Source: China Solved (Aug-Nov 2009)

Chinas Fractured Web, Part 1 – Opportunities and Challenge

With the effective blocking of You Tube, Facebook and Twitter, Beijing is succeeding in splitting the Chinese internet away from the global system. A few years ago China’s “Great Firewall” was considered anachronistic and laughably outdated. But instead of crumbling into cyberdust, the digital version of the Great Wall of China has become broader, higher – and more comprehensive.

What are the implications of a fractured internet that excludes not only individual sites but entire communication platforms? It is inconvenient for a few people at the moment – but how significant is China’s blockage of Twitter and Facebook? Just a few international nerds whining — or a powerful and explosive trade issue?

Let’s take a look at a future where A) Twitter, Facebook, Google and YouTube are used to power and enable mainstream business transactions (communication, marketing, sales, logistics, hr), and B) China effectively pursues a policy of blocking access to the Chinese internet.

A Fractured Web

What’s happening in China now? Internet users in China have been blocked from accessing Twitter and Facebook for a little over a month, due to national security concerns. YouTube has been blocked since late March, 2009. Google was briefly blocked in June, and still seems to be linking only to selected sites.

Beijing has moved from blocking specific sites or articles to shutting down entire platforms. Momentary Twitter glitches have created media panics and mass hysteria in the US, but the international community seems barely aware that China has been completely blocked for more than a month – with no indication of when access will resume.

Fracture by Design – The Policy?

Mainstream media seem to regard this as a nasty but temporary pothole during the construction of the great global superhighway of media, data and information. It’s not. The fact that China is technologically capable of blocking entire platforms – and is increasingly willing to do so – has changed the equation. Financial analysts and media buyers are starting to re-factor calculations. VCs will have to redefine the concept of “global market” for web-based companies.

The pendulum is swinging back. The internet is changing, and will become more regulated, segregated, secure and yeah – paid. The internet is becoming just another form of infrastructure and less of a culture unto itself. Although the ‘all free, everywhere and everyone’ web-dream of 2005 was great for entrepreneurs and hippies, there were definitely some potential winners and losers if everything followed the same trajectory. With millions of new Chinese viewers discovering the internet every day – and clicking onto Mao-only-knows-what – certain people were going to start to notice. And now – while there is global chaos and trouble at home – is the perfect time to try out some new ideas.

The best pirates make the best sheriffs.

The Fearsome 4 (Google, You Tube, Facebook and Twitter) are going to power the part of the internet that counts – the business side. Just like Microsoft dominates the desktop, the F4 will dominate the online world. They will be the medium-sized pipes of the internet that bring video, messages, communication, news, and transactions into and out of your world. It’s unlikely that Beijing wants to surrender that much access, control AND revenue to the international companies that they cannot influence – or charge.

Maybe Beijing has learned from mistakes with Microsoft. Throughout most of China’s digital boom, IP protection was murky and piracy rules were lax – allowing Chinese businesses access to international standards of software quickly and affordably. But Beijing policy-makers had to notice that a foreign company came to dominate a potentially lucrative market and embed itself in Chinese society. Letting Microsoft in was practical and expedient — but there was no way to get them to LEAVE.

Today’s technological challenge is different. Whereas there was no practical Chinese alternative to MS, there are great, popular and very Chinese alternatives to YouTube, Facebook, Google & Twitter. Companies that are onboard with policy makers and don’t have any trouble maintaining a national security perspective. So the most practical policy initiative may be to block Western media companies from unfettered access to Chinese ‘territory’ – no matter what the form of transmission. The internet is now no different from print or broadcast media – which are controlled to one degree or another everywhere.

The question facing international managers in China is — what will the Chinese internet policies look like? How will the rest of the world respond? What are the business and competitive implications? What can you do now to prepare for a potentially explosive and divisive trade issue?

Chinas Fractured Web, Part 2: Web 3.0 Has Border Checks

China’s growth policies and free, unfiltered internet access for all just don’t go together. It’s not in Beijing’s best interests to give outsiders unfettered access to its population – or to give everyone inside China free access to the world. A fractured web where entire populations of users can be ring-fenced and access can controlled brings the online world in step with existing policy.

