissidents. So if you could answer that. We have got to be careful who we quote. Do you really have confidence in the validity of that survey?
Mr. KRUMHOLTZ. Mr. Chairman, it is my understanding that this study was founded by the Mark Foundation. It is the fourth year in a row that it has funded a study of this kind. I have a great deal of respect for the work of the Mark Foundation.
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That said, the study aside, I think I can point to just our own experience with MSN Spaces. Again, we launched that service in May, and in under 9 months we have over 3.5 million users creating their own individual Web sites, or blogs, and over 15 million unique visitors. The fact of the matter is, at least in our view, that there is more opportunity for communication and freedom of expression in China today as a result of our service and other services, and we expect the trend just to continue.
Mr. CALLAHAN. Mr. Chairman, I believe my testimony cited that study for a proposition that even the Chinese Government agency had cited that they cannot control the Internet, and that was what we found to be a profound statement by their own research agency.
Mr. SMITH OF NEW JERSEY. Mr. Payne.
Mr. PAYNE. Thank you very much. Therefore, you conclude that even though there is increased jailing of journalists and cyber dissidents, that you think that the number of dissidents and their activity will greatly exceed the government's ability to catch them all and throw them in jail. Is that what you all conclude? We could start on my right and go down.
Mr. CALLAHAN. Our belief, Mr. Congressman, is that the benefits of having access to communication service, as well as access to independent sources of information, coupled with the extreme large number of searches and other activity that happens on the Web, provides an extraordinary benefit.
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We recognize these extreme challenges as well, and we are ready to tackle those, along with our industry peers and with government, in partnership to make this a government-to-government dialogue.
Mr. KRUMHOLTZ. I would just reiterate that we think these are very difficult issues, which I think is clear from some of the questions from the Members, but we, too, think, on balance, that it is better for Microsoft and the other companies here at the table and other United States Internet companies to be engaged in China. We think that the benefits far outweigh the downside in terms of promoting freedom of expression.
Mr. SCHRAGE. We made the decision to enter the market because we believe in making information available and accessible. We believe that doing that will achieve positive things. As I said in my testimony and in my oral statement, if, over time, we do not achieve the results that we seek, because your question is a legitimate one, we will reconsider our role there.
Mr. CHANDLER. The Internet is many different things to different people. For some, it is a source of empowerment, enlightenment, giving them access to information they never had before. Others are frightened by that empowerment and see nonstate actors, whether they are multinational corporations or terrorists or antiglobalization activists, empowered against legitimate state authority, and others see the Internet being used as a tool of repression. I think all of those are correct.
Chairman Greenspan referred to the economic, social, and political changes that the Internet has been bringing about as a once or twice a century kind of event, and in making U.S. policy about how best to address all of those different things that the Internet is, a critical element to consider is the effect of those policies on the existence of one global Internet.
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We think any regulation that would impair the existence of a global Internet, from an infrastructure standpoint, which is what we provide, and lead to local companies being sole suppliers in their markets for specialized sub-Internets, would basically undermine additional free access to the Internet by empowering governments more to come up with their own standards and their own controls and make it harder for the efforts that are out there to evade censorship to succeed. That is the concern I would bring to bear in your consideration of alternative policies.
Mr. PAYNE. Let me ask you, Mr. Chandler, since you were speaking, about Cisco Systems. Although Cisco Systems denied that it has tailored its products to suit the PRC Government's censorship, does your technology in China, in fact, significantly boost PRC's censorship capacities? The reason I raised that question is by building a research and development facility in Shanghai, will Cisco Systems more directly serve the Government of China on the censorship objectives, and if not, why not?
Mr. CHANDLER. The research and development facility in Shanghai will employ about 100 people built up over a 5-year period primarily focused on home networking products and voice-related applications, voice-over-Internet protocol. They are not related to Chinese-specific products for censorship purposes in any way.
From the standpoint of our products and the filtering capability that is embedded in our products, through the customary filtering that network management software allows, we do not see a differentiation between our products in that respect and those of our competitors that is meaningful. Chinese competitors, European, numerous other American companies that have been cited by some of the other people who will speak on the panel following us all provide products that perform very similarly in that respect.
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Mr. PAYNE. I am going to yield because our other Chair has to leave, but I just my ask that you do not feel you are more susceptible by being there to have maybe government creep move in, not intentional, but if you are right there, you have got 100 now that decide they want to expand, maybe go to 200. It is set up to be more cozy with the government. I do not see how you can prevent it. Let us put it that way.
Mr. CHANDLER. I understand the concern.
Mr. PAYNE. Mr. Leach, I will yield.
Mr. LEACH. I am not in that great a hurry. Please.
Mr. PAYNE. Okay. I will try to be short. I wonder if Yahoo!, if you had refused to provide the PRC authorities with the personnel information and identification information of Shi Tao, the Chinese journalist we have been talking about that we know is in prison, do you think there would have been ramifications to Yahoo!, and what might they be? And, secondly, would you think that Shi Tao would have been arrested without the specific information that you provided to the government?
Mr. CALLAHAN. Congressman, as to your first question, with respect to—I am sorry. What was the first part of your question?
Mr. PAYNE. That if you had refused to give the information.
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Mr. CALLAHAN. I am sorry. It is our understanding that to refuse to comply would have subjected local employees in the local operation to potential criminal prosecution and criminal penalties, including imprisonment.
As to the second question, as to would the prosecution would have happened without the information, I would not be able to speculate as to that.
Mr. PAYNE. Okay. Let me just sort of conclude this general question. Since Yahoo! and Microsoft and Google and Cisco are so important, without you four there, China would be light years behind. We know that perhaps there are laws about restraint of trade or companies coming together because it may be antitrust, but, you know, knowing what the down side is, it would appear that there could have been some creative way that if all four of you said, we are going to withhold this one, or we are not going to roll over on that one, you see, when one goes and opens up, it is just like I work with the Caribbean countries, and this cruise ship business is a big deal. So, you know, Bermuda might say, well, you can dump your garbage here for five dollars a ton, and the others will say, well, I will do it for three, and so they will go to the lowest bidder. You will find that if they all said it is $10 because it is a lot of garbage, and we are going to get what it ought to be, or for every person that comes off the ship we are going to charge you $20. One will say, well, we will do it for 10.
If all of you said, maybe this piece of information, they cannot do it without it, and somehow came with an agreement that, you know, we will all hold hands together and jump off the cliff together. It seems to me that there could have been some way that it could have either slowed down, or our U.S. Government could wake up and try to come to the defense. In other words, it just seems that you have taken the easy way out. A billion, four people. Let us rush over there. Of course, we have got a billion, four in India, too, so I do not know what you are doing there. That is a lot of hits, you know.
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None of you are really doing badly, from what I understand. It seems like you all are in kind of good shape; sort of moving forward is the stuff of the future. Has there ever been any kind of an industry discussion? I mean, even cars put air bags in them. People try to protect people, maybe try to have hybrid cars to cut down on fossil fuels, a terrible name for a car, but they are working at trying to be of assistance.
It seems here it is just that we have got to go along to get along. We will just roll over with the government, and that is that. I just do not see the industrial integrity that we should try to find in such outstanding corporations. All of you are competent people, all top folk. Each of your companies have high-level, very professional, competent people. Why just roll over and let the torturers torture? You do not do cattle prods, so you cannot be held responsible because they use them. I mean, what is it?
Mr. KRUMHOLTZ. Congressman, if I may, the companies in our industry have initiated a dialogue to talk about whether or not there are some guiding principles that we can operate under in countries like China. That said, I think we need to take care not to overestimate even a group of companies' leverage with a foreign government, a foreign sovereign. That is why I think all of the companies applauded yesterday's announcement of the Global Internet Task Force by the Secretary of State because we really do think that, working together, the industry, government, and the NGO community could make some real progress here.
Mr. SCHRAGE. Congressman, we are fierce competitors with these guys. We do not usually go bowling together, and so, first, that is a real hurdle that we have to overcome.
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Second, as powerful and as important as you think are three companies are, or as we think our three companies are, in China we are not the dominant player in that market. There is another company that is not here today that has a majority of the market share, at least in the search business, so that, frankly, I think that that competitor, that local competitor, would like nothing more than their three American counterparts to go to the Chinese Government and say, we will not cooperate with these restrictions, because that competitor will go to the Chinese Government, I believe, and say, that is great because we will.
That is why we need your help in helping us work together but also supplementing what we are doing.
Mr. PAYNE. Thank you, Mr. Chairman.
Mr. SMITH OF NEW JERSEY. Chairman Leach?
Mr. LEACH. Thank you, Mr. Chairman.
One of the distinctions that has been drawn here is between Mr. Krumholtz and Mr. Callahan, and you have suggested, Mr. Callahan, that you have to comply with requests because your people in China will be arrested. As I understand it, Mr. Krumholtz's companies organized to have their people here in this area. Is that correct?
Mr. KRUMHOLTZ. No. We have employees in China, and our employees there face the same risk of not complying with a legally binding order as Mr. Callahan's would. The point I was making earlier is that our servers are located here in the United States, which adds an additional layer of process and protections through an international treaty between the United States and China on their ability to reach the content of e-mail traffic.
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Mr. LEACH. And my understanding is Google has no storage in China. Is that correct?
Mr. SCHRAGE. We do not maintain any personally identifiable information in China.
Mr. LEACH. This is a profound distinction, as I understand it, because to go through our Government, you have to get the approval of our Government—is that correct?—for sharing information, which raises the Catch 22 for you at Yahoo!: Why did you put your servers in China?
Mr. CALLAHAN. To clarify, we no longer do have operational control over Yahoo! China. It is controlled by the company that we did a partnership with in October of last year. At the time when we did put our servers in China, we were the first western Internet company to be licensed to move into China in 1999. We made a decision at the time that the service that was available without having servers there, given the infrastructure of the Web at the time, going on 7 years ago, made the service not something that was robust and even took a while to maintain. So we made the decision to put the servers on the ground, and as you said, that is a distinction from the others that we just talked about.
Mr. LEACH. The irony of this distinction is that it puts you quite vulnerable to responding to requests that the other two companies do not to the same degree. Is that valid?
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Mr. CALLAHAN. Yes. As to lawful requests for e-mail, as we discussed, that is correct.
Mr. LEACH. That raises a question of whether you want to continue that policy.
The second question, and it is a very interesting one, ''lawful request'' deserving of definition, and lawful requests in a Chinese context, should they be consistent with the Chinese Constitution, and do you ever question that? When the Chinese Constitution asserts freedom of expression, and an allegedly lawful request to repress freedom of expression, what is lawful? Do you have lawyers, and do you think this through? You are an attorney.
Mr. CALLAHAN. Yes, sir. As to your first question, we no longer operate the business there, so having servers there or not having servers there is not a decision that we would be in a position to make.
Mr. LEACH. So your prior suggestion that you had to do it because your employees would go to jail; you have no employees there. Which is the correct answer, that you have no employees, or you do have employees?
Mr. CALLAHAN. We do not have employees there. I was referring to the disclosure of information in the Shi Tao case which occurred when we did have employees there, so that was the distinction.
As to your question regarding the disclosure of information in other cases, I think, is what you were referring to, when we were operating there, we maintained very rigorous procedures to do that. We do have Chinese lawyers on the ground to make sure that these are lawful orders, that we are required to comply. There were situations when we did not comply, when we did not think it was a lawful order and not something we had to.
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So I am confident that with those procedures in place that we tried to address that, recognizing your distinction between what is lawful in our context and in the Chinese context, that we did have to comply with the order.
Mr. LEACH. Well, I understand the corporate dilemma that is being expressed by the gentleman from Google. That is an understandable situation, but there is some use of words I want to understand here. You indicated that self-censorship was required, as I understand it, but it is my understanding that it was voluntarily undertaken, and you did not have negotiations with the Chinese Government. Is that valid or invalid?
Mr. SCHRAGE. Congressman, it is a condition of the license to do business in the country that you comply with the law, and it is a condition of complying with the law that you restrict the content available. So I do not believe we had much of a negotiation about that.
Mr. LEACH. So it is not true that you did this in anticipation of the Chinese Government objection. You had the government objection prior.
Mr. SCHRAGE. They would not give us the license if we did not agree to it. It is complying with the law. A condition was will you comply with the law, and we said yes.
Mr. LEACH. Did you affirm that the law existed and that the law was Constitutional?
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Mr. SCHRAGE. I honestly do not know the processes we went through. I think it was made very clear to us that unless we would comply with the law as they interpreted it, we would not get the license.
Mr. LEACH. What I am getting at here is one of the traumatic aspects that the Chinese people are confronting today is that the Constitution provides certain very broad and thoughtful provisions on freedom. Many laws assert the same thing. And then there is this distinction between the Constitution and law but also the Constitution and law together, which are credible, but government officials are operating outside the Constitution and sometimes outside the law, yet they are official agencies of the government.
So the Chinese people are confronted every day with this perplexing circumstance, and one of the interesting questions is, does American corporate activity end up, through its policies, affirming outside of Constitution and, to some degree, outside of law actions, even though they are suggested by a formally structured government at some level or another? As a corporate actor, I think all of you are more or less general counsels. Do you think these issues true, and how do you assert the best interest of your company, and then is that best interest of your company the same as the values of the country from which you have your charters from? This is a dilemma.
I cannot tell you that it is an easy dilemma to answer. You have been very direct in asserting that you want to do business, and you are uncomfortable, but you want to do business, and that is an understandable circumstance, too. Whether it is a compelling one, individuals will have different judgments.
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Mr. SCHRAGE. I would say two things. First, I would have to say, first and foremost, I am not the general counsel, so the general counsel would be very upset if I started giving legal opinions.
Secondly, though, you raise a very good point, and I would have to check it, and I would be happy to ask my colleagues to get back to you on the specific questions about what kind of legal analysis we performed. I would say, though, that there is some other empirical evidence, and that is there are lots of other companies that are doing search inside of China that have these same kinds of restrictions and self-censor or censor, and there are lots of Internet service providers, ISPs, as opposed to search providers, which perform filtering or censorship as well.
The only thing I would say is I do not think it would be correct to characterize this as sort of renegade bureaucrats in our situation. I think it is a government policy of complying with the law and interpreting the law in the manner that we have followed, but I would be happy to check it and get back to you on it.
Mr. LEACH. You have referenced that you are obligated to do all of these things because of a license. Did you have very specific terms in this license? I mean, did they cite exactly what it is you were to block in this license that you have, and then if it did not, how do you know what to block, if it is not that you are anticipating government actions? I mean, how do you know?
