“You Westerners, you just don’t understand,” said the wise Chinese gentleman. “In China, we think differently. You keep applying your Western ideas to us and you get it wrong. In China it is different.”

Well, that may be so, but it works both ways. It seems that just as Western analysts and the media may sometimes get China all wrong, sometimes Chinese opinion of the West is way, way wide of the mark.

Take Google’s decision to play hardball with China. One of the views doing the rounds in media circles in the Far East is that Google was worried about loss of face. It wasn’t making any money in China, but didn’t want to admit its experiment had failed, so it blamed Chinese authorities and in so doing managed to avoid a loss of face. Now, this may be a point of view which is easily understood in China, but it completely misunderstands Western psychology. Google’s decision had nothing to do with saving face.

But if there is one word that unites Western and Eastern media, that word is cynicism. Western and Chinese media may be divided over the reasons for the Google move, but there is one thing they all have in common, they are cynical about the motivation.

Both sides also agree that it doesn’t really matter. Google wasn’t making much money in China. Chinese authorities will be pleased to see the back of the Californian search engine company.

But they are wrong.

You can put it down to the morality of the company’s founders, or you can put it down to brand values, but the Google motto, “Don’t do evil”, is important. It is important because Brin and Page, the founders of Google, no doubt believe in it. It is important because the Google business model relies on trust. The company stores a huge volume of data on its users, but without their trust the Google advertising business caves in. Google understands this, and the PR mileage it is gaining right now will do wonders to repair any loss its image has suffered in recent months. According to various surveys, Google is the most valuable brand name in the world, and its value has just gone up.

Commercially it was a brave move. As you know, Google has plans to dominate the mobile phone world with its Android operating system. The Chinese market is important. But it will be all the harder for Google to break into this market now. Then there’s Google’s partners. Motorola, for example, has plans to manufacture an Android phone in China.

Some commentators are saying Google’s move represents an opportunity for Microsoft and its Bing search engine. Think again. Can you imagine the backlash in public opinion, not to mention from US politicians, if Microsoft tries to benefit from the Google move?

But does China care?

Well, she should.

China lost her position as the world’s wealthiest country 200 years ago, because she shut herself off to Western ideas.
There is one amusing anecdote from Georgian times which illustrates this point perfectly.

See: China and George III, have things changed?

The sole reason why the Chinese economy is growing so rapidly is because she has opened herself to the rest of the world. The Google decision is a real blow for China, her loss of credibility will be enormous.

Google has of course won some valuable brownie points in the US. You may recall, Google, along with Microsoft and Yahoo, were slammed by Congressmen a couple of years ago for their dealings with China. “How can you sleep at night?” asked one senator. You may agree or disagree with the US attitudes, but there is no denying them, and now Google has sucked up to US opinion nicely.

But the Google move also gives ammunition to the anti-Chinese brigade. This is made up of an odd mix of people; of liberals from Amnesty International, to hard-right protectionists. They will all latch on to the Google decision.

Anti-Chinese rhetoric in the US has found a new supporter, a company that has the motto, “Don’t be evil”.

Then there is the view in the US that China’s currency policy is the source of all evil. This argument may seem unrelated, but because human nature is involved, the media will find ways of connecting the Google move with calls for the yuan to trade freely.

Much of the anti-Chinese sentiment in the US is dangerous, and while one must respect Google for its gutsy move, an indirect result will be even less trust between the two countries.

Ultimately, however, China may be the biggest loser. On an income per head basis, the Chinese economy remains poor compared to the US and Europe. Much of her growth has been powered by Western companies investing in China, and Western ideas flowing in. China needs the West, more than the West needs China.