No other form of media or infrastructure in the PRC is exempt from state planning – it is illogical to assume that the internet would enjoy special privileges. Mao ordered the gauge of the railroad track linking China and Russia changed to prevent large-scale invasions using the nation’s own infrastructure. The internet has the potential to be an even more power force. The obstacles preventing Beijing from regulating the internet in the past have been technological – and it seems that they’ve got them licked now. If China is strong then the global internet is fractured and filtered. China has the muscle and the method – they can completely firewall a quarter of the planet.

It’s not the end of the world. It’s just policy.

It’s probably not a sign of the apocalypse. Maybe it’s not a big deal at all – judging by the round-the-clock media coma we’re seeing devoted to the China’s month long shut down of 3 of the big ‘Lifestyle 2.0’ sites for American users – Facebook, Twitter and YouTube (the last one has been blocked in China since March).

It does mean, however, that the world’s fastest growing online market (China) is now one degree of separation further away from the world’s richest producer – and consumer – of online content and services (US). The world wide web is no longer one world. The Chinese internet already has the critical mass needed to thrive and develop on its own, independent of western media brands – even Twitter. There is no mechanism for pressuring or coercing the Chinese government. Economically, a fractured web could very well do more benefit than harm to China. Simply put – we’re not witnessing a momentary hiccup or infrastructure malfunction. This is policy. Deal with it.

So what will this mean to you?

Let’s say you’re a savvy American doing business in China or Chinese targeting an international market. The underlying forces driving your China business are your ability to move across cultural boundaries and to exploit positive economies of scale for marketing and operational costs. Your goal is to take an existing operation and expand to or from China as part of a continuous, incremental global expansion plan.

Well, Comrade, I got a steamin’ bowlful of dystopia heading your way. A fractured web – where national bureaucracies filter access to the internet – will be a lot more far-reaching than many people may understand. Not being able to get Tweeted may sound like a minor thing, but owners and managers have to start planning for a future where you can’t access your Gmail, company site, private server or business email when you are in Shanghai or Beijing. The problem isn’t that China will do all of it – it’s that they can do any of it. We’ve been given notice – and demonstrations. The onus now falls to international managers to process the new reality and start making provisions.

US-China Trade implications of a fractured web.
Let’s take a look at a few of the big business issues that could arise from a policy that restricts internet access in China.

Possible trade issue? No one in Washington seems to eager to speak on the issue because A) it still sounds like slackers twittering when they should be working, B) this issue has the potential to get very ugly very fast (freedom of speech & human rights vs. decadent porno filth corrupting youth), and C) we’ll be doing it in the US in a few years. HOWEVER, sites like Youku and Tudou that violate copyrights could be an interesting test case in the US. Retaliation is ALWAYS an option.

Getting your brand message across to a Chinese market will still be possible, but will be harder and more specialized. You’ll be spending money you can’t track, which makes some people queasy. Social media marketing is messy under the best of circumstances, but doing it in Mandarin on platforms you’ve never heard of is pretty challenging. The bar will be higher, and it will be worthwhile for fewer and fewer firms.

Trade barriers may protect western markets – or at least parts of it. China is growing faster, but the real money is still in the highly developed western markets where mainstream buyers spend big on authentic brands. China has demonstrated a real talent for online marketing and networking – and it was one of the areas where Chinese entrepreneurs had a real shot at going global. The wider the gap between the two internet universes, the less likely that Chinese companies can make the jump. It’s like Marvel and DC. It’s not easy to cross over. (The same is true for US companies that want to go to enter China, but western firms with an existing presence in China should be able to manage the change easily.)

China allowed to develop strong media players – and it’s own internet trends. The fractured web gives breathing room to big names like Youku and Xiaonei – and a host of smaller newer outfits we haven’t heard of yet. They will likely start to attract a lot of attention from international VCs that are betting on the Chinese internet – so look for lots of startups and a highly fragmented market that will take its time finding a direction. China will be a vibrant incubator of internet creativity – but it will be hard for anyone to get critical mass.

