Photographer: Ed Jones/AFP via Getty Images

China Can't Keep Winnie the Pooh Caged Forever

There’s an old adage from early in the web’s history, usually attributed to civil libertarian John Gilmore, which proclaims, “The internet treats censorship as damage and routes around it.”

It’s an optimistic sentiment and one that has been severely tested over the past 20 years, particularly in China. The country’s Great Firewall, which blocks access to western websites such as Google, Facebook and Twitter, treats certain politically sensitive topics like radioactive malware, and it has turned the world’s largest internet market into an isolated digital continent. But there have always been drawbridges back to the rest of the world—software tools such as virtual private networks that give businesses and sophisticated internet users in China access to the full web.

Now, as my Beijing-based colleague Christina Larson is reporting, the Chinese government is preparing to pull up those bridges. The country has told internet service providers to block access to VPNs by early next year. It has shuttered a dozen livestreaming apps that let people broadcast themselves in real-time and potentially distribute political content or pornography, evading government regulators. And in the strangest move, last week it blocked some online images of the beloved A. A. Milne character Winnie the Pooh, because online commenters were comparing the physique of the red-shirted bear to that of Chinese President Xi Jinping.

Moves to shore up the Great Firewall reliably happen every few years and coincide with the twice-a-decade Party Congress, which will be held again in the fall. This year, the Guardian newspaper has reported, Xi may be looking to stymie opponents who are using the internet to circulate politically damaging allegations against the government.

Chinese officials talk about internet censorship as a pursuit of “internet sovereignty,” which basically translates into: We get to set our own online rules, so mind your own damn business. It will be interesting to watch whether, as Gilmore might predict, new workarounds spring up in the absence of conventional VPNs, providing continued access to messaging networks such as Whatsapp, which until now the Chinese government has mostly left alone.

But as Christina points out in her story today, the great crackdown isn’t just a civil rights issue but a significant business one as well. Startups are dependent on VPNs to access services abroad. Western companies rely on VPNs as a tether to their overseas counterparts and to safeguard the security of their data.

The emboldened censorship also comes at a terrible time for the China tech industry’s global ambitions. Chinese startups like Didi Chuxing, the ride-hailing juggernaut, or Ofo, the bicycle-rental upstart, are now raising billions from foreign sources like Japan’s SoftBank Group Corp., America’s Silver Lake Partners or Russia’s DST Global. We also wrote a few weeks ago in Businessweek about the global aspirations of Tencent Holdings Ltd., the messaging and video game giant. Tencent wants to bring its most successful smartphone game, the wickedly entertaining Honour of Kings, to the U.S. and Europe. Now the Chinese government, via an editorial in the state-controlled People’s Daily, is accusing the role-playing game of harming Chinese youth and warping traditional values, suggesting it, too, could get caught in a crackdown.

To be sure, China isn’t the only country taking steps toward what looks increasingly like digital isolationism. Russia is another country carving out its own corner of the internet through restrictions on where citizens’ data can be stored and for how long, as well as the use of censorship—sometimes with amusing consequences.

The U.S., increasingly moving toward nationalism, is introducing new obstacles to economic links between countries. As Reuters reported last week, a secretive U.S. government agency called the Committee on Foreign Investment in the United States is now rejecting or at least delaying many proposed acquisitions of U.S. companies by foreign buyers on the basis of national security. This could have a big impact on tech deals in particular. Many of those prospective acquirers are Chinese companies and investors, ramping up their global ambitions at what now seems like an inopportune time.

The internet is going to have a hard time routing around all this. In the immortal words of Winnie the Pooh, that “makes it a bothering sort of day.”

Sign up to receive the Fully Charged newsletter in your inbox, and follow Bloomberg Technology on Twitter and Facebook for more.

And here’s what you need to know in global technology news

Uber's biggest rival in Southeast Asia is getting more cash. Didi Chuxing and SoftBank are putting $2 billion into Grab, which said it's seeking another $500 million. That would give the ride-hailing company a valuation of about $6 billion, a person familiar with the matter said. Will that force Uber to seek another truce, like it did with Yandex in Russia? 

India arguably has the world's most comprehensive and advanced ID system, called Aadhaar. That system is being challenged in court, in a case that may determine whether privacy is a fundamental right of every citizen. The case could have implications for the country’s biometric identity program and a slew of global technology companies.

A left-wing VC and his right-wing dad. Ben Horowitz, a prominent investor in companies like Facebook and Twitter, is your typical left-leaning Silicon Valley luminary. But his dad, the former Black Panther ally David Horowitz, is a now a high-profile Trump supporter and a right-wing idealogue. The New York Times explores the unusual family dynamic; Thanksgiving dinners must be awkward.

AI that sees the world as checkers, not chess. Before Deep Blue and Gary Kasparov, Watson on Jeopardy and Alpha Go, a computer program called Chinook faced off against the world's checkers' champ. Alexis Madrigal recounts the epic showdown from the early 1990s for The Atlantic.

    Before it's here, it's on the Bloomberg Terminal. LEARN MORE