It was the force of capitalist profits, not communist law, that compelled Yahoo to hand over Shi and its unapologetic response seems devised to ingratiate Yahoo further with Beijing. Last month, Yahoo spent a billion dollars to buy a 40 percent share of Alibaba, China's largest e-commerce company. It was the single largest foreign investment in China's Internet sector, and like everything else in China, it would not have happened without the good will of the party.
The Chinese market is so delicious that companies will do almost anything to get in and stay there. A few anecdotes among many: Rupert Murdoch banned the BBC from Star TV, his China satellite network, after the BBC ran reports about human rights in China.
In the mid-1990s, Chrysler in Beijing refused to rehire a Jeep factory worker who missed work while locked up for holding a Christian ceremony commemorating Tiananmen. Only direct lobbying by Chrysler's chairman got him his job back.
In 1999, Fortune magazine held a conference in Shanghai to mark the 50th year of Communist Party rule. The conference was one great big icky fawning session. Gerald Levin, the Time Warner chairman, presented then Chinese President Jiang Zemin (
In many important ways, foreign investment has been good for the Chinese people. It has lifted living standards greatly. China's desire to trade has encouraged new permission for thousands of Chinese to study abroad, which is also a force for liberalization. Foreign businesses have promoted legal reform, although largely in commercial law.
But let's not pretend that foreign investment will make China a democracy. That argument was born out of desperation and self-interest. Because China is too lucrative a market to resist, US and European businessmen have ended up endorsing the party line through their silence -- or worse. They are not molding China; China is molding them.
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