Mr. SCHRAGE. My understanding is, and, again, I do not have the license in front of me, but I did have a conversation with my colleagues about this very issue, the license makes reference to the laws that need to be respected or complied with, and that is the basis.
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Mr. LEACH. So you interpret these laws on specific things.
Mr. SCHRAGE. Based on the practices.
Mr. LEACH. Did you check with Yahoo!? How do you know what the practices are? Did you check with your competitors? They have to do this, so we are going to do this?
Mr. SCHRAGE. What we did was we set up a computer in China and started performing searches, and as the Chairman demonstrated rather powerfully, we learned from using other services and comparing the results of other services to our own——
Mr. LEACH. So you just put down what others did, for example, your Chinese competitor, and decided to do the same thing without being asked. That makes you a functionary of the Chinese Government. You have asked yourself the questions of what if I am a censor, what would I want to censor? You go to the practices of others, and then you follow them. Is that a valid description? This is an amazing description, I want to tell you. This is using your technology to learn how to censor.
Mr. BLUMENAUER. Will my friend yield for 10 seconds?
Mr. LEACH. Of course.
Mr. BLUMENAUER. What I heard earlier was that the Chinese system was built on what was available in China.
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Mr. SCHRAGE. What was searchable.
Mr. BLUMENAUER. You operated in China based on what was available. That is what I heard you say in your original——
Mr. SCHRAGE. Let me be absolutely precise, and my colleague has explained that my earlier answer was not complete. What I said was correct in that we went into China and started performing searches to find information, both inside China and outside China, but the starting point was within China.
We did not only look at what our competitors did. We also sought to perform searches on our own search engine, google.com, from outside the restrictions imposed by the Chinese Government. So we would do many searches, many of the searches involving issues that are not controversial, not, as we are calling them, politically sensitive. They would yield all sorts of results. Many of the searches were the searches that are on categories that we are calling politically sensitive, when we performed those searches inside China seeking to go outside China, we were unable to get results outside China, but we were able to get some results, as in the example that the Chairman gave earlier, from within China.
So that result was not obtained by looking at the performance of our competitors but was looking at the performance of the filtering of government authorities.
Mr. LEACH. Well, this is very interesting. In all industries, we have all heard this term ''best practices.'' I think you just have affirmed a novelty in American commerce, worst practices you have studied and adopted. That is an astonishing circumstance.
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So if this Congress wanted to learn how to censor, we would go to you, the company that should symbolize the greatest freedom of information in the history of man. This is a profound story that is being told.
Mr. SCHRAGE. Congressman, I would make a couple of points.
Mr. LEACH. Of course.
Mr. SCHRAGE. First, I hope, as was clear from my testimony, both the written testimony that I submitted and the oral testimony that I gave, that this was not something that we did enthusiastically or not something that we are proud of at all.
Secondly, I think we are taking steps that others have not taken to, at the very least, make people inside of China and those outside of China aware of the detail and extent of the filtering that we are required to impose outside of China, through the kind of example that the Chairman documented, and inside China, by putting a statement at the bottom of every page of search results that are required to be filtered saying that we are not showing the full range of results because we are required not to as a result of government laws and restrictions. But you are absolutely right. It is what it is.
Mr. LEACH. Well, I appreciate this description. I appreciate the frankness of yourself and the panel. These are very difficult dilemmas that we face as a society and as people operating in commerce. How, as a country, we can respond is an interesting challenge. It raises big issues for all of us, and I thank you all very much.
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Mr. SMITH OF NEW JERSEY. Mr. Faleomavaega?
Mr. FALEOMAVAEGA. Mr. Chairman, if I could, I would like to defer my time to our distinguished Ranking Member. I have all of the time in the world to ask our friends.
Mr. LANTOS. I thank my friend. I was here for the early part of the hearing, and I watched you on television in my office. I have a few very simple questions.
Mr. Schrage, you just indicated you are not proud, and you are not enthusiastic. Can you say in English that you are ashamed of what you and your company and the other companies have done?
Mr. SCHRAGE. Congressman, I actually cannot.
Mr. LANTOS. Cannot.
Mr. SCHRAGE. I cannot say that. As I alluded to earlier, I do not think it is fair to say that we are ashamed of what we have done.
Mr. LANTOS. I am not asking for fairness; I am asking for your judgment. You have nothing to be ashamed of.
Mr. SCHRAGE. I am not ashamed of it, and I am not proud of it. We have taken a path. We have begun a path, as I said in my testimony and in my written submission, we have begun a path that we believe will ultimately benefit our users in China. If we determine, Congressman, as a result of changes in circumstances or as a result of the implementation of the google.cn program service, that we are not achieving those results, then we will assess our performance, our ability to achieve the goals, and decide whether or not to remain in that market.
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Mr. LANTOS. Let me ask your colleagues, beginning with you, sir, are you or is your company at all ashamed of what you have done in this whole business?
Mr. CHANDLER. We are not a service provider in China, and we do not have access to user information.
Mr. LANTOS. Just answer me directly. The totality of the things that you and the other three companies before us have done; are you proud of it, or are you ashamed of it?
Mr. CHANDLER. The products that we provide in China are identical to the products we provide worldwide with fundamental capabilities that are necessary to operate networks. I think you very articulately and profoundly alluded in your opening statement this morning to the issue of appropriate ways of engaging in China. Every President since President Nixon of both parties has made a decision for engagement.
What we have done is followed very closely the policies of our Government, which are informed by human rights concerns and have been for 30 years now, in terms of determining what products are appropriate and not appropriate to provide to China and to which users, in keeping with what our national goals are with respect to engagement.
Mr. LANTOS. Taking the totality of your activities in China, there is nothing that you or your company need to be ashamed of. Is that your testimony?
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Mr. CHANDLER. Our company provides Internet infrastructure——
Mr. LANTOS. I am asking a direct question. Is there anything that you have done in the whole period you operated in China that the company ought to be ashamed of?
Mr. CHANDLER. Our company provides access to information for people all over the world, including China, on a consistent global platform which maximizes the opportunity for freedom of expression, and we think that is a positive thing that we do throughout the world, including China.
Mr. LANTOS. So your answer is you have nothing to be ashamed of.
Mr. CHANDLER. My answer is I feel that our engagement is consistent with our Government's goals, and it is a positive engagement.
Mr. LANTOS. Let me move on to your colleagues. What is your answer, sir?
Mr. KRUMHOLTZ. We comply with legally binding orders, whether it is here in the United States or in China or in any of the other 90 countries where we do business.
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Mr. LANTOS. Well, IBM complied with legal orders when they cooperated with Nazi Germany. Those were legal orders under the Nazi German system. Since you were not alive at that time, in retrospect, having a degree of objectivity which some of you are incapable of summoning up with respect to your own case, do you think that IBM, during that period, had something to be ashamed of?
Mr. KRUMHOLTZ. Congressman, we think that, on balance, the benefit of providing the services that Microsoft provides——
Mr. LANTOS. My question relates to IBM and Nazi Germany.
Mr. KRUMHOLTZ. I cannot speak to that.
Mr. LANTOS. You have no view on that.
Mr. KRUMHOLTZ. I am not familiar in detail with IBM's activities in that period.
Mr. LANTOS. Did you hear our Chairman's opening remarks on that subject?
Mr. KRUMHOLTZ. Yes, I did.
Mr. LANTOS. Do you think those are accurate remarks?
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Mr. KRUMHOLTZ. I take the Chairman at his word, certainly.
Mr. LANTOS. I also take the Chairman at his word. Assuming that his words were accurate, is IBM to be ashamed of that action during that period?
Mr. KRUMHOLTZ. Congressman, I do not think it is my position to say whether or not IBM is to be ashamed of its action in that period.
Mr. LANTOS. How about you, sir?
Mr. CALLAHAN. As to Yahoo!, sir, we are very distressed by the consequences of having to comply with Chinese law. I spoke in my testimony that we condemn the persecution of any person for exercising their right to free expression. We are certainly troubled by that. We look forward to working with our peers and with the Subcommittee. The attention that is now on this issue, the initiative from the State Department, we think, is very encouraging, and we look forward to trying to push this issue forward as an industry collectively with government to try to make some progress.
Mr. LANTOS. Could I ask each of you, do you think that individuals or families have been negatively impacted by some of the activities which we have been told, like being in prison for 10 years? You are aware of those facts. I am talking to you, Mr. Chandler.
Mr. CHANDLER. I did not understand the question as it relates to individuals.
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Mr. LANTOS. There are some Chinese individuals, not random individuals, the most courageous individuals in Chinese society, who stood up for the values we believe in in this country. Some of these people are in prison now. You are aware of that.
Mr. CHANDLER. Yes. I understand that, Congressman.
Mr. LANTOS. All four of you are aware of that. Have any of the companies reached out to these families and asked whether you can be of any help to them?
Mr. CALLAHAN. Congressman, we have expressed our strong views on this subject to the Chinese Government.
Mr. LANTOS. No. Have you reached out to the family offering assistance?
Mr. CALLAHAN. We have expressed our condemnation of the persecution of this person. We have expressed our views to the Chinese Government, and we believe the best way to engage this is a government-to-government issue.
Mr. LANTOS. Have you reached out to the family?
Mr. CALLAHAN. We have approached the Chinese Government on this issue, and we look forward to working with the United States——
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Mr. LANTOS. Have you reached out to the family of the people who are currently in prison?
Mr. CALLAHAN. Congressman, we believe the best way to address this issue is to focus——
Mr. LANTOS. I can ask you 10 more times if you refuse to answer it. You are under oath. Have you reached out to the families?
Mr. CALLAHAN. We have not reached out to the families.
Mr. LANTOS. That was my question. Have you reached out to the families?
Mr. KRUMHOLTZ. Congressman, to my knowledge, none of the people involved in the, I believe, five cases where Microsoft has removed access to MSN Spaces in China, again, in response to a legally binding order, involved anyone being incarcerated. So I am not aware of any families for us to reach out to.
Mr. LANTOS. Have the families been adversely affected?
Mr. KRUMHOLTZ. Not to my knowledge.
Mr. LANTOS. Well, have you explored? Have you taken the trouble? You have done a lot of work to prepare for this hearing because you are under pressure now. You wish this hearing had never taken place. We all understand that.
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Have you reached out to the families that may have been adversely affected?
Mr. KRUMHOLTZ. With respect to the blogger whose content was taken down on December 30, who uses the pseudonym ''Michael Anti,'' we returned his content to him because that was his intellectual property.
Mr. LANTOS. Have you reached out to his family and asked if you could be of some help because they may be under pressure?
Mr. KRUMHOLTZ. Not to my knowledge.
Mr. LANTOS. Not to your knowledge. How about you, sir?
Mr. SCHRAGE. Congressman, the best way we can honor——
Mr. LANTOS. I am asking you a direct question. I do not want your philosophy. Have you reached out to the families that have been adversely affected?
Mr. SCHRAGE. Congressman,——
Mr. LANTOS. Yes or no.
Mr. SCHRAGE. We do not offer a service that puts anyone in that situation, and the best way we can honor their situation is to ensure that we are not associated with a similar situation. We do not offer products that would put us in the position of putting people like that in danger.
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Mr. CHANDLER. We are not a service provider in China. We do not have information regarding individual users of the Internet. We do not track individual users of the Internet. We have no access to any information or any relationship with individual users of the Internet.
Mr. LANTOS. I have heard a great deal of legalese, so let me pose a couple of hypotheticals. If you operate in a country which discriminates against women, like Saudi Arabia, for instance, would you comply with government orders which would compel you to discriminate?
Mr. CHANDLER. We do have operations in 50 different countries of the world, and I do not know what our human resources policies are in Saudi Arabia or elsewhere where there might be laws which treat men and women differently than we do in this country.
Mr. LANTOS. What would be your judgment? Would you comply, because I have now heard the words ''complying with the law'' ad nauseam and ad infinitum? If the local law compels you to discriminate between men and women, would your company do that?
Mr. CHANDLER. What I can do is provide you with information about what we actually do do in that respect in different countries of the world because different countries, including industrialized countries, have different standards for how men and women can be treated, different programs that have to be offered to men and women separately which are different than what we have in this country.
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Mr. LANTOS. I am not talking about benefits. I am talking about discrimination. If a government compels you to discriminate against women, would your company comply?
Mr. CHANDLER. I do not know what types of requirements we are being asked to comply with.
Mr. LANTOS. It is a hypothetical question. If you were in a country where there is discrimination against women, and there was a legal requirement that obligated you to discriminate against women, would you comply with that provision of law?
Mr. CHANDLER. Well, I do not know what is meant by ''discrimination.'' I am not trying to parse legalistically your question.
Mr. LANTOS. You are the only human being in the room who does not know what the word ''discrimination'' means.
Mr. CHANDLER. Well, it means different things in different countries, and there are different standards in France, in the United Kingdom, here, as well as in Saudi Arabia, and for that reason we do have policies in each of the countries where we operate, and I am happy to provide you a summary of those that will help inform a judgment of how we treat our people globally. We do operate in 50 different countries.
Mr. LANTOS. Mr. Schrage?
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Mr. SCHRAGE. I am not sure how laws would require us to discriminate against women in the services that we offer. I do not believe we would comply with such a request. It is a hypothetical question, and you are asking me to sort of speculate about how discrimination relates to the kinds of services that we offer.
Mr. LANTOS. How about you, sir?
Mr. KRUMHOLTZ. Congressman, if we conclude that restrictions, either on our ability to provide services or our operations, are so stringent, there are many things that we will refuse to do, and we would back out of that market.
Mr. LANTOS. They would not be stringent. They would only be discriminatory. Would you participate in discriminatory policies?
Mr. KRUMHOLTZ. We have an antidiscrimination policy corporate-wide, so the answer would be no.
Mr. LANTOS. And that applies equally in every country.
Mr. KRUMHOLTZ. Yes, sir.
Mr. LANTOS. Even in countries where there is discrimination against women.
Mr. KRUMHOLTZ. Again, if the discriminatory restrictions are such that they adversely affect our ability to operate in that country or to provide our services to our customers, we would consider backing away from that country.
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Mr. LANTOS. How about you, Mr. Callahan?
Mr. CALLAHAN. Congressman, I also do not think it would be appropriate for me to speculate as to how a hypothetical would apply to our services or not. However, I will say that we have been very up front about the fact that our compliance with Chinese law in this case has caused very serious consequences, and it is one that we look forward to trying to find a way to address as an industry.
Mr. LANTOS. Would you have come up with the new statement of principles had it not been for this congressional inquiry?
Mr. KRUMHOLTZ. Is that directed in terms of our new blogging principles?
Mr. LANTOS. Yes.
