Tech China Ties Coming Under Scrutiny

Sen. Richard Durbin, D-Ill., on "Face the Nation," Jan. 24, 2010. CBS

A top Senate Democrat is asking 30 leading technology, Internet and communications companies to provide detailed descriptions of their operations and human rights practices in China.

The companies include Apple Inc., Facebook, Twitter, AT&T Inc., Amazon.com Inc. and eBay Inc.

Senate Democratic Whip Dick Durbin of Illinois sent letters to the companies on Tuesday seeking information about their business in China and their plans for protecting human rights, free speech and privacy there.

Durbin's letter comes nearly three weeks after Google Inc. said it would stop censoring search results in China and threatened to pull out of the country altogether after uncovering a hacking attack emanating from China and attempts to snoop on dissidents.

Durbin said he is gathering information about the conduct of other big technology companies to prepare for a hearing on Google's actions in China. The hearing will also examine the Global Network Initiative, a voluntary code of conduct for Internet and communications companies that do business in countries that restrict free speech and human rights.
AT&T and Facebook said they would respond to Durbin's letter by the Feb. 19 deadline.

Apple said it had no comment. Amazon, eBay, Twitter and Verizon did not immediately respond to requests for comment.

This latest development takes place against a background of heightened tensions between China and the United States. China is pledging to retaliate against the U.S. over arms sales to Taiwan and warning of further damage to ties if President Barack Obama meets the Dalai Lama.

There's likely to be even more turbulence ahead: Trade friction, currency rate woes and allegations of cyber-spying are already roiling relations. The rhetoric also is sharpening in a disagreement over new sanctions against Iran, with Beijing refusing U.S. calls to push Tehran harder to cooperate with nuclear inspectors.

Yet the sheer number and variety of current disputes also reflects a newly combative approach by Beijing, emboldened by its $2.4 trillion in foreign holdings - about $800 billion of which is invested in U.S. Treasury securities - and relative success handling the impact of the global financial crisis.

A tough line is essential for the communist leadership that places a premium on being deemed by the deeply nationalist public to be "tough enough to defend China in a dangerous world," said John Garver, an expert on Chinese foreign policy at Georgia Tech.

Since the 2008 financial crisis, Beijing has concluded that the world's developed democracies "are badly wounded and therefore a healthy and growing China can now impose its will all over the world," said Edward Friedman, a China specialist at the University of Wisconsin, Madison.

"It therefore has become more assertive and uncompromising and self-confident, such that its actions seem arrogant to many," Friedman said. Washington is looking to Beijing to help finance its stimulus spending by continuing to recycle its trade surpluses into buying Treasury securities and other government debt. While China has reduced such purchases as a hedge, they remain a force keeping U.S. interest rates low and the sluggish economy moving.

"The fact that Beijing is Washington's banker is not lost on the Chinese government," said Oxford University China scholar Steve Tsang. Tensions have also been raised in recent weeks over U.S. comments on Internet freedom and a dispute between the Chinese government and Google Inc., which said it might pull out of China over censorship and cyber attacks on dissidents originating from within the country. Google says it's no longer willing to acquiesce to the Chinese government's demands for censored search results, yet it still wants access to the country's engineering talent and steadily growing online advertising and mobile phone markets.

For their part, Chinese leaders are determined to control the flow of information, and state media has portrayed Google's complaints as part of a U.S. government-sponsored campaign of "information imperialism."
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