After a China-based January 2010 attack on their systems (and other large US-Based corporations), Google’s four-year experiment with Google.cn may be over. But as the details of the attack come under further review, there seems to be more at stake. What does this attack mean for the future of China’s increasing importance on the world stage? Does China’s need for information control trump their ambitions as a leader in world trade and technology? I’m little more than an armchair hobbyist in geopolitics, but China’s quick rise to economic superpower has been intriguing to me since I started following Beijing’s position on the macro-economic circuit about a decade ago.

In the last ten years, China has made across-the board growth at breakneck speeds look easy. Cheap manufacturing and increasing urbanization provided plenty of opportunities for outsiders to take advantage of the market. As a result, China’s direct foreign investment (DFI) was operating at impressive levels. Growth was perpetual, surpluses were burgeoning, and life was good.

After 2008, that began to change. While China itself was well-protected from the world’s economic slump (using its aforementioned surplus to supercharge the slowing economy,) its foreign investors weren’t as energized. DFI was slumping.

Enter, Google. In 2006 Google’s operations in China began under Google.cn. The world’s most visited website took a lot of criticism that year, namely due to their cooperative compliance with China’s censorship laws. Google’s defense was that offering a restricted option was better than no option at all. In their own recent words from the official Google Blog:

“We launched Google.cn in January 2006 in the belief that the benefits of increased access to information for people in China and a more open Internet outweighed our discomfort in agreeing to censor some results.”

Google stood its ground for four years, attempting to balance China’s social limitations with their oft-repeated motto: “don’t be evil”. Even with China’s own Baidu.cn leading their domestic search engine market with a share roughly doubling Google’s (2nd quarter, 2009), the American company’s four-year gains were impressive.

The impressive part was that a corporation dealing predominately in free and accessible information was able to do business inside a legal framework which levied intense prohibitions on Google’s most quantifiable good.

Despite these gains, Google’s tone changed immediately following a “highly sophisticated and targeted attack on [their] corporate infrastructure originating from China” in January 2010. (Google wasn’t the only victim; other major corporations in finance, technology, and media were hit.)

China’s reaction was immediately defensive and otherwise silent. Google later responded by declaring that they’d no longer be willing to comply with China’s SERP^(defined) restrictions, even if that meant being ousted from the country. While Google.cn is still open for the time being, this may not last long, barring an extremely unlikely move by the Chinese Government to allow Google.cn to provide unfettered SERPs to its users.

As this issue went to press, the New York Times published an article implicating two schools in the attacks, Jiaotong University in Beijing, and the Lanxiang Vocational School in Shandong. Following this, a foreign affairs spokesman for China denied government involvement and called the accusations irresponsible. As yet, though, no more than this cursory denial has taken place.

China takes internet security seriously. If Chinese systems were compromised and used by outsiders for diplomatic sabotage, wouldn’t the state want to catch the offenders? If Mainland Chinese IPs were wrongly implicated, wouldn’t the solution in best diplomatic interest be to compare data with trade allies and the major foreign investors the attack directly affected?

When it comes to information technology, China’s inflexibility and secrecy represents a digital type of isolationism. China may be at a crossroads. If a corporation with the stature of Google decides that the nation is too risky and culturally incompatible to do business with, how many other foreign tech and information organizations will do the same?

By the numbers alone, China’s ability to be a world player is obvious. But does China want to be a world player? If so, can the country afford to maintain its policy of rigid information control while maintaining good diplomatic standing?

Almost a decade ago, I was already convinced that China was the next world superpower. It was exciting, even as an American outsider, to watch one of our world’s oldest and most rapidly modernizing cultures rising to a position of global leadership.

If China is ever to hold that position of leadship in global communication, it’s important for their allies to see cooperation, and dually important for their investors to feel secure. Preventing a wave of digitally inflicted sinophobia is important to China’s future.