Mr. KRUMHOLTZ. Actually, we were very distressed by the take-down request that we felt compelled to comply with on December 30 of last year. As a result of that take-down request, we launched an internal review of what our procedures were, what was in place in that instance, and what could we do to improve them. Hence, that was what drove the new policy.
Mr. LANTOS. Thank you, Mr. Chairman.
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Mr. SMITH OF NEW JERSEY. Thank you, Mr. Lantos.
Mr. Pomeroy? Blumenauer?
Mr. BLUMENAUER. Thank you, Mr. Chairman. I appreciate very much the gist of the testimony that has been offered up here. I think you have been able to identify that each company has different services and different circumstances, and I think you have helped me understand that just asking the same question to each of you actually would produce different responses because you have different business models, different product lines, different services, and I think that is very important to have part of the record, and I hope as this sort of settles down a little bit and as we sift through it, we understand that Microsoft, Google, Cisco, you are discrete businesses involved with different activities, and I appreciate having that clarified.
I think you have also endured a great deal right now, and there are other people on the Committee who want to engage in a discussion, which I do think is very useful, but if we could, because you are each discrete enterprises, different business models, different practices, different requirements, I would like to get a sense of what your competitors are. Are you unique? Is there any choice as far as China is concerned, where you have unique leverage, that they either deal with you, or they are at some serious disadvantage? Mr. Chandler, if you want to start.
Mr. CHANDLER. Sure. Thank you, Congressman. In his opening remarks, Chairman Smith alluded to a tender in China where Cisco's products—he said four out of six contracts were awarded to Cisco and another American company, and there were, I think, two portions of that that I believe were awarded to a Chinese company as well.
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In every single market space that we operate in we have vigorous competitors in the routing and switching markets that a lot of the discussion about URL filtering and the capabilities of our products in that regard for network management, there are probably at least a dozen companies worldwide that supply at least some segments of that, including very aggressive and hard-charging Chinese companies that are in the marketplace as well. It is a very competitive market for us not only in China but around the world.
Mr. BLUMENAUER. Thank you.
Mr. SCHRAGE. We have several lines of business. Some of our lines of business overlap and compete with my colleagues to my left. Some of them do not. In China, as I mentioned earlier on, we have particular challenges with local competition and, in particular, one local competitor whose dominance in the market is actually much, much greater than our market power.
Mr. KRUMHOLTZ. We, too, have several lines of business, many of which we are engaged in China, and there are competitors across all of those lines. I mentioned in my written statement and, I think, in my oral statement as well that with respect to MSN Spaces, our personal Web site or blog service, there are a number of Chinese competitors. As a software provider, probably our greatest competitor is the extraordinarily high piracy rate in China which is, I believe, still over 90 percent despite the very excellent work done by our own Government to advance our industry's agenda in that regard.
Mr. CALLAHAN. Through Yahoo! China, when we operated the company, which is now operated by Alibaba, we provided search services, communications, and e-commerce services. Now that form takes the Yahoo! China division of Alibaba of which we are a shareholder and a board member.
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Mr. BLUMENAUER. Are there direct competitors with Yahoo!/Alibaba in those areas?
Mr. CALLAHAN. Yes, there are. The competition here, of course, the local competition in search and communications, and, I believe, an eBay substantially in China as well.
Mr. BLUMENAUER. Thank you. My sense is, just in listening to your testimony, that there are upwards of 100 different countries around the world where you collectively do business in many of the larger countries you probably all are engaged, and you are subjected to a wide variety of local laws, rules, and regulations, and you referenced Microsoft's interest in piracy, the rules of the game, something that a number of people on this Committee are deeply concerned about, not just intellectual property but a whole range of areas.
As a matter of course, do you drill down into the rules and regulations, the Constitutions of the various 100 countries to try and find out are they consistent with their Constitution? Do you do a separate legal interpretation of all of the rules and regulations that you are required to abide by, or do you assume, like in the 50 states, that the people who are in charge more or less know the rules of the game, and you abide by them? I just wonder because there is a hint here of: ''Maybe this isn't Constitutional. Is there a conflict with other provisions of Chinese law?'' How do you operate in the 100 countries?
Mr. SCHRAGE. We have a big legal department that is not that big. As a practical matter, when we hear from government officials about how they define the laws and what they define compliance to mean, we generally accept that.
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Mr. BLUMENAUER. Germany, Great Britain, Seattle?
Mr. SCHRAGE. All of those.
Mr. BLUMENAUER. Do any of you do anything any different? Are you aware of anybody that does any different?
Mr. CALLAHAN. Congressman, where we have local operations we do have in most of those places attorneys on the ground that would do the local legal evaluation. They work as members of my department, and we would comply with laws as we are required to.
Mr. BLUMENAUER. I am interested if the notion of censorship ought to be pursued through our U.S. trade representative as a barrier to trade. Is that something that should be pulled out and discussed separately? Would that be helpful? Is that possible?
Mr. SCHRAGE. We have certainly indicated, as I indicated in my written testimony, that we think that that would be a conversation worth pursuing, again, not necessarily just with respect to China but as an issue around the world.
Mr. CALLAHAN. We think that there is a real opportunity, given the highlight on this issue, from the attention of the Subcommittee and the hearing that was called by the Chairman, the interest from the State Department, and the interest among the companies here, as well as broadening this issue to not just be about the Internet but make it about media and telecom. We think that, given the groundswell of particularly public interest in zeroing in on the issue itself, there is an opportunity here for government and industry to cooperate together and try to make some progress, so we are encouraged by that. Certainly, censorship is one of the issues as well.
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Mr. BLUMENAUER. Mr. Chairman, I appreciate your courtesy and our Ranking Member's courtesy to me. This was very instructive. I think I have learned a lot just as a result of the testimony, the vigorous questioning, and I am looking forward to where we go from here to try and take difficult questions, elaborate on them, look at ways that we can make contributions. But I think just this hearing has provided, I think, an important contribution to deal with the serious issues that you have raised, and I appreciate it.
Mr. SMITH OF NEW JERSEY. Thank you, Mr. Blumenauer. Thank you for your work on this. We will share—as a matter of fact, we have already shared, and hopefully your office has it—the text of our draft bill, and obviously it is a work in progress, so we look forward to your input.
Chairman Burton?
Mr. BURTON. Thank you, Mr. Chairman, and thank you, gentlemen, for being here today. I appreciate it.
You know about the Golden Shield being used as a tool to not just improve police efficiency but to monitor Chinese civilians, and if they say or do anything acrimonious or opposing the government, they put them in jail for a long time. What I would like to know is if you were not involved over there, would other domestic companies over there be able to do the same job that you are doing?
Mr. CALLAHAN. Congressman, from Yahoo!'s part, we no longer operate a company on a day-to-day basis there, but the services that we provided at the time we believed to be very comprehensive, robust, and of a better quality than the local competition.
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To answer your question directly, and the other representative asked it as well, there are direct competitors in the search, e-mail, communications, and e-commerce platforms——
Mr. BURTON. What I am trying to get at is I have been reading in the paper about how American companies are over there assisting the government in keeping a clamp on people who are dissidents and people who oppose things that are going on in the government. What I am trying to get at is if Microsoft, if Yahoo!, if Google, if all of you had not been over there, would this have taken place anyhow, and could they have done it in as efficient a way as they have done it? You know the capabilities of your company. I am just asking you, could it have been done by a local or domestic company over there or companies?
Mr. SCHRAGE. Congressman, we did not enter the market until just recently, and part of the reason we entered was because other people were doing it, and so we, as a competitive reason as well as for the other reasons I have outlined, that is why we made the difficult decision we have made. So, yes, there are other competitors who claim to do precisely what we do. We do not think they do it as well as we will, and we think we will win as a competitive matter, but the market would continue and would grow whether we are there or not.
Mr. BURTON. What do you think the answer is, because you, like all of us, believe in freedom of speech and free enterprise and the ability of people to live under democratic institutions? What do you think about your products being utilized by the Communist government over there to enforce the police state? What do you think about that?
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Mr. SCHRAGE. As I hope I made clear in my testimony, we are not happy about it at all, and that is one of the reasons why we think it is a great idea to have joint industry action and an as good, if not even better, idea for us to work with the State Department and the Congress to find ways to help us.
Mr. BURTON. Are you, as an industry, working together to try to find the solution to this problem so that you are not perceived that way?
Mr. SCHRAGE. I think those efforts have begun. I feel confident they will accelerate. We will see where they go, but we see the need, and we are hearing you and your colleagues loud and clear.
Mr. BURTON. Okay. There is a bill that was introduced by Representative Cox—I am sure you are familiar with it—H.R. 2216, which would authorize $50 million to develop and implement a global Internet freedom policy, combat state-sponsored and state-directed Internet jamming, repressive foreign governments such as the PRC, and the intimidation and persecutions by such governments of the citizens who use the Internet.
I presume, since you guys are going to be talking to each other about this, you will be working with us to try to get something like that passed through the Congress that would allow people a modicum of freedom in using the Internet in those countries.
Do any of you have any outreach programs for people or educational programs for people in China in communities over there?
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Mr. KRUMHOLTZ. We have a program—actually it is a global program—I am speaking for Microsoft, Congressman—called Unlimited Potential in which we are going into countries all over the world—we operate in 90 countries, as I testified earlier—and establishing community technology learning centers and providing underserved populations the ability to get basic IT skills training. So we have a number of projects in China.
Mr. BURTON. Have you read Congressman Smith's draft bill called the Global Online Freedom Act of 2006? Have you had a chance to look at that?
Mr. KRUMHOLTZ. I have not.
Mr. BURTON. I wish you would. Mr. Chairman, could you give a copy of that to all of them so they could take a look at it and see if there are any additions or deletions that you would like to see in that act that would help us in our work to help solve this problem?
I think I have one more question, Mr. Chairman.
Have you any kind of counter-censorship software that is currently in production or could be used by people in countries with repressive regimes that they could use right now, counter-censorship software? I am sure you know what I am talking about. Do any of you have anything like that that could be used or distributed or purchased?
Mr. KRUMHOLTZ. Not that I am aware of.
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Mr. CALLAHAN. No, sir, not Yahoo!.
Mr. BURTON. Any of you? Could that be developed? I do not have the technology skills that you guys have. It seems to me, if you can come up with a program like you have, you could come up with one that would countermand that or counteract that. Would that be possible?
Mr. CHANDLER. There are a number of efforts underway, Congressman, and I think Chairman Smith alluded to several of them in his opening statement, that are assisting people in evading censorship. The key to being able to nourish those programs and support them will be having an Internet that operates globally on one standard. Efforts such as the Chinese undertook a year ago to set up their own standard for some Internet access devices only allow Chinese companies to manufacture them, which our Government pushed back very aggressively and so far successfully, although we anticipate it will come back.
Maintaining that one global standard will be essential to allowing those efforts that are going on to succeed, and there are a number of them. One was highlighted in the Wall Street Journal just this past Monday called ''Freegate'' in North Carolina. There is an effort out of Harvard. There is one at the University of Oregon and Cal-Berkeley as well. So there is a lot of that activity happening, and its success will depend on having a standardized Internet globally, and that is a key interest of ours in maintaining an open Internet.
Mr. BURTON. Well, I appreciate very much you fellows coming here today. I know you probably approached this hearing with a great deal of trepidation, but if you are willing to work with us, I am sure the Congress wants to work with you to help solve this problem. I cannot believe that those of you who have made your millions in the free enterprise system would like to see a repressive government like that to take your tools and use them to repress their own people. So, hopefully, we will work together to help solve this problem, and thank you very much for being here.
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Mr. SMITH OF NEW JERSEY. Mr. Faleomavaega?
Mr. FALEOMAVAEGA. Thank you, Mr. Chairman. I was taking circles over here from Mr. Krumholtz's testimony saying that Microsoft currently operates in 90 countries.
Mr. KRUMHOLTZ. Yes.
Mr. FALEOMAVAEGA. And I believe also Mr. Chandler mentioned that Cisco operates in 50 countries.
Mr. CHANDLER. Approximately, yes.
Mr. FALEOMAVAEGA. Approximately 50, give or take 5. And, Mr. Schrage, I did not get the number of countries that you operate, Google does.
Mr. SCHRAGE. Wherever there is a computer and an Internet connection, you can probably reach Google, so you tell me how many places that is, and that is how many places——
Mr. FALEOMAVAEGA. Can you kind of wing it, an approximate number of countries that Google is——
Mr. SCHRAGE. I think it is probably around 100 countries.
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Mr. FALEOMAVAEGA. A hundred countries? How about Mr. Callahan with Yahoo!? How many countries do you operate under?
Mr. CALLAHAN. Anywhere you could reach Google, you could reach Yahoo! as well.
Mr. FALEOMAVAEGA. So it is 100 countries as well.
Mr. CALLAHAN. We have operations in just over 20 countries.
Mr. FALEOMAVAEGA. Twenty?
Mr. CALLAHAN. Yes.
Mr. FALEOMAVAEGA. I thought you had more than that.
Well, gentlemen, welcome to the lion's den. I am sure that this is probably the first time that you have had to appear before a congressional Committee, and I wanted you to know the tremendous sensitivity that Members of this Committee have, and I would like to note for the record that in the years that I have served as a Member of this Committee I cannot say more and have the highest and utmost respect for the Chairman of our Subcommittee not only myself as a member of the Human Rights Caucus, but in the years that he has served on this Committee, he certainly has my respect in expressing the same concern to countries that we deal with. I am absolutely certain that what we are trying to pursue here is to make sure that our companies doing business in other countries of the world have that same sense of sensitivity and understanding of freedom and what democracy is all about.
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In the announcement that was made by Secretary Rice about the formation of this Global Internet Task Force, it is always nice to make announcements and say that the State Department or the Administration is going to look into this problem, and I wanted to ask you gentlemen, is the Administration really serious about addressing the issues that the Chairman and the Members of the Committee have brought to your attention in terms of having to deal with a country like China?
My reason for asking how many other countries you deal with—in what other countries have you encountered similar situations where there are serious questions of censorship and prohibitions, the very example that you cited, Mr. Callahan, about Shi Tao? I am curious. Is this the first time that you have encountered this kind of situation with the Chinese Government, or have you encountered similar situations with other countries as well? I would like to have your comment on that.
Mr. CALLAHAN. For Yahoo!, the Chinese situation and the Shi Tao case are certainly unique.
I would say that as to your question about the State Department initiative, we applaud that, embrace it, think it is headed in the right direction. We think that help from the Executive Branch to help all the companies realize the full potential that our peers in other companies in media and telecom could offer to push forward free expression is an important initiative. We think that American companies offer a unique combination of modernization and technology, and there could be a very compelling opportunity to move forward with that.
