Taiwanese businesses should learn from Cisco Systems' experience of investing in China, Ethan Gutmann, the author of Losing the New China -- A story of American Commerce, Desire, and Betrayal, told a forum in Taipei yesterday.
While Cisco Systems has achieved unprecedented success in doing business in China, capturing 80 percent of China's network router market, the company has been strongly criticized for helping the Chinese government to establish the "Policenet" system, Gutmann said.
The system allows Chinese policemen to access any citizen's work unit, including reports on the individual's political behavior and family history, fingerprints, photographs and other imaging information. The police can also check if a citizen contributed to a Web site in the last three months, access their surfing history and read their e-mail, Gutmann said.
He said that Cisco unveiled "Policenet" to the Beijing authorities in 2002 at a trade show in Shanghai.
Following the trade show, Cisco built a national public security bureau database, with real-time updating and mobile-ready capabilities, he said, adding that by June 2003, the system was in place in every province of China except Sichuan.
Gutmann said that the system violated the US Foreign Relations Authorization Act of 1990 and 1991, which suspended "the issuance of any license ... for the export to the People's Republic of China of any crime-control or detection instruments or equipment."
Cisco has come under severe criticism for its contribution to "Policenet," with columnists in the Washington Post and Boston Globe even comparing the system to IBM's work for the Nazis during the Holocaust.
"China is uncertain soil for an American company, but it is even more tenuous for a Taiwanese one," Gutmann said.
"No matter how much pressure the Chinese government wields toward Taiwanese investors to follow certain lobbying objectives, and no matter how lucrative the China market seems, it is prudent to take a long-term view and pay attention to the home market," he said.
RSS