Do China, NSA Pose a Global Risk to the Internet?

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Jan. 23 (Bloomberg) -- Gordon Chang, author of “The Coming Collapse of China” and Bloomberg News’ Jordan Robertson discuss the global risks that the Chinese government and NSA pose to the internet on Bloomberg Television’s “Bloomberg West.”

With jordan.

You mentioned some upcoming challenges at baidu and this company benefited from the chinese government control on the internet, companies like google leaving the country because they don't want to deal with censorship issues that come with operating in china.

Tell us more about these potential challenges coming for baidu down the road?

We have to remember baidu was helped because the chinese government undermined google which was the dominant search engine and today google shares have fallen by a half or so and baidu is up.

The problem is people's daily, the flagship publication of the communist party has been hinting about getting into the search market.

I think its plans are on hold but if it does ever go forward, baidu will be at risk because bay shing will do to baidu to what they did to google before and that's a real risk for baidu.

How active is the chinese central government in planning the businesses or helping to grow the businesses that are in china?

And how could today's events, the events in the last 24 hours, change that?

Basically in the chinese central government, they've been very active in planning the economy full stop.

Clearly it has tried to make sure homegrown competitors will be able to develop sufficiently.

Planning the economy is one thing, right?

Every central government does that.

Planning the success of specific businesses with specific technology is a whole different thing.

And they certainly do that because you see when foreign companies come into a market, they become too powerful, one way or another, they're attacked, especially we saw this with the pharmaceuticals, with tetra pack in packages and a number of other companies in the last six or seven months and that's really been to help local competitors.

This is very much a part of what the chinese central government does.

A lot of other governments do it as well but china is much more effective at doing this than other governments.

On that idea of internet freedom, we in silicon valley think -- are very idealistic about the need for internet freedom everywhere.

Almost everybody i talked to who is an expert on china says look, the internet in china isn't going to become more open or liberal any time soon.

They're not going to reverse their policies.

In fact, it looks like it's only getting worse.

We hear a lot here in silicon valley about the need of technology to expand free expression and expand freedom.

We hear it from companies like facebook and google and a pretty self-serving argument and what is a mask for what is a tremendously profitable business even if it's incremental improvements we see in china from pressures that arise from things like outages, whether it's pressure from businesses or consumers, those are incremental changes that some point in the future might lead to -- to gordon's point the notion of freedom will prevail has been the central theme of u.s. policy towards china over the course of the last 80 years.

So the notion it will prevail, we're about three or four generations into that and don't know the internet is making it faster.

The chinese government is certainly trying to keep it from happening.

When i lived in china and covered china, i had this conversation with so many different people and nobody is optimistic.

They say that this could take decades if this ever happens.

That's really a drag.

It is.

Let me ask, jordan, in terms of the way the technology works, could the n.s.a.'s involvement in -- deep involvement in all aspects of internet traffic pose similar risks?

Or if not, why?

Any time you central control anything this risk occurs.

The n.s.a., their big strategy is to attack the nodes where communication is centralized so the channels and the cables where communications flow.

So they insert themselves at kind of the key points where our internet traffic goes.

So potentially if something goes wrong in one of those operations, we could see damage to the global internet.

It's a pretty wonky, obscure topic but that's where the n.s.a. really lives.

We like wonky and obscure.

What you're saying essentially is the n.s.a.'s approach is to be at every intersection.

Every important intersection.

And chinese approach is to be on every street?

They essentially want to be in the same place.

The n.s.a. would love to be inside the chinese firewall at the place this error occurred and they may well be.

The n.s.a. is kind of the equivalent we have in the u.s., it's not a centralized system of control but these are the centralized systems where all internet traffic travels from.

Is it possible the n.s.a. could have made a mistake like this?

In the united states or wherever they are?

If you're thinking about something like sabotage, if the n.s.a. were inside the chinese firewall and wanted to do something like this, it's really kind of a sexy proposition that something like this could happen.

But any time you set up a system like this, this is the risk you run.

I think we started all the conspiracy theorists talking just then.

Yeah, we're here to help.

This text has been automatically generated. It may not be 100% accurate.

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