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Mr. FALEOMAVAEGA. Mr. Krumholtz?
Mr. KRUMHOLTZ. With respect to the State Department initiative, we also applaud it. We think that it is going to be critical for both industry, the State Department, the Congress, and certainly the NGO community, too, which has a very important voice on these issues and a great deal of expertise, to come together to try to arrive at—the term ''best practices'' was used earlier, principles that could help guide United States corporations in how they do business not only in China but in other countries as well, going to your point about restrictive regimes or repressive regimes in other countries. I will say, I think, from our experience, China does present a special case and a particular challenge.
Mr. FALEOMAVAEGA. Mr. Schrage?
Mr. SCHRAGE. I really would just echo the comments that were just made. I think we think, again, based on the earlier panel, that the State Department is serious about it, and we are, too. We hope that together we can do something meaningful.
Mr. FALEOMAVAEGA. Mr. Chandler?
Mr. CHANDLER. Because we sell the same equipment with respect to the URL filtering capabilities we were discussing globally, and the filtering technology is a fundamental part of network management, we do not see as a company the implementation that is done by the user. We certainly have seen information that suggests there are a number of countries around the world that do perform filtering for political reasons as opposed to the technical reasons and network security reasons that we design the features.
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Mr. FALEOMAVAEGA. The compliments that I had offered earlier in my statement saying that the one thing the Chinese Government is very sensitive about is, through the Internet, is pornography and gambling of a sort. I wondered, just to be curious, do you keep tabs of these types of things that come in through the Internet in China? How do you do the filtering process? Is there some kind of a standard or measuring device that you have to do this in order to comply with the Chinese requirements?
Mr. KRUMHOLTZ. Congressman, with respect to MSN Spaces, our blogging service in China, we respond to requests by Chinese authorities, legally binding requests, to take down content. You mentioned pornography. It so happens that we received a request from Chinese authorities just last week to take down a blog. When we went to examine the case, it turned out that it was not anything about political speech but about pornography, which actually, under our own terms of use, we would have also, if we had identified it before being told about it, would have taken it down.
Mr. FALEOMAVAEGA. Mr. Callahan?
Mr. CALLAHAN. I cannot speak to the current operations of Yahoo! China, as I mentioned, but when we did operate the business, similar to Mr. Krumholtz, Yahoo! would respond to notices to take down content in a similar fashion.
Mr. FALEOMAVAEGA. I think, if I might add to the course of the hearing this afternoon in terms of the tremendous problems that we are faced with in a country like China, as I am sure that the next panel that will be testifying before the Committee, it is not easy, and it is like a Catch 22 here. We are faced with a country that is growing economically with a tremendous potential as to why it is such an attractive market for just about every democratic country or the industrialized nations that want to invest and be present there, and I am sure that is the very reason why you are there also and your respective companies.
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I remember noting that it took United Airlines about 15 years even just to get to Japan. I am sure that you must have had the same problems in trying to get access to the market or even get licensing. Since Google seems to be the last one that has gone in there, how long did it take you to get your license?
Mr. SCHRAGE. You know, I do not exactly know when the application was made, but we began the process of deciding whether or not we would do business within China, I would say, more than a year ago. So the whole process, from the time we really began to look at it seriously until the time we got the license and indicated we would launch the service, was well over a year.
Mr. CHANDLER. We have been active in China since 1994 in providing Internet access equipment.
Mr. KRUMHOLTZ. We have also been active in China since the mid-1990s.
Mr. CALLAHAN. We first established operations there in 1999 and then went to a strategic partnership where we were an investor in 2005.
Mr. FALEOMAVAEGA. So, gentlemen, you are pretty much aware, then, of the situation in terms of our not only diplomatic relationship with China but in every aspect of trade and commerce, but do I sense a consensus among our four big corporations' presence in China the sensitivity that we have here in this Committee to see? I think the bottom line, as I note here in my notes, is censorship, and that if it affects the lives of the people in China and how you deal with on a commercial basis, I think this is where the rubber hits the road—is that how you say it?—and I sincerely hope that not only will we be working with the Global Internet Task Force, but the fact that Chairman Smith has proposed a draft bill, we certainly will welcome your input and see where we need to go from there.
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Thank you, Mr. Chairman, and thank you, members of the panel.
Mr. SMITH OF NEW JERSEY. Thank you very much.
Mr. Rohrabacher? Chairman Rohrabacher?
Mr. WEXLER. I thank Mr. Rohrabacher for yielding. I very much appreciate that. I would like to associate myself with Mr. Faleomavaega's opening remarks wherein he complimented the Chairman. No one has a finer record on these issues than Congressman Smith.
I would like to offer—I think I have listened to most of the hearing—a different view. Congressman Lantos asked the question, should IBM be ashamed to the degree they were complicit with the carrying out of the Final Solution during the regime of Nazi Germany? Quite frankly, it is an easy answer. The answer is yes. IBM should be ashamed.
But there is also another question that should be asked, and it should not be limited to IBM, if we are going to be fair. The question is, should we be ashamed that the United States Government did not do certain things that it could have done that would have dramatically affected the ability of Nazi Germany to prosecute the Final Solution? Yes, the United States Government could have bombed tracks leading to extermination camps. Yes, the United States Government could have made a different choice to bomb concentration camps.
I only bring that up because, in listening to this intercourse and this interaction, I think I agree with 100 percent of what has been said by the Members and asked of the witnesses. But there is one major gap here. We are not asking the same question after we asked them, not IBM but Microsoft and Yahoo! and whatever, are you ashamed? We should be asking, are we ashamed of the United States Congress? Are we ashamed of what the United States Government has done? Let us at least be candid and not be duplicitous.
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The United States Government has far more tools at its discretion than does even these important companies. This Congress, most recently—now I disagree with it, and I know that there are members on this panel that disagree with it, but the United States Congress, speaking for the American people, gave up our biggest tool. We gave China most favored trading status, and the President signed it. If we are serious about human rights, if we want human rights to be the be all and end all, then do not give China most favored trading status.
If you go back in time, we should still have recognized Taiwan, not China. Now, I am not advocating for any of these measures, but my point is it is somewhat duplicitous of a government which has all of the tools, let alone, the American Government, the most powerful Government in the world, to then pinpoint a judgment call that corporations have made. And in effect, what we are saying, and it is a legitimate position, what, in effect, we may be saying is that X corporation should prioritize the issue of human rights and the consequences that an adverse government might take as a result of using their technologies, prioritize that interest versus the interest of their shareholders, the interest of their employees, the interest of their responsibility as a corporate citizen, prioritize that and refuse to do business in China.
Now, that might be a legitimate position for us to take. That may be a legitimate position, but if we are going to take that position, then let us at least have the consistency to say that trade for the entire country, the hundreds of billions of dollars that are related to it, is not as important as human rights. Let us do what we can do to dramatically affect human rights.
I would venture to say that the Chinese Government, if the Congress of the United States passed a law that said trading status will be affected if you, Chinese Government, continue to do what you are doing in terms of free speech and the consequences of them exercising it or not exercising it, that will have a far bigger impact than Microsoft saying, I am picking up my marbles and going away.
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Mr. Chairman, I think this is probably the most profound hearing I have sat through, and I thought Mr. Leach's questioning and the interaction, to me, that is textbook for what this Congress should be doing, and I applaud it. But to me, the obvious consequence of this entire interaction is not necessarily an examination of what they do, but it is what we can do to affect positively the behavior of the Chinese Government in a way in which we will not have to worry about how they choose to interact with companies like this.
They are in a no-win situation, these companies. I do not know if I agree or disagree with the way in which they have behaved. I honestly do not know, but, and I will stop with this, Mr. Chairman, the Washington Times today—I think the best thing I have ever seen written in the Washington Times on their editorial page, last paragraph: No one should even want tech companies to try to decide which government policies are legitimate or dictate what the Chinese leaders should do to promote development of democracy. Advocate and advise, fine; boycott, no.
They are right. Do we want to hand over the reins of government to these guys? They have been elected by no one, with all due respect. They are great business people. We have been elected to make the fine distinctions between morality and trade and whether or not we want China's vote on Iran and whether we need their cooperation on North Korea, and we are supposed to balance all of that, but these business people are not supposed to balance it.
Thank you, Mr. Chairman, for giving me the time, and I think there is one issue that it will be quick to ask because I think, to a degree, it goes to the heart of what we are talking about in terms of their leverage. There was reference made to a fifth company, which I said is a Chinese company, and if there is a fifth company, which I presume that there is, could someone quickly, because I have used a lot of time, and I apologize, could someone describe what they believe reasonably would be the consequences of you four companies, and it is somewhat ironic—we must laugh at ourselves, and I respect Mr. Payne enormously, but when Mr. Payne starts talking about the consequences of antitrust behavior and essentially advocating that these companies get together and engage in that kind of behavior, it is ironic that we are doing it with a member of Microsoft on this panel that, you know, for right or wrong, was the recipient of all of this.
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Could somebody tell us, if the four of you got together, not in violation of antitrust laws, and tomorrow said, we are packing our bags, what do you reasonably believe would be the consequences to the development of the Internet in China? Would these poor victims of the Chinese policy of this type of persecution, do you think they would be any better off?
Mr. SCHRAGE. I think that there would be less information, less available to people in China.
Mr. KRUMHOLTZ. I believe it would be a lose-lose. I believe that Chinese citizens would lose, and I believe that all of those of us who would like to promote greater democracy, greater freedom of expression in China would also be at a loss.
Mr. CALLAHAN. I would agree that the innovation and the open communication and ability to access all sorts of information would be restricted.
Mr. CHANDLER. We have vigorous competitors among Chinese companies and other non-American companies, as well as other United States-based companies. A withdrawal of companies that were committed to building an Internet based on global standards from China would have the effect of potential balkanization of the Internet and a closing down of information availability rather than an expansion of it.
Mr. WEXLER. Thank you. Mr. Chairman, if I could have 20 more seconds. I think this hearing points out maybe better than any other the nuanced interests and policies that we have as a people and a nation with the country of China and their people. What I think this hearing points out is that for every advantage, there may be a disadvantage, and we need to act very carefully and cautiously when we try to determine what we think will be consequences in China. That is the role of the government.
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I do not think that is the role that we should try to engage companies to do to substitute for our judgment. They have their responsibilities as corporate citizens. They have their responsibilities to their shareholders for the safety of their employees. We pass laws to encourage them to behave in certain ways, but when they are acting pursuant to our laws and doing what they legitimately do as business, this hearing is fabulous in terms of information, but I would not want to see us pass the buck to them and not take those hard responsibilities ourselves. Thank you very much, Mr. Chairman.
Mr. ROHRABACHER. Mr. Wexler, I am happy that I was able to yield my time to you and now I have my own time. I think you have made some important points, but I do believe that there is a fundamental flaw in your logic.
Mr. WEXLER. There usually is.
Mr. ROHRABACHER. No, I would not say that. We agree on many, many things and the two of us have worked on many issues, but in terms of this issue, I think it is important for the public to recognize that when you suggest that these companies should not be out there having to make these decisions on their own and set these standards on their own, that is our job and that Congress has failed, there is another dimension to that, there is another layer to that onion.
Who do you think has been pressuring Congress to establish this opening so that big business can rape the people of China?
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Who do you think has been setting up the think tanks in this city with their excess profits from dealing with dictatorships?
It is big business. Come on. I am a Republican, I am not supposed to be against big business. You are the guys who are supposed to be saying this, not me. It is clear as a bell.
The companies that are doing business in China, they are making huge profits off their dealings with this dictatorship and they take a portion of those profits to try to influence what Congress does or does not do.
Most favored nation status? Who lobbied for that? The corporations lobbied for that. Of course they did.
Yes, we do have a responsibility. We in Congress have a responsibility to set the standards. You are right. These corporations should not be the ones setting the standards for the American people, but they have been doing it. They have been doing it by influencing us directly and by trying to influence public opinion by setting up these foundations and think tanks. We documented that yesterday at a hearing of my Subcommittee on Oversight and Investigations.
So, no, we cannot let these guys off the hook because they are on the hook. They are not like doing business with dictators, but they are trying to influence government policy in a way that will permit them to continue to do business with dictators. Corporations are not interested in the well being of the people of China or any other country, but let us do our job, let us think about it and try to set up a system in which these fellows cannot make decisions that are going to help the police departments of a dictatorship, which leads me to my first question of you, Mr. Chandler.
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Does your corporation differentiate at all between dictatorships and democratic governments in terms of whether or not you are willing to be involved with them in setting up systems that help police departments?
Mr. CHANDLER. We do in accordance with the principles that you have established for us. For 30 years, the discussion has gone on in this country and, as we have seen today, there were different opinions within the United States Congress on what the nature of that engagement with China should be. Certainly——
Mr. ROHRABACHER. How about other dictatorships?
Mr. CHANDLER. Certainly——
Mr. ROHRABACHER. How about other dictatorships? Let us forget China. You re right. Here we are, this Congress, because we have not set—I have been a long advocate of a dual process and dual standards for corporations doing business overseas: One standard for countries that are dictatorships and other standards for democracies. We have not done this, but do you do that with any dictatorships? Have you established any—not just what we have done in China, but what we do throughout the world?
Mr. CHANDLER. Well, I would start by saying I think some people have alluded to question about events 60 years ago and I think we have moved to a very different place from a time when American companies and Americans policy could turn a blind eye to repression, persecution and genocide. For 30 years, we have been bringing human rights concerns into our lawmaking about where United States companies should engage, how they should engage, not just with respect to China, but with other repressive regimes around the world.
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Mr. ROHRABACHER. Let note that I think you are absolutely wrong. I have been around here 18 years, I worked at the White House 7 years before that. Your analysis is absolutely wrong. No, we have not tried to rein in our corporations in doing business in dictatorships. The only time we have been able to do that is when it is a direct threat to the United States security, but it has nothing to do with those moral positions at the basis of our society of life, liberty and the pursuit of happiness or any of these rights of religion and other things that we hold dear as a people. Our Government has done a rotten job of that.
Mr. CHANDLER. Well, what we have to comply with, however, are regulations put in place pursuant to laws that the Congress has passed which do restrict where our products can be sold and who they can be sold to on concerns that include national security and human rights concerns and we do comply with those.
Mr. ROHRABACHER. And in China, how has that hindered, for example, the requests from police and national police in China with your company?
Mr. CHANDLER. Well, there are certainly some agencies of the Chinese Government that we are prohibited to provide our products to. There are other agencies which require a lengthy licensing process where the government makes a determination as to whether it is appropriate to supply products or not and we comply with those.
