Tech World Sets Sights On China

The specter of state censorship and proliferation of software piracy is no reason for technology companies not to do business in China, Bill Gates said Friday.

As technology develops and Chinese innovations multiply, those problems will gradually dissipate, the Microsoft Corp. chairman and co-founder said.

"I think (the Internet) is contributing to Chinese political engagement ... access to the outside world is preventing more censorship," Gates said, referring to China's restrictions on politically sensitive internet Web sites.

Microsoft, Google Inc. and Yahoo! Inc. have been criticized for acquiescing to Chinese government demands to block access to certain sites.

Most recently, in order to obtain a slice of the potentially lucrative Chinese market, Google has agreed to omit Web content that China's government finds objectionable. Google will base its censorship decisions on guidance provided by government officials, a move critics contend suppresses free speech in the country.

"This is something of an exception for Google, which has stood for free and open communication, a company whose motto is 'Do No Evil'," CBSNews.com technology analyst Larry Magid notes.

"I'm not saying Google is being evil, but clearly this is a bit of a contradiction," Magid says.

Google's decision rankled Reporters Without Borders, a media watchdog group that has sharply criticized Internet companies for submitting to China's censorship regime.

"This is a real shame," said Julien Pain, head of Reporters Without Borders' Internet desk. "When a search engine collaborates with the government like this, it makes it much easier for the Chinese government to control what is being said on the Internet."

Magid

"The government should not use private companies' data as its research library," Jim Harper, director of information policy studies at the Cato Institute and Privacilla.org editor told CBSNews.com. "When there are specific suspects or issues in a case, warrants and subpoenas should be used to get information, but not for purposes like these."

For his part, Gates maintains that freedom of information is available in China, despite the blocked sites.

"I do think information flow is happening in China," he said, saying that even by existing there contributions to a national dialogue have taken place. "There's no doubt in my mind that's been a huge plus."

Magid agrees. "We live in a global information society and even the Great Wall of China is no match for the Internet," he says. But, "the question U.S. tech companies have to answer is whether business interests combined with the possible positive effect they might have on openness outweigh the risk of being seen collaborating with an oppressive regime."

Software piracy is a problem that will likely be solved over time, because as Chinese-made technology evolves, the country's respect for intellectual property rights will improve, he added.

"We are always upset that they aren't paying us for our products, but we're not going to pick up and go home," Gates said.