Thursday, May 11, 2006


From the Financial Times:
"China’s leading web search company has launched an online, user-generated encyclopedia modelled on Wikipedia, the hugely popular co-operative reference website that is blocked by Beijing censors."
The new service, Baidupedia, is an local Chinese attempt to offer the same kind of service as internationally available products.
"The service, which Baidu launched last month, highlights both the sensitivities of operating in the Chinese internet market and the opportunities created for local companies by the government’s blocks on thousands of overseas websites."
I guess the above quote from the story is technically correct, but fundamentally flawed.  China, by restricting the flow of, and access to, information, is doing the same thing to it's people (and companies) that tariffs did for U.S. automobiles.  Tariffs allowed Detroit to live and prosper, as long as there was no competition.  But as soon as there was competition, the "big 3" got slammed by higher quality, lower cost products from anywhere else.
For China, restricting the flow of information to its people allows them to thrive in a purely domestic-based market.  But when they have to face competition from people with access to an entire world's worth of information--rather than a tightly rationed and homogenized version of reality--they will have a hard time succeeding.

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