Mr. ROHRABACHER. How about the police? Is the police one of those?
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Mr. CHANDLER. There are very stringent restrictions on equipment that is considered crime control equipment under the Foreign Relations Authorization Act that was enacted after the Tiananmen Square incident because of our country's reaction to what happened at that time. For some equipment, there could be restrictions. For other equipment, there are not restrictions. The law makes differentiations between different types of equipment and uses.
Mr. ROHRABACHER. Okay. So if we have any complaint about that in terms of your interaction with the police in China, we will just use China because that is what we are discussing, but there are other dictatorships in the world, that we should actually not be coming to you crying, but we should be basically just trying to reset the restrictions and make them tighter if we think they are too loose.
Mr. CHANDLER. Well, I think as an economy that is built around a private sector that carries out economic activity, we carry out our activity mindful of the rules that you set and the responsibilities that come from the system that we have and I think that is a reasonable way to approach that issue.
We believe that our products are a force for providing information around the world and empowerment and enlightenment to people and that is the effect that our products have had in countries all over the world.
Mr. ROHRABACHER. And you do not see that your company has ever lobbied Congress to try to establish what those rules were?
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Mr. CHANDLER. We have not lobbied Congress on export control rules. We make administrative appeals from time to time to make sure the rules are properly implemented, but we have not lobbied, at least to my knowledge, at any time on the export control regulations with the U.S. Congress.
Mr. ROHRABACHER. Well, I heard your caveat there. We call them weasel words here, ''to my knowledge, we have not,'' but I am sure somebody will be listening today and if your company has indeed lobbied in order to loosen the restrictions or change the restrictions, I am sure we will find out about that.
Mr. CHANDLER. I am confident I will hear that as well, Congressman. Thank you.
Mr. ROHRABACHER. All right. Okay.
Again, let me apologize that this happened to be one of the days that I had to meet with the President's Science Advisor, Mr. Marburger, so I have been deeply involved in other technology issues, but it is clear that we have had high technology companies suggesting that if we just open up and do more business with China that there is going to be a liberalization, we are going to find a more democratic and open society at the end of this interaction, and now we come to a point that we see high tech companies strengthening China's police force, even after there has been no liberalization, but in fact there has been a worsening of certain restrictions, especially on religious people and Falon Gong, for example.
Do you not think that that is sort of a reason for concern, I would leave that up to the whole panel, everything we have been told about how things are going to get better if we just deal more openly, have more economic interaction, and now we are reaching a higher stage of technology and we are finding the technology being used by the police state against the people, rather than liberalizing the society?
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Your contention is with more information out there things are going to get better, but yet at the same time you have a fellow at the end of the table who is selling the technology capabilities of his company to strengthen the police that are controlled by the dictatorship. Does that not seem a little contradictory to you?
Okay. I will leave it at that.
Mr. Chairman, I gladly co-sponsor your legislation on this and congratulate you for holding this hearing.
Mr. SMITH OF NEW JERSEY. Thank you very much, Chairman Rohrabacher.
Mr. Sherman?
Mr. SHERMAN. Thank you, Mr. Chairman.
I am going to focus on the privacy part of this, the other part being the censorship part. I hope I have enough time left over to get into that.
Mr. Callahan, I am a Yahoo! customer. I have a lot of e-mails up there and they are all domestic. Let us say that you get a call from the NSA saying they want you to give them a copy of all my e-mails that are stored in Yahoo!, I have them going back 2 or 3 years, because they think that is important to the war on terrorism.
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I am relying on your privacy policy. Can I rely on that privacy policy, that you are not going to give those e-mails to the NSA unless you get a court order?
Mr. CALLAHAN. Congressman, we do, of course, have a privacy policy, which, as you know, says that we will disclose information to law enforcement when required to. We do have a policy where we do not comment on specific law enforcement interactions, but I will say this——
Mr. SHERMAN. This has not happened yet, I hope, so this is not a specific ongoing investigation.
Mr. CALLAHAN. If you could let me finish?
Mr. SHERMAN. I am not high on the list of al-Qaeda operatives.
Go on.
Mr. CALLAHAN. We would only disclose information in compliance with law and with our privacy policy.
Mr. SHERMAN. Compliance with law. Mr. Rohrabacher was talking weasel words a little bit. Court order or letter from the NSA?
Mr. CALLAHAN. It would be in compliance with law, sir. I would not be able to comment on whether——
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Mr. SHERMAN. So if, for example, in its most broadly defined description of the power of the executive, the Attorney General says that the Executive Branch, without any okay from either of the other two branches, has a right to read absolutely everything you have in your files about me, you might very well agree and turn my stuff over without a court order?
Mr. CALLAHAN. It would not be appropriate for me to comment on whether certain action was authorized——
Mr. SHERMAN. Well, how am I supposed to be a user of Yahoo! if you will not tell me whether I can rely on privacy except by saying, well, we will decide later whether a e-mail from a sheriff in some obscure county says, ''I hate Brad Sherman, I want information about him, I think he is a terrorist,'' you might turn it over.
Mr. CALLAHAN. You absolutely can rely on Yahoo!'s privacy policy and we would only furnish information if it was in compliance with law.
Mr. SHERMAN. You are their chief lawyer and you cannot tell me now that it is not compliance with law to provide all of my data to an investigation from some county, a sheriff of a county that I have never been to.
Mr. CALLAHAN. Sir, in the example that you give, if we were served with proper legal process and we were required to furnish that information, we would have to give it, but we would not provide it unless we were required to.
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Mr. SHERMAN. Sir, you are assuming the answer to the question and pretending that that is an answer. I am asking you as the chief lawyer for Yahoo!, is an e-mail from some sheriff in some county stating ''I am the law, I am doing an investigation, I have a right to this information, give it to me now,'' is that a requirement that you would adhere to or would you go fight it in court?
Mr. CALLAHAN. That is not something we would provide your information to, sir.
Mr. SHERMAN. Okay. What if the letter comes from the NSA instead of a sheriff?
Mr. CALLAHAN. Again, sir, you are asking for my interpretation of something that is obviously very big in the news. I can say that would only furnish information in compliance with law.
Mr. SHERMAN. Okay. And you were willing to tell me that law does not require you to give my information to a county sheriff, but you are not willing to tell me whether law would require you to give it to the NSA in the absence of a court order of any kind.
Mr. CALLAHAN. I was responding, sir, and our policy, of course, is not to respond on specific interactions with law enforcement. I will tell you that we would not furnish anyone's information unless it was in compliance with law.
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Mr. SHERMAN. Okay. And I will ask all of you who operate in China, what have you done to tell your Chinese customers that they have a lower expectation of privacy and that you will comply not with the law of your democratically elected host government, namely the United States, but rather that you will furnish information upon the request of an un-elected, un-democratic and oppressive government in China?
These guys who are going to jail might die. Were they at least notified that that could happen to them?
Do we have a response from anybody who does business in China?
Mr. SCHRAGE. I actually do not know what kind of notice we give because we do not offer that possibility. We do not offer the service.
Mr. SHERMAN. I guess this is really address to Yahoo! and to Google.
Mr. SCHRAGE. I am representing Google. We do not offer the service.
Mr. SHERMAN. You do not offer an e-mail service?
Mr. SCHRAGE. Right. Where the data is maintained in China so it is not subject to Chinese law. The only way——
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Mr. SHERMAN. Well, wait a minute. The Chinese could tell you that under Chinese law they are expropriating all your assets in China unless you reveal information on your server in the United States. Then what do you do? What do you tell your shareholders when you lose hundreds of millions of dollars to stand up for principle? Are your shareholders willing to do that for you?
Mr. SCHRAGE. My understanding is that the only legally appropriate way for the Chinese Government to request e-mail information that is stored on servers in the United States would be to follow a process——
Mr. SHERMAN. What if they told you that under Chinese law your United States-based employees had to give them that information and if you did not comply within 24 hours all your assets in China were gone, your right to do business in China, your stock is about to drop by 20 percent, what do you do?
Mr. SCHRAGE. I am not going to say we are going to give them the data, if that is what you want me to——
Mr. SHERMAN. Nor are you going to say that you will not give them the data.
Mr. SCHRAGE. I think, again, as with the other question, it would be a terrible situation.
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Mr. SHERMAN. Could you not tell your Chinese customers albeit logging onto a United States-based site that you cannot assure the United States Congress that you are not going to rat them out if the economic pressure becomes intense?
We are talking about whether people go to the goulag or not. Should they not have a right to know whether their e-mails on your servers in the United States are safe or are not safe from the Chinese Government?
Mr. SCHRAGE. I think the likelihood of the scenario you are suggesting is really very small.
Mr. SHERMAN. You don not think the Chinese Government would use economic power in order to get information that they need to oppress people? Or you think they are just not interested in oppressing people?
Mr. SCHRAGE. I would like to think that the Congress and the United States Government might think that that exercise of power——
Mr. SHERMAN. Okay. That is why I am going to ask you next. Would you support a U.S. law that would answer that question for you and say that no U.S.-based employee can turn information over to an oppressive government unless there is a certification from the United States Government that it is a legitimate investigation of a legitimate non-political crime?
Mr. SCHRAGE. Again, I do not know the specifics of what you are saying, but in theory we would support that kind of additional support. Sure.
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Mr. SHERMAN. Yes. I cannot ask you to support a bill that has not been drafted yet, so I will be in touch with you.
Mr. SMITH OF NEW JERSEY. Will the gentleman yield?
That is precisely where our bill goes, so I am glad to hear of the support from Google.
Mr. SHERMAN. Good. We will list them as a co-sponsor. It will be the first Smith-Google bill.
Gentlemen, I have asked you some tough questions. I want to applaud you for the vast majority of the electrons in China that you are responsible for. The vast majority of Internet use in China is helping to open up that society and we have to make sure that in our effort to prod you to—should I use the phrase ''not be evil'' that we do not throw out the baby with the bath water.
Mr. Chairman, do I have any more time?
Mr. PAYNE. Would you yield for a moment?
Mr. SHERMAN. I will yield.
Mr. PAYNE. I just want to make it the Smith-Payne Google bill.
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Thank you.
Mr. SMITH OF NEW JERSEY. Thank you, Mr. Sherman. I really appreciate it.
Mr. SHERMAN. Thank you.
Mr. SMITH OF NEW JERSEY. Let me just ask you, if you would, to take back three questions, maybe even four. I had asked this earlier and I know that, Mr. Callahan, you pointed out that you are prohibited by Chinese law to tell us and to provide for these Subcommittees how many Chinese requests, is it on a daily basis, weekly basis, on average do you receive, but if you could take back and provide us for the record, all four of you, if you would, as it relates to your companies, one, how many Chinese requests on a daily or weekly average do you receive, we will give you this in writing, to censor content, provide information about users, remove Weblogs, update or fine tune filtering equipment?
Secondly, what legal process does China use, what documents does it present, how specific are these documents or papers when they make those requests?
Number three, can you describe your established procedures for handling Chinese requests for user information, both past and present, on user information or censorship?
Are their requests for clarification automatic referral to U.S. headquarters and legal counsel?
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Is there an appeal process? Do you say, ''Wait a minute, we do not think that should be provided''?
And, finally, in what circumstances would you refuse a Chinese request?
And, finally before yielding to Chairman Leach for some questions that he wanted to pose, Mr. Lantos brought up the issue of discrimination against women and I do have a question I would like to ask.
For years, I have led an effort to bring focus and scrutiny to the horrific practice in China of forced abortion and coerced sterilization. It is a direct consequence of the one child per couple policy.
As a matter of fact, we have in our audience here—Dr. John Aird, the late great Dr. Aird—a widow who was married to Dr. Aird for 58 years, Laurel Aird, and we are so grateful that she came to this hearing, but Dr. Aird wrote a book and he was the senior research specialist on China for the U.S. Census Bureau, so he was the top person within our own Government that tracked what was going on in China and he wrote a book called Slaughter of the Innocents, heavily footnoted, and he wrote many times thereafter about this disgraceful process where women have to get permission to have a child. They are told when and if they can have the one child. Brothers and sisters, like I said in my opening comments, are illegal. It is the only place in the world where they are absolutely illegal unless the government says you can have a brother or a sister. And it has led to gendercide.
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There may be as many as 100 million missing girls in China which also becomes a magnet for human trafficking, bride selling, plus the terrible crime that is committed against baby girls simply because they are baby girls and they are aborted through sex selection abortions in China with incredible tenacity on the part of China.
My question is—and let me also say, parenthetically, because we have referenced the Nazi dictatorship a number of times today, at Nuremberg, forced abortion was construed, and properly construed, to be a crime against humanity against Polish women. It is a horrific crime and it is practiced, it is commonplace in China, just like torture and other crimes that are committed by the government.
Again, discrimination against women, does your technology in any way, whether it be the censoring of e-mails, we know that women have children on the run and some of them are to evade the family planning cadres that way. I had a series of hearings and women sat right where you sit today, one woman who found an abandoned baby girl, made that girl her own like the Good Samaritan, only to have the family planning cadres knock on her door and say the one you are carrying has to be aborted and she broke down in tears. She was on the Golden Venture, as a matter of fact, and came here and was seeking asylum here and spent about 3 years in our own detention camps in Bakersfield before she was able to get free.
Having said that, does any of your technology, your e-mail as well as those who might type in trying to find some help to evade this coercive population control program, does any of your technology get to be used against those women?
I know you may not have that answer for here today, but I would ask you to take that back, having met so many women who have been coerced into abortions over these many years and having had many even sit here at witness tables, Harry Wu brought a woman out of China named Ms. Gao, and I will conclude on this, who ran a family planning program in Pujin Province. Harry Wu, of course, will be up in our next panel. She said right where you sit, ''By day I was a monster, by night a wife and mother,'' and she talked about how octopus like this network was to discover when and if women were pregnant. They monitored their menstrual cycles. What an invasion of privacy that is. That is outrageous. And our hope is that none of your technology and none of your corporate presence as well in China is in any way aiding and abetting that. I would ask sincerely if you could get back to us with that information as well as the others, unless you wanted to comment now.
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Let me go to Chairman Leach.
Mr. LEACH. Chairman Smith commented on the profoundest issue of the right of life, which is in our Declaration of Independence, but I am going to come back to the liberty issue just for a second. I realize there is a huge challenge here, the distinctions between the necessity and the good of commerce and the problem of values and I just want to ask one set of questions just to highlight it and then comment in a little different direction.
As I understand the distinction between Yahoo! and Google is that Yahoo! requires a signed statement of the government to censor something. It is my understanding you censor Voice of America and Radio Free Asia. Is that correct?
