Playing By China's Rules

Big U.S. technology companies like Google and Microsoft see China as a vast market ready to be tapped. But as CBS News correspondent Barry Petersen reports, doing business in China means doing business China's way ... and it's not the way most Americans are used to.

Michael Anti is one of millions of young Chinese who love the Internet. Like many Americans, he even had his own blog, on Microsoft's MSN network. But when he angered government censors by criticizing a local newspaper, his blog disappeared.

"I think it's a disaster, because Microsoft shut down my blog," Anti says. "I think the world changed."

Microsoft isn't the only company with a separate set of rules for China.

Google, another staple of computer users worldwide, has a new site for Chinese users — one that shows what a difference a difference a country can make … the country where you log on, that is.

At CBS News' office in Tokyo, the Internet is uncensored. Type in "Tiananmen Square" and up come the links. When you click on them, there's information about the famous 1989 uprising.

Not so at the network's office in Beijing. In our China office, the same search on Google says, "This page is not available."

Chinese computer users see a little cartoon figure that reminds them China has 30,000 Internet police monitoring the Web — sometimes with help from American companies.

Yahoo, another staple of the Web, is accused of giving authorities files and e-mails that resulted in prosecutions. Journalist Shi Tao got a 10-year sentence for passing along information by using Yahoo e-mail.

The word has spread among Internet users.

"If I use Yahoo," says Anti, "it's very dangerous for me because of the case of what happened with Yahoo."

David Wolf, a media specialist in China, has dealt with the Chinese government for years. He says companies that want to do business in China know they must abide by an unspoken set of rules.

"If you come to do business in China," he says, "you're implicitly saying, 'yes we will do business by your laws and your rules.' "

But why would big companies such as Microsoft and Google acquiesce to rules that would be draconian almost everywhere else in the world? Wolf says it's simple: "Essentially, these companies at this point need China more than China needs them."

Many Chinese expected these companies to represent not just American technology, but American values as well. To say they're disappointed is an understatement.

Anti thought that companies like Microsoft, Google and Yahoo represented freedom and democracy. Now, he says, "it's just business."

It's business the American companies want, so they'll continue to play by China's authoritarian rules.