The Georgia Legislature stood up to China. Can America’s companies say the same?

April 19, 2022 6:39 pm

Guest columnist Paul Rosenzweig says Georgia’s proposal to prohibit China-owned or China-operated companies from bidding on state contracts should be expanded to include scrutiny of Microsoft and other large firms with big business interests in the authoritarian country. Microsoft founder Bill Gates (L) talks with Alibaba Chairman Jack Ma (R) bfore duirng the 2018 Hongqiao International Economic and Trade Forum in the China International Import Expo. Lintao Zhang/Getty Images

Earlier in the year, legislators in Georgia introduced and passed a bill that would prohibit companies owned or operated by China from bidding or submitting proposals for state contracts. While important as a proposed policy and a larger political statement, these efforts can benefit from sharpened focus. There is much more to this story than Chinese hegemony: it’s the story of American corporate complicity.

As the world saw during the “Burner Phone Olympics” this year, China’s vision for the future rests on state control of everyone and everything in its growing sphere of influence. And yet American corporations sponsored the games and furthered China’s influence globally in exchange for access to its massive economic market. These are companies with names familiar to all Georgians, like GE, Apple, Microsoft, and Intel. In one way or another, they all advance China’s progress toward its goal of total control.

For example, earlier this year, Apple hit its highest ever market share in the Chinese market, pushing its 2021 earnings up roughly 90% over the previous year. Apple’s user data is now stored on servers in China. And, since 2017, more than 55,000 apps have been blocked by Apple from sale in their Chinese app store.

And even though Amazon has ended its domestic Chinese e-commerce business, its cloud-based system AWS continues to grow, recently landing ByteDance—developer of TikTok—as a major client. Perhaps because of these relationships, Amazon was forced by the Chinese government to take down bad reviews of President Xi’s book (a collection of speeches and writings) under threat of retaliation.

Or consider Microsoft’s partnership with China. Its aggressive expansion in the country for the past few decades began in the 1990s when the company opened a research center in China, donated software, and formed close working partnerships with the communist government. Working hand-in-hand with the Chinese government over the years ensured Microsoft had access to the vast China market and an ally in reducing software piracy in the region.

Microsoft now operates a heavily censored version of its Bing search engine in China that removes content flagged by the Communist Party. Microsoft-owned LinkedIn blocked or censored U.S. journalists in China and censored the profiles or posts of multiple academics, journalists and political staffers. In fact, China’s censorship has spilled outside its borders: Bing was caught recently blocking images in the United States of the heroic “Tank Man” on the anniversary of the Tiananmen Square Massacre. According to former employees, Chinese authorities hacked into more than a thousand Hotmail email accounts, targeting international leaders of China’s Tibetan and Uyghur minorities in particular—but Microsoft decided not to inform the victims, allowing hackers to continue their campaign. 

That strategy has paid off.

The company has signed more than 100,000 enterprise customers in China, including government entities. In 2018, the company touted its “three-digit growth for nearly four consecutive years” in China. Today, Microsoft has six data centers in China and has committed to building four more. But access to China’s market has come at a high cost.

Even as they abandon American values abroad, companies like Microsoft, Apple, and Amazon aggressively courts state governments and our federal government. In Georgia, Microsoft alone reportedly received millions of dollars in tax breaks to build data centers and office space.

These massive technology companies are just some of the egregious examples of many other American companies that operate this way, supporting democratic values at home while enabling China and other autocracies abroad. Straddling the two preeminent – and opposing – world powers illustrates the challenges of today’s multinational economy. Corporations can’t be in China unless they accept the limits that China imposes. To gain access to the Chinese market, many American companies develop and sell products in partnership with Chinese companies or to Chinese government agencies – and accept the reality that their technology may be used for authoritarian purposes.

Georgia’s proposal to prohibit China-owned or China-operated companies from bidding or submitting proposals for state contracts only scratches the surface of what needs to be done. To continue upholding American values around freedom and human rights, Georgia needs to investigate how and where it does business with U.S. companies that partner with the authoritarian Chinese government in blatant ways.

Our stories may be republished online or in print under Creative Commons license CC BY-NC-ND 4.0. We ask that you edit only for style or to shorten, provide proper attribution and link to our web site. Please see our republishing guidelines for use of photos and graphics.

Paul Rosenzweig
Paul Rosenzweig

Paul Rosenzweig is the former Deputy Assistant Secretary for Policy at the Department of Homeland Security. He currently is the Principal at Red Branch Consulting. He has clients with interests related to technology and Chinese infrastructure, including Google.