Mr. CALLAHAN. Sir, I think there were two things that we discussed. The first was with respect to information on a user that we had to furnish, in the Shi Tao case, that was mentioned. That was pursuant to a lawful order that was signed and authorized.
As to censorship, we do not have a day-to-day operation in China any more, but at the time, my understanding was there was a list of prohibited sites from the government.
Mr. LEACH. So you have a piece of paper that they request for Radio Free Europe and Voice of America?
Mr. CALLAHAN. My understanding is that they would give that out to the companies for blocking purposes, yes.
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Mr. LEACH. And then with regard to Google, you would do this on your own, based upon the practices of others? Is that right?
Mr. SCHRAGE. Congressman, my understand is that——
Mr. LEACH. Would that have been in your license that you had to apply for?
Mr. SCHRAGE. What my understanding is, and, again, I have not read the license, I do not read China, my understanding is that the license requires us to comply with the law. I believe that in certain cases were given a list of URLs of sites that we have to block. My understanding is that there may be some additional stuff that we are required to do.
Mr. LEACH. But you do block Radio Free Asia and Voice of America? And presumably the BBC—would this apply to the BBC?
Mr. SCHRAGE. I do not know that. I would assume that, but I do not know.
Mr. LEACH. Well, I just raise this again, that you are both American companies and you are blocking American voices and that is an extraordinary phenomena.
Then I want to comment on a little bit the very powerful and very thoughtful statement of Mr. Wexler and his one point is absolutely valid, that it is principally the responsibility of the United States Government to do certain things. Corporations can do some thing and not do others as well, although corporations do have values, just as individuals have values and a corporation can make value judgments and often value judgments are competitive. There is a value judgment on certain censorship, there is a value judgment on whether opening to more information is a basic good. And so you have competing values on these judgments and you also have different constituencies. One of the really interesting phenomenons that this brings out very thoroughly is that there is a difference between a country and a government and a stockholder and your duties are first to your shareholders in many instances, although not all. And so these become competing values.
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It also underscores that maybe your government has reason to be acting in given kinds of ways and my concern a little bit is that I think that there is value in making an issue transparent and this hearing is part of the transparency of an issue and it shows your dilemma, it shows the dilemma of the Congress.
The can be productivity in government actions and legislation. There also can be counterproductivity and we often do counterproductive things as a government; and so one of the really big questions that we are all going to have to search through is whether this is a subject that is relevant and appropriate constructively for legislation and, if it is, what that legislation might be.
Now, one of the things that has been placed on the table this week which is new to this whole issue is the decision of the Secretary of State to form up a task force and I hope it is a task force that gets a lot of input from the private sector in a constructive way, likewise, with Congress. We are going to be very careful of this particular direction we go in.
My own personal sense is that Congress would be very wise to work with the State Department's task force as we attempt to develop legislation, if that is the path we go on.
I just raise this because I think this hearing will come to an end today on the basis of transparency issues, but what unfolds afterwards is going to be something thaIs going to have to take a lot of input from a lot of different sources and I think that this group of people at the table are going to want to be very attentive to it.
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I will tell you, the embarrassment that should apply to any government that censors is very large and so to a large extent that is where the principal embarrassment goes. Whether despite all the ironies that you are the symbol of expansion of knowledge in the world today companies, to cut off knowledge is obviously awkward and I think all of you recognize that. It is particularly awkward because you are not only American companies, at least one of you and possibly all of you have partial ownerships in Chinese companies that are active, if not leading, in complying with this sort of thing. And so for a company to set its own standards and then have those standards be based upon the standards of a company that it is a part owner of is awkward as well. So you are seeing international commerce in many ways come together in a rather extraordinary set of ways and I just hope that your management thinks things through, as Congress is going to have to think it through.
We in the press sometimes what are called ombudsmen to look at what the press does and it is not inconceivable to me that corporations might think in that way as well.
Thank you very much, Mr. Chairman.
Mr. SMITH OF NEW JERSEY. Chairman Leach, thank you so very much.
Just as we conclude and go to panel three——
Mr. SHERMAN. Mr. Chairman, if I could just ask a question or two for the record?
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Mr. SMITH OF NEW JERSEY. Mr. Sherman.
Mr. SHERMAN. One of those and perhaps you could just get back to us soon is for your Chinese customers or your American customers, this is really a technical question, if they delete an e-mail, is it deleted? Or is it still in your files available for whatever judicial process proceeds?
This assumes, of course, that the other party to the e-mail obviously may have a copy of it or may have deleted it as well.
The final comment I'll make, if the Chairman will indulge me, is on the whole censorship and flow of information.
Every time I go to the arcade and I play Whack-A-Mole, the moles win because I whack one and two pop up and I would hope that his Congress and perhaps the technical talents in front of us here, that Congress would provide, whether it is to Falon Gong, whether it is to Google, whether it is to Yahoo!, whether it is to Cisco or whatever, contracts to figure out how to punch homes through these firewalls, how to make sure that the content pops up; even if it is blocked here, it comes out over there. And I am confident that with your technical backgrounds and capacities and with perhaps some congressional appropriations that every time China tries to suppress information in one way it will pop up in two other places.
I yield back.
Mr. SMITH OF NEW JERSEY. Mr. Payne?
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Mr. PAYNE. Let me just thank the Chairman once again for calling the hearing and for this panel, of course, we have another panel, for your attempt to clarify some of these issues.
I hope it is clear when you get back to your associates and they get back to their board members and their stakeholders that Members of Congress are pretty serious about this issue. Your job is the messenger. We tend to slay messengers from time to time; however, we are very serious about this. We are still the United States of America, we are still the country that is supposed to set the tone and we are still the country that expects our corporate leaders and our civic leaders and our political leaders to also set a tone that separates us from the rest of the world. We certainly will not condone cooperation with people who, as you have heard from the questions here, are very serious about trying to have some impact on what happens.
Now, we have a lot of companies that do business in China, not only yours, and we have the same kind of disdain for their behavior, too, because they go along to get along. On the one hand, we hear our business leaders applauding the tremendous economic leap in the PRC and how great they are doing business wise and then we have Secretary of Defense Rumsfeld come back and is grumbling about the fact that they are spending so much money on military equipment and stealth submarines and all kinds of offensive weapons that he contends may someday be used against us.
It becomes baffling sometimes to decide whether they are our great friends and we will change them or will they be our enemy. It really makes no sense. In some instances, we talk about how strong they are getting. If it were not for the U.S. and our tremendous of balance of trade deficit, they would not be in the position that they are in.
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Now, I am not saying it is bad or it is good, it is something that is difficult to explain. I expect that the message that this Committee and these two Committees that we have conveyed, at least a number of us who are very serious about this, is that business as usual is really not going to be the way to go and that you need some help perhaps from the U.S. Government. We in Congress intend to give some tools to help your companies to defy or at least challenge by virtue of our law. They do not want you to violate their laws; well, we do not want you to violate ours either. And so there is going to have to be some other way to look at how we deal with this. As I indicated, we are serious about it and I am sure that we will be looking forward to the responses that Members have asked for you to send back to the Committee.
Thank you, Mr. Chairman.
Mr. SMITH OF NEW JERSEY. As I conclude, let me just thank you and I think the record should make very clear, you all came voluntarily. There were no subpoenas issued and for that both Subcommittees are very grateful.
This will be a dialogue and an exchange that will continue. We will give you a copy of the bill that I will be introducing tomorrow, Mr. Payne is our principal co-sponsor, called the Global On-Line Freedom Act of 2006. Like any other bill, it begins its uphill climb beginning tomorrow morning. We would welcome your input and your thoughts on what you think is contained in this and we would ask all of the panelists and, of course, the Administration if they would do likewise.
Thank you for being here. We appreciate your participation. Thank you. Beginning first of all with Harry Wu, who was first arrested as a young student at the Beijing Geology College for speaking out against the Soviet invasion of Hungary, and criticizing the Chinese Communist Party.
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In 1960, he was sent to the Laogai, the Chinese Gulag, as a counter-revolutionary writer. He was finally released in 1979. Mr. Wu came to the United States in 1985. He was the author of Laogai—The Chinese Gulag, a theoretical explanation of the Laogai system in Communist China. He also wrote Bitter Winds, his autobiography, published in 1994; and Troublemaker, which was published in 1996. Mr. Wu is currently the Executive Director of the Laogai Research Foundation, and head of the China Information Center.
We will then hear Libby Liu, who was named the President of Radio Free Asia in September 2005 by the Broadcasting Board of Governors. Ms. Liu served previously as RFA's Vice President for Administration and Finance. Prior to joining Radio Free Asia, Ms. Liu served as Director of Administration and Strategic Planning at the Baltimore-based National Association for the Advancement of Colored People, or the NAACP.
We will then hear from Xiao Qiang, who is the Director of the China Internet Project at the Graduate School of Journalism, University of California at Berkeley. Mr. Qiang became a full-time human rights activist after the Tiananmen Square Massacre in 1989. Mr. Qiang was a former Executive Director of the New York-based NGO Human Rights in China. He was the recipient of the MacArthur Fellowship in 2001, and profiled in the book, Sole Purpose, 40 People Who Are Changing the World for the Better.
I note parenthetically that Mr. Qiang was at our hearing on December 18, 1996, and he had pointed out at the time that right after Tiananmen Square, that 2 days later he was on the Square doing fact-finding and gathering crucial information about what had really happened. He provided expert testimony at the hearing when Cao Gangchuan, the then-Defense Minister of China, said no one died at Tiananmen Square.
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We will then hear from Lucie Morillon, who joined the French National Consultative Commission of the Human Rights in Paris in 1999. In 2000, Ms. Morillon joined the International Press Freedom Organization, Reporters Without Borders, as an assistant researcher for the European Informer, USSR desk, at a time when Meloshiv Serbia was cracking down on journalists.
She transferred to Washington, DC, in 2004. She opened a representative office in the American Capital, where she supervises Reporters Without Borders USA, in partnership with the New York City office.
Finally, we have Sharon Hom, who is the Executive Director of Human Rights in China, and Professor of Law at the City University of New York, School of Law. Professor Hom was a Fulbright Scholar in China, and served on the U.S. China Committee of Legal Education Exchange with China.
Her books include co-authored inter-disciplinary text and workbook, Contracting Law, co-edited English-Chinese Lexicon of Women Law; and an edited volume, Chinese Women Traversing Diaspora: Memoirs, Essays, and Poetry.
If you all would not mind standing in order to take the oath, and if you would raise your right hand.
[Witnesses sworn.]
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Mr. SMITH OF NEW JERSEY. Let the record show that each of our witnesses answered in the affirmative. Mr. Wu, if you would proceed.
TESTIMONY OF MR. HARRY WU, PUBLISHER, CHINA INFORMATION CENTER
Mr. Wu. Thank you, Chairman, I think this is a very important, significant hearing on China issues today. I think it is common knowledge that the people of China are still living under a Communist Totalitarian Regime. I do not believe there is anyone who can honestly object to this statement.
So all these hearings, arguments, or statements have to be based on this issue. The issue that, until this moment, this is a Communist Totalitarian Regime.
As technology has developed and expanded, the Chinese community has correspondingly developed and expanded its knowledge and its abilities to control it. So when we are talking about these 100 million people on the Internet, we have to be aware that there are 35,000 so-called Internet police right now, working in the public security ministry. Their job is to control and monitor who are on the Web sites and in the chat rooms.
By the way, Chairman, can I submit my written statement?
Mr. SMITH OF NEW JERSEY. Without objection, your written statement, as well as the written statements of all of our witnesses and any attachments you would like to provide for the record will be made a part of the record.
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Mr. Wu. Because a lot of witnesses are going to be talking about censorship, and the Chinese dissidents who were captured by Chinese security. I just want to briefly go through my Power Point.
This is a police notice. It is very common everywhere in Chinese cafeterias. The notice says that all Internet users must register and use a Government-issued ID. If they do not have an ID, where do they go?
All this computer access in the cafeterias, they have received software from the local Government. That means the local government can right away, for security, find out who you are and what kind of Web site you are visiting. It is by law.
I think these four companies over here just testified that they knew about this. Then there is a number of people who do research, these so-called cyber-dissidents. This shows one sentence, 5 years in prison in 2003; and the other is cyber-dissident Du Daobin, who was sentenced to 4 years, just because of an article posted on a Web site. Shi Tao, I think everybody knows about that. Another one is Li Zhi, who got 2 years in jail.
So I think this kind of situation, these people, these companies, have a great deal of business in China. They are aware, but they just try to tell different stories. They say, our technology is helping the Chinese to improve communication. So that means we are helping people to fight for democracy and freedom.
We know that technology can be used by every side. It is not only used for democracy. It is also used by the government to control.
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Let me focus on one thing. Because most Americans in China are working for a legitimate company or institution. It is not too late to point out that Cisco is directly working for Chinese security.
For example, we have this brochure, this Chinese-language brochure from Beijing University. Chinese Leader Jiang Zemin was there. Prime Minister Zhu Rongji was there, and this university, this institution focused on one program, and this program was Chinese security talking about fingerprints.
So here, on page 11, PKU (Peking University), the police were right here. This said, MIS, for criminal investigation, large-scale fingerprint scanner; MIS for Social Security fingerprint verification system for access control and personal identification system for national security. China President Jiang Zemin, Prime Minister Zhu Rongji, and many other state officials visited the company and gave the product high praise. Many world-famous industry leaders, including Intel, Sun Microsystem, Cisco, Compact, HP, have built cooperative relations with this company. Beijing University, our company is there.
Now let me focus on this other issue. Because this is a kind of product that has a dual purpose. Unfortunately, Cisco—let me show you this brochure. This brochure was obtained in 2002 in Shanghai. There was an exhibition, and there were many companies. Most were American companies that were involved. Of course, Cisco was there.
I will show this. I have obtained this in the Chinese language. So you can see the first page, and on the second page, you can see that Cisco said, ''We can help you make your work more effective.'' The next one, it said, ''Enhancing the police force.'' Then, in the other one, Cisco gives you a case that in Qinghai Province, they already set up a kind of network for public security.
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Then I will give you another case from Yunnah Province. There was public security by Cisco to set up a whole province-wide surveillance system. I just listened to the gentlemen right here, just a couple of minutes ago. He said, well, we are doing something. For example, we helped the ambulance connect with the students. They are connected with the stations. Actually, it is right, but the words you used were wrong. It was not an ambulance. It was patrol car. Here is another photo you can see, a patrol car.
They helped the police in that province, from patrol car to patrol car, patrol car to the station, police station, to effectively work out.
Congressman Smith, you know that I always want to go back to China. But right now, I am very scared, because they have very effective systems to find out where I have been.
This fear is not only, today, in China. It has come over here. You just heard Mr. Li was beaten by someone here because he is the chief technician of the Yahoo!, of the Falun Gong. I think this is a very serious message given by the Chinese and given to the people over here. Terry Alberstein, Director of the Corporate Affairs of Cisco Systems, Asia Pacific, maintains that Cisco, just like today the representative here says, Cisco sells networking equipment to law enforcement agencies around the world. They insist that their business activities in China are therefore identical to those in other countries.
However, Terry said, we are specifically talking about China. There is no specific United States law that prohibits the export of crime control equipment to China.
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But here is the law. This law forbids Americans from exporting any equipment for crime control or detection; not for other countries, just for China. If Cisco convinces people by saying in their statement that Cisco does, however, comply with all American Government regulations, which prohibit the sale of our products to certain destinations or to certain users or to those who re-sell to prohibited users. We have not sold and do not sell our equipment to the countries listed on the U.S. Department of Treasury or SEC list of embargo nations; and we comply fully with all aspects of the Foreign Relations Authorization Act as passed by the Congress in the wake of the Tiananmen Square incident.
If Cisco tries to convince you, or convince the media, that they are not cooperating with Chinese security authorities, why not just tell the people what is your contract. I made my own investigation. These contracts are not only in Yunah or in Qinghai Province—even this Chinese report said that Cisco made an announcement in 2004 that they helped the Public Security Ministry to improve their Golden Shield Project. The Vice President, Jiang Shihua, of Cisco management, the Vice President in China said, we are very happy to work together with the Chinese public security in improving the Golden Shield program.
In China, in the public security system, the number one VOIP system, according to Chinese news, was established by Cisco.
Also, this program, this contract from Cisco, included training. We want to ask Cisco, who are these people in your training program. So far, we learned that all of them are Chinese police. It is not only offering the technology and software devices, but also training.
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If Cisco can publicly tell the people, saying we have one, two, maybe five, maybe ten contracts with the provincial security systems, and so far as I know, it is millions of dollars. One of them is $8 million in 3 years. Then they can convince the people by saying they are innocent; they do not work for the Chinese security and do not violate American law. Thank you.
By the way, there is a money manager group called Boston Common. Year after year, they intend to fight against the Cisco management. Because Boston Common represents 22 billion customers, and they disagree with Cisco's decision to work for Chinese security. I hope we can put Boston Common's statement as a reference in the Congressional Record, thank you.
[The prepared statement of Mr. Wu follows:)
PREPARED STATEMENT OF MR. HARRY WU, PUBLISHER, CHINA INFORMATION CENTER
First, I would like to thank Congressman Henry Hyde and Congressman Chris Smith for convening this hearing today on the important issue of Internet suppression in China. Thank you for your consistent support of the rights of the Chinese people and the work of organizations pushing for human rights in China.
In President Bush's speech in Kyoto during his recent trip to Asia, he urged China to take steps to promote freedom and democracy. What poses a challenge to freedom and democracy in China is not only the Beijing government, but also international companies that provide financial and technological assistance to the Beijing regime, allowing it to maintain its control.
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It is common knowledge that a communist regime such as China's maintains total control over all forms of media—television, radio, newspaper and the Internet. The Chinese Communist Party has its own Propaganda Department, which ensures that all media content is consistent with official political doctrine. As technology has developed and expanded, the Chinese government has correspondingly developed and expanded its knowledge and its abilities to control it. As an example of this, there are currently at least 35,000 so-called ''Internet police'' in the Public Security Ministry whose job it is to monitor and censor websites and chatrooms in China.
From diplomacy and trade to strategic alliances and multilateral treaties, the last decade saw increased interaction and cooperation between the West and China. The outlook for liberalization was promising, despite China's notorious record of human rights abuses. Many argued that this type of ''engagement'' would lead the Chinese to a more liberal, democratic society. Others speculated that totalitarian regimes would only choke the liberating powers of the Internet. Unfortunately, current evidence suggests the pessimists are right. Censorship of the Internet is increasing with the explicit help of high-tech multilateral corporations. Beijing is seizing this opportunity to squash dissent and spy on its population with unparalleled efficiency.
While the introduction of technology into a society can be a positive force for change, it is important to consider the fact that technology can be used by all sides, and can therefore also be used as a negative force. In the current debate over the actions of American IT companies in China, these companies have asserted that they have provided the same technology and equipment that they have provided to all other countries they do business with. They maintain that they are not responsible for the ways in which their customers use the technology that they sell, and that they do not alter it in any ways to serve the needs of a particular customer, such as China's communist regime. They also argue that they are providing a positive service for the Chinese people by giving them technology and enabling them to have access to the outside world. But we must remember that this technology is like a pistol that can be used by all sides. While it can be used by the Chinese people, it can just as easily be used by the Chinese government to oppress them.
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Information technology is often heralded as a tool to promote democracy, because it allows increased transparency and the liberalization of communication. But those living under authoritarian regimes cannot communicate with the world, or each other, freely—their right to privacy and free speech does not exist. China currently censors foreign and local media, and also suppresses dissent, but how far will China go in the name of ''social stability''? Sadly, China is undertaking a monumental effort to monitor and track its citizens.
A friend of mine recently tried to access some politically sensitive websites while at an Internet café in a remote, small city in Xinjiang Province. The police quickly showed up to arrest him. I don't know who supplied the technology enabling the police to track my friend's Internet surfing, but I am pretty sure that U.S. technology was involved. The PRC's Ministry of Public Security has been continually upgrading and expanding its $800 million ''Golden Shield'' project—a government-sponsored surveillance system that was begun in 1998. The Golden Shield's advanced communication network was supposedly aimed at improving police effectiveness and efficiency. However, China has also used the ''Golden Shield'' as a way of monitoring Chinese civilians. The project will help prolong Communist rule by denying China's people the right to information. In order to develop the ''Golden Shield,'' China has utilized the technologies of a number of foreign companies, such as Intel, Yahoo, Nortel, Cisco Systems, Motorola, and Sun Microsystems. The ''Golden Shield Project'' would not have been possible without the technology and equipment from these companies.
China has recently been clamping down hard on Internet cafés. Currently, everyone who wants to access the Internet at Internet cafés throughout China must register with their real names and present their identification card each time they come to surf the Net. This effectively prevents Internet users from even attempting to access any websites that the Chinese government deems inappropriate or politically sensitive. Government authorities throughout China have installed software in the computers in Internet cafés, enabling them to carry out comprehensive, long-term monitoring. This technological control software is capable of obtaining real-time information about Internet users, and can also keep a record of instances in which Internet users exceed the Internet curfew.
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While technology can be used to improve communications systems, it is clear that it can also be used for suppressive purposes. Today, the American IT companies that are present in China are working together with a totalitarian regime, that of the Chinese government. Therefore, despite the publicly-stated goals of these companies to provide Chinese people with greater information and access to the outside world, it is difficult for them to avoid working together with the immoral, corrupt Chinese regime.
Recently, there have been a number of cases in which Chinese ''cyber-dissidents'' have been sentenced to years in prison or placed under house arrest simply for sending e-mails or expressing their views online. China currently has the largest number of jailed Internet dissidents of any country in the world. From the following slides, we can learn about the cases of cyber-dissidents Huang Qi, Du Daobin, Shi Tao, and Liu Shui:
On May 9, 2003, Huang Qi, founder and editor of the Tianwang website, was sentenced to five years' imprisonment for ''subversion''.
Cyber-dissident Du Daobin was sentenced to four years of house arrest on June 11, 2004.
In April 2005, journalist Shi Tao was sentenced to 10 years in prison for ''divulging state secrets abroad''.
Cyber-dissident Liu Shui completed the two-year sentence of reeducation through labor which he received in 2004.
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We now know that Yahoo complied with Chinese authorities in two separate incidents that resulted in the imprisonment of people for their activities on the Internet. Last week, it was reported that Yahoo released data that led to the arrest of Li Zhi, an online writer who was sentenced to eight years in prison in 2003, after posting comments that criticized official corruption. This case is parallel to that of Shi Tao, who was sentenced to 10 years in prison.
Moral responsibility for Yahoo's collaboration in the imprisonment of Li and Shi cannot be shrugged off with a simple assertion that Yahoo had no choice but to cooperate with Chinese authorities. A Yahoo spokeswoman insisted that in its dealings with China, the company ''only responded with what we were legally compelled to provide, and nothing more''. She argued that the company did not know how Chinese authorities would use the information it provided. However, we must ask who is making the laws and regulations requiring Yahoo to give up information about its customers. We must ask what kind of a government they are dealing with, and who they are providing a ''pistol'' to. The answer is that their major business partner is the Chinese government.
I would like to mention another example, involving the Beijing PKU High-Tech Fingerprint Co., Ltd., which collaborated with Intel Co. to greatly improve the speed of system operations, breaking through the limit of 100,000 prints per second. The capacity of the fingerprint database that was created exceeds 5,000,000. This fingerprint identification system is a part of the Public Security Bureau's (PSB) ''Golden Shield Project'', and is just one example of how the project is used to monitor and control Chinese citizens.
Similarly, Cisco Systems cannot dismiss criticism of its ''Big Brother'' censorship activities in China by maintaining that China's use of its equipment is beyond its control. Cisco Systems recently publicly confirmed that it has done business with China's PSB, and that it also provides service and training to its customers, who in this case they know are police officials. Cisco Systems, unlike other IT companies, has signed contracts directly with Chinese public security authorities.
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Terry Alberstein, Director of Corporate Affairs for Cisco Systems—Asia Pacific, confirmed that Cisco does indeed sell networking and telecommunications equipment directly to Public Security and other law enforcement offices throughout China. According to Rconversation.com, the website of Rebecca MacKinnon, Alberstein said that Cisco sells to police around the world, and that it is not illegal for Cisco to do business with the Chinese police, because the equipment sold is not prohibited under the Foreign Relations Authorization Act. Mr. Alberstein reiterated that Cisco is doing nothing against U.S. law, and emphasized that Cisco does not tailor routers for the Chinese market and does not customize them for purposes of political censorship. According to Alberstein, ''The products that Cisco sells in China are the same products we sell in the U.S. We do not custom-tailor any product for any export market.'' Also, an e-mail from Cisco Systems' public relations department that was also posted on Rconversation.com states that ''Cisco Systems does not participate in the censorship of information by governments.''
I'm glad Cisco has publicly confirmed that it has done business with China's Public Security Bureau, and that it also provides service and training to its customers. While Mr. Alberstein asserts that Cisco has not violated American law through its business dealings with the Chinese police, this is not up to Mr. Alberstein to decide. The U.S. Congress has the authority to decide if any violations have been committed. Cisco's technology and equipment have without question made the job of Chinese police easier and more effective. Cisco has assisted Chinese security forces with their monitoring capabilities, and Mr. Alberstein lacks the authority to say that this does not constitute crime control, which would be in violation of U.S. law.
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Mr. Alberstein maintains that Cisco ''sells networking equipment to law enforcement agencies around the world'' and infers that its business activities in China are therefore identical to those in other countries. However, we are specifically talking about China, and there is a specific U.S. law that prohibits the export of crime control equipment to China. We should not believe the argument that Cisco's sales of high-tech equipment to China are as innocuous as such sales to some other countries, and we must remember that there is a country-specific law in the Tiananmen Sanctions contained in Section 902(a)(4) of the Foreign Relations Authorization Act for Fiscal Year 1990–1991 (Public Law 101–246).
We should now ask Cisco to make public the information about exactly how much business it has done with China's PSB. Every Cisco shareholder has a right to know about this information. Cisco should publicize its profits, the quantity and date of its sales and business dealings, and its contacts in China, as well as the specific types of software and technology that have been sold. After Cisco has truthfully revealed this information, Congress and the American people can decide whether or not Cisco has committed a violation of the law.
Unfortunately, Cisco's sales pitch has been quite successful. Through several telephone inquiries to local managers of Cisco Systems in China, it was confirmed that nearly all of China has been employing Cisco's surveillance technology in provincial, district and county police agencies. Anyone departing from the Party line is considered a threat to ''social stability.'' Cisco Systems' technology guarantees speech recognition, automated surveillance of telephone conversations, integration of biometric data, wireless Internet access to track individual users, video surveillance data from remote cameras back to a centralized surveillance point, etc. Indeed, the prospect of China's Golden Shield is unsettling for those for have worked so hard for a democratic China.
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American law prohibits the export of devices that are to be used for ''crime control'', but perhaps we need to reevaluate the definition of a ''crime control'' device. Should this law apply only to metal handcuffs, or might it also apply to electronic handcuffs? Chinese citizens who were jailed for simply expressing their views online or for sending e-mails might have a different view about this definition. Manufacturers of handcuffs aren't allowed to sell their products to China's police, but Cisco and other companies are selling the Chinese authorities much more useful technology. U.S. export laws also ban the export of dual-use technology, and we may need to look at how ''dual-use'' is interpreted. When companies work together with the public security authorities of an oppressive regime, should we be concerned that the technology being provided will be used toward an evil purpose, and not just for its original purpose? I believe we should.
Selling advanced technology to China not only has strategic implications, it also prevents dissent and discussion that would otherwise play a positive role in reforming China's autocratic government. The U.S. spends millions of dollars to spread democracy. Why are we allowing American IT companies to undermine our message? Continued sales of high-tech equipment will strengthen China's ability to suppress democratic voices, and further tighten its grip over the Chinese population.
[Note: Image(s) not available in this format. See PDF version of this file.]
Mr. SMITH OF NEW JERSEY. Thank you, without objection it is so ordered.
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Ms. Liu.
TESTIMONY OF MS. LIBBY LIU, PRESIDENT, RADIO FREE ASIA
Ms. LIU. I would like to thank the Subcommittees for inviting me here to testify today on China's Internet censorship, and RFA's experiences in trying to get news to the Chinese people via the Internet.
I would like to take this opportunity to brief you on how Radio Free Asia is fulfilling its congressionally mandated mission to act as a surrogate for indigenous media in China, and how we have been aggressively developing new ways to expand our audience in China in the Internet age.
The good news is, our news reaches people throughout China, and is picked up by every major media outlet all over the world, hundreds of times a year. But if you try to access RFA's Web sites in China, you will most often get a message that says, ''Page Not Found.''
If you search the word ''Uyghur'' on Google.com from within China, you will be taken not only to the official Chinese site, but to a site in the Uyghur language that explains the wonders of conversion from Islam.
If you type ''RFA'' in the search field of Google.CN, you will get a single result. It is a link to a request for application for the NIH Web site. Bill Shaw of Dina Web told me yesterday that RFA is censored in at least three ways. RFA.org is blocked. RFA's name is blocked, and all of our content is censored.
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RFA has aggressively covered Chinese cyber censorship and its aftershocks. We break and cover closures of online forums, discussion sites, Web sites and blogs. We break and cover a lot of news the Chinese Government censors out, including most recently the details of the Dongzhou Village shooting and the Taishi Village anti-corruption demonstration, despite an attempted Chinese media blackout.
These stories and many others reported by RFA demonstrate that despite dramatic improvements in their economy the Chinese people pay a heavy price for exchanging ideas. China is the world's leading jailer of journalists and cyber dissidents. Despite the fact that city dwellers can now eat pizza from Pizza Hut and lattes from Starbucks, China remains what Nathan Sharansky called a ''fear society.''
Radio Free Asia ensures a free flow of information into this free society, so the people of China can learn what is happening in their own country, including what their government does not want them to know.
RFA's Mandarin, Cantonese, Uyghur, and Tibetan Web sites have a unique connection to the people who live under Chinese censorship. As you know, when Chinese readers go online, they do so under surveillance and often at great risk to themselves and their families. Rarely do they get a full picture. Many sites are blacked out, whether the users know it or not. The pages they visit are recorded, the contents filtered, and their browsing patterns scrutinized. The situation is not about to improve. China continues to invest in the most advanced technologies for blocking unwanted material.
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The scope of China's Internet surveillance is daunting. Tens of thousands of Web police are patrolling cyberspace. Beijing has devoted enormous resources directed toward Internet and radio censorship.
Conventional wisdom has long held that the open nature of the World Wide Web and its free access to information would bring democracy to China. Today, that view looks optimistic. The question is not whether the Internet is going to change China; but rather, how much we are going to allow China to change the Internet?
As a news organization, Radio Free Asia operates in a highly unusual environment. Radio Free Asia must not only distribute that hard-to-get Chinese news, but we must teach our readers how to outsmart Chinese censors. We know we are catering to people who may not be able to read the pages, or read the pages using proxy servers, or encrypted transmissions. So our radio broadcasts have to teach our target audiences how to do that. It is a constant game of cat and mouse, and the one cost is the fear of getting caught.
On the Web, we offer live streaming of our broadcast shows. With the help of the BBG engineering, we are constantly looking for ways to evade Chinese censors and staying at the cutting edge of technology.
In October, we started offering our programs via Podcast, to multiply the number of distribution channels to make our content portable. We saw our hits spike after the Podcast was introduced.
To reach our audiences, RFA partners with a courageous and growing online community of technical experts inside and outside China. They help us get our newsletters out to the people who need them. With their help, we have created a giant network of human proxies. This network is so informal that it has no shape. But it is very much alive.
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Message boards, e-mail, blogs, and instant messages pick up where the government has blocked us. Friends and family in third countries post our articles on their own Web sites, and they pass on those Web addresses.
RFA news travels fast and well by faxes, letters, phone, and word of mouth. We know that when it matters most, our news gets to where it needs to go.
What we are now witnessing is a profound change in China. That change is occurring not only in the economic and technological sectors, but, even more importantly, in the psychology of the Chinese people.
Thanks in part to the Internet, a growing number of socially aware Chinese have become loyal listeners of foreign broadcasters. Through bringing news and information to the Chinese people that they cannot otherwise access, RFA aims to promote Internet freedom by impressing on the audience that human rights include digital rights and that the freedom of expression is in real time.
In the actual townhall or on a virtual town square it is a fundamental right as enshrined in Article 19 of the Universal Declaration of Human Rights.
In conclusion, I would like to reiterate that Radio Free Asia is ably fulfilling its mission, providing journalism of the highest standard to Asian populations whose governments aim to restrict their access to full, balanced and objective news.
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RFA further is taking maximum advantage of Web technology to deliver our reporting in every available means. We use RSS feeds. We use podcasting. We welcome any improvements in the censorship situation that this Committee can offer.
Every day is a new race for technological advantages, with speeds too fast to handicap. But we have had some notable triumphs.
Nearly a year ago, thanks in part to pressure from this Congress and this Committee, Uyghur activist, Rebiya Kadeer, was released from jail and exiled from China. On May 17, 2005, she was reunited with her husband here in the United States.
RFA recorded that moment in words and photos, which we quickly posted on our Uyghur- and English-language Web sites. Barely 24 hours later, the children she left behind had seen RFA's coverage and immediately called their brothers and sisters in the U.S. to say, ''We saw our parents kiss.''
In a Chinese autonomous region with stringent Internet controls, the simple digital photo of Rebiya Kadeer and her husband, locked in an embrace, published online from half a world away, was a triumph.
Thank you for your attention. I would be happy to answer any questions you might have.
[The prepared statement of Ms. Liu follows:]
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PREPARED STATEMENT OF MS. LIBBY LIU, PRESIDENT, RADIO FREE ASIA
Mr. Chairman, thank you for inviting me to testify today on the important topic of China's Internet censorship. I would like to take this opportunity to brief you on how Radio Free Asia is fulfilling its congressionally-mandated mission to act as a surrogate for indigenous free media in China, how it has been aggressively developing new ways to expand its audience in China in this Internet age, and why its mission today is, if anything, even more important than when our station began broadcasting a decade ago.
Radio Free Asia first went on the air in September 1996. Since then the Internet has witnessed explosive growth in China, claiming more than 110 million users by official Chinese numbers. Radio Free Asia has, in the short span of 10 years, established itself as an objective source of information for the people of China, many of whom rely upon us daily for news of the latest events and trends in their own country.
Radio Free Asia has earned the trust of its Chinese listeners and has established a reputation for being a credible source and effective disseminator of information. When domestic Chinese media fail to inform, Radio Free Asia is there to fill in the gap. In the words of a Sichuan listener who telephoned RFA Mandarin service's ''Listener Hotline'': ''Radio Free Asia is a beacon of hope for the Chinese people.'' This has become particularly vital in spreading lightning-fast news concerning cyber-activism and cyber-censorship.
I. RFA is Aggressively Covering the News of Cyber-Censorship
Radio Free Asia's recent coverage of Chinese cyber-censorship and its aftershocks includes the following:
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1. In September 2005, Radio Free Asia was first to report the closure of the Yannan Forum, an online discussion site that had reported the controversy over a recall campaign by villagers in Taishi in Guangdong province of their elected village chief. Before the Web closing, Yannan received a warning from the government that no news about Taishi was to be posted on this site. News about Taishi was referred to as ''harmful information.''
2. In October 2005, RFA reported that two Web sites, Ehoron and Monhgal, in Inner Mongolia, were closed. These sites served primarily as a discussion platform for Mongolian students. When the site managers promised not to post any information on Mongolian separatism on the site, they were allowed to reopen in December 2005.
3. Beginning in June 2005 and continuing throughout January 2006, RFA has been reporting on the highly popular Yulun Net Web site and its blogs' periodic closures. The Web master, Lee Xinde, told RFA that the most recently closed blog, Dahe, had more than 100,000 page views since September and was the first to report on the alleged bribery of the vice mayor of Jining in Shanxi province. He also told RFA that he is instructed to close down specific blogs by the authorities.
4. On December 6, 2005, Radio Free Asia was first to report the news that protesters were being shot by paramilitary police in Dongzhou village, near the city of Shanwei, in Guangdong province. Villagers there had been protesting the construction of a power plant on land that had been expropriated by local officials. According to witnesses interviewed by Radio Free Asia, more than a dozen villagers were killed, though the Chinese government to this day insists that only three persons died as a result of the crackdown. Radio Free Asia was able to break the news of these shootings because an eyewitness had called one of our bureaus, desperately asking for help. His exact words were: ''Please tell the world what they are doing to us!'' Despite a Chinese state media blackout of these events, RFA.org was able to provide continuous coverage and reach its audience through small proxy Web servers.
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5. Also in December 2005, RFA.org published a video account of events in Taishi village in southern China, where villagers had been petitioning since July for the recall of their elected village chief over charges of corruption. Within days, a man turned up in a local café providing vivid details of the footage. ''How did you get to see that video?'' asked one of the patrons. ''I access the RFA Web site via proxy servers,'' the man answered. He invited a group to his home where, behind closed doors, they all gathered in front of his computer screen to watch the video. On that day, many people in China battling government oppression knew they were not alone
6. On January 2, 2006, RFA reported that Shenzhen in Guangdong province was the first city to use a new Web police warning system in China. When Web users log onto the Internet in Shenzhen and visit certain discussion forums, they see a pop-up figure of two police officers. This figure leads to a warning page that instructs Internet users to comply with the law. RFA reported that users felt intimidated by the pop-up and feared that it acted as a surveillance tool.
7. And just a few weeks ago, on January 24th, Radio Free Asia was first to confirm the government's suspension of Bing Dian (''Freezing Point''), a popular and influential weekly supplement to China Youth Daily. In our interview, Li Datong, the supplement's chief editor, told us that simultaneously with the paper's closure, he was notified that his personal blog had been removed from a popular Web site, on orders ''from higher-up.'' Radio Free Asia's initial report on this crackdown on political expression was soon picked up by more than 30 major media outlets worldwide.
These stories, and many others reported by RFA, demonstrate that despite dramatic improvements in their economy, the Chinese people often pay a heavy price for exchanging ideas. According to Reporters without Borders, China is the world's leading jailer of journalists and cyber-dissidents. Despite the fact that its city dwellers can now sample pizza from Pizza Hut and savor lattes from Starbucks, China remains what former Soviet dissident Natan Sharansky has called a ''fear society.'' As Sharansky explains in The Case for Democracy, ''If a person can walk into the middle of the town square and express his or her views without fear of arrest, imprisonment, or physical harm, then that person is living in a free society, not a fear society. If a person cannot do so, that person is living in a fear society.'' By Sharansky's standard, or by any reasonable standard, China today is a ''fear society.''
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Radio Free Asia has helped ensure a free flow of information into this ''fear society'' so that its people can learn what is happening in their country—including, importantly, what it is that their government does not want them to know.
Beyond the benefits to the Chinese people of having a source of objective news and a forum for communicating freely with one another, the potential benefits to the United States are considerable as well. The Rising China—both economic and military—has brought home to us the importance of providing this closed society accurate, unbiased news and information beyond what its leaders allows its people to have.
Authoritarian governments are heavy handed in controlling access to information. More complete information, and greater exposure to competing political viewpoints, help ensure that populations in closed societies are more likely to approach the outside world, including the United States, with an open mind.
Even where citizens of foreign countries are managing to obtain greater access to news from third parties, these sources are far from being substitutes for the work of entities such as Radio Free Asia. On this point, the Chinese government certainly seems to agree. Why else are they so aggressively trying to block access by the Chinese people to our Web site? And why do they devote so much effort and money to jamming our radio broadcasts?
II. RFA is Aggressively Expanding Its Audience in the Age of the Internet
RFA's Mandarin, Cantonese, Uyghur, and Tibetan Web sites have a unique connection to the people who live under Chinese censorship. They match rigorous reporting with lively interactive exchanges with their readers via email and message boards. Through cyberspace, as much as through the broadcast airwaves, RFA bears witness to the hope and despair of those who seek to exercise their right to free expression in China.
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Audience research figures from Intermedia, an independent research firm, show there may be as many as 175 million adults in China accessing the Internet on at least a weekly basis, nearly as many as in Japan and South Korea put together. But the Web carries its own dangers. When Chinese readers go online, they do so under surveillance and often at great risk to themselves and their families. Rarely do they get a full picture; many sites are blacked out whether the users know it or not. The pages they visit are recorded, the content filtered, and their browsing patterns closely scrutinized. And the situation is not about to improve, as China continues to invest in the most advanced technologies for blocking unwanted material from blogs, emails, and Web sites.
The scope of China's Internet surveillance is daunting. Reliable figures are scarce, but reports speak of tens of thousands of Web police patrolling cyberspace, with 86 journalists or Internet users in Chinese jails. Beijing has enormous resources directed towards Internet censorship.
Conventional wisdom has long held that the open nature of the World Wide Web and its free, accessible brew of cultures would ''bring democracy to China.'' Today that view looks optimistic indeed. The question is not whether the Internet is going to change China, but rather how much China is going to change the Internet.
RFA bears the brunt of Beijing's censorship. If RFA is stymied, its Chinese readers are deprived of news that is immediately relevant to their daily lives. They lose a chance for the crucial input that can help them make informed decisions for themselves and their families and form opinions based on accurate and balanced information.
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As a news organization, RFA operates in a highly unusual environment and maintains a unique relationship with its Web users. RFA must not only distribute its news, but must help its readers to outsmart the censors. We know we are catering to people who might have to read the pages using proxy servers or via encrypted transmission services.
We use all available avenues to reach out to new readers and strive to stay at the cutting edge of technological innovation. Our radio broadcasts educate our target audience on how to use proxy servers and other gateways. On the Web, we offer live streaming of our broadcast shows. We are constantly looking for ways to evade the Chinese censors. In October we started offering our news programs via podcast to multiply the number of distribution channels and make the content ever more portable.
The Internet anti-censorship program of the Broadcasting Board of Governors provides support for our efforts to break through the Chinese blockage of our Internet content. The BBG's Office of Information Systems and Technology works with industry and government consultant experts to find ways to keep information flowing to China through Internet portals. The emails are distributed by BBG to users in China, which in turn allow those users the ability to access RFA, VOA or other blocked sites on the worldwide web through the proxy sites identified in the emails. The BBG continues to monitor and utilize the latest technology to get through the filtering mechanisms of the Chinese Government.
By all evidence RFA Web users are not easily deterred. They share their fears openly about being observed and even threatened by the Chinese government. One of our Tibetan readers wrote on a message board last month how he drew a menacing reaction when he posted ''10 famous sayings for 2005 by Chinese leaders.'' ''When I checked back,'' he said, ''I received a threat from what I believe is a Chinese user. This showed how little China has changed over the last 50 years.'' But others wouldn't let him get discouraged. ''Don't be intimidated,'' answered one of his message board buddies. ''We are practicing free speech. Whoever wants to intimidate those who speak out will be condemned and lose the moral high ground.''
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RFA is also partnering with a courageous and growing online community of technical experts inside and outside China who help us get our newsletters out to the people who need them. With their help, we are creating a widening network of human proxies, so informal that it has no visible shape but is very much alive. Message boards, emails, blogs and instant messages pick up where the government has cut us off. Friends and family based in third countries post our articles on their own Web sites and then pass on the Web address. RFA news travels fast and well by fax, letters, phone, and word of mouth. We know that when it matters most, our information gets to its destination.
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