China as mobile specialist. Chinese users will continue to spend much more time on mobile screens, and their sites and platforms will develop and cater to mobile interface. Americans – stuck in ridiculous, bloated telecom contracts – will rely more and more on keyboards. Email and reading text for us – instant messaging and images for them.

This was bound to happen anyway – whether the Chinese did it first or someone else. Bush Cheny would have done it if they understood enough about the interwebs to know how important it was. There may be opportuntieies for some, challenges for others. Thje losers will be the ones paralyzed by the shift – or betting on the wrong direction.

China’s Fractured Web, Part 3 – Myths and Realities

At the time of this writing, Facebook, Twitter and YouTube are still unavailable in Mainland China. YouTube has been blocked since March of 2009, and Facebook and Twitter have been dark for almost a month. There is no indication about when – or even if – the blockade of these sites will be lifted.

First, let’s put a couple of myths to rest.

Fractured Web Myth 1 – the Chinese internet blockade is a minor inconvenience that just about everyone can get around.
Fractured Web Myth 2 – the only ones affected are kids surfing for fun.
Fractured Web Myth 3 – it’s a temporary phenomenon
Fractured Web Myth 4 – it’s about national security – not an international business or trade issue.
Fractured Web Myth 5 – Chinese counterparts and substitutes already exist.

Myth 1 – It’s just a minor inconvenience that just about anyone can get around.Simply not true. There was a time when proxy servers were simple, effective and free ways to get around the Chinese internet blockade, but China’s technology has gotten better and better. Even some commercial VPNs (virtual private networks) that charge for access are being blocked now. The cost of going online in China wasn’t cheap to begin with, but going online in China is now becoming more expensive, slow and difficult. Another problem with VPNs is that they often require software to be downloaded – making online life even more difficult for those of you who have more than one computer. A handful of digiratti will take the time, trouble and expense to get around the blockade – the vast majority of Chinese netizens won’t bother.

Myth 2 – These social media sites are all just kid’s stuff. True, 90% of the bandwidth used by Twitter, Facebook and YouTube seems to be devoted to college-boy pranks and sophomoric banality – but that is rapidly changing. Twitter is being used as a news feed, marketing platform and communications-tool by serious, grown-up businesses. Facebook is emerging as one the best ways to build and maintain an online professional or customer groups – and a great advertising platform. YouTube videos, embedded in private sites, puts professional quality broadcasting within the grasp of small & medium sized businesses everywhere. The impact of China’s blockade is relatively minor for now, but business applications for the Google, Twitter, Facebook and YouTube are growing fast. Businesses interested in marketing to or fromChina are going to find themselves at an increasingly significant disadvantage.

Myth 3 – It’s temporary. YouTube has been blocked since March 2009, and Facebook & Twitter have been down for over a month. In the 24-7 world on online commerce, that level of service interruption is total. YouTube may come back someday (or it may not), but no IT or Marketing department will ever again be able to rely on the platform in China. The same goes for Twitter and Facebook. Even Google has been restricted and hobbled to the point where it is not a 100% reliable business tool in China. For business owners the bad news is already in the market and they are responsible for finding a way around it. No one can claim ignorance about a risk that has already been demonstrated.

Myth 4 – It’s not a business issue. The 20th century benchmarks for international trade were how many containers or freighters one nation sent across the water to another. In the 21st century, it will be about data, viewers and users. The few big sites that have been blocked and hobbled in China are powering thousands of small businesses and driving the future of online commerce. China has become a dead-zone for any business planning on building an international online presence.

Myth 5 – Chinese replacements already exist. Sites like Tudou, Youku, Xiaonei, Kaixin, Baidu and a host of others already replicate the functionality of the blockaded sites – so it’s easy to say that the problem has already been essentially solved by the marketplace. Indeed, if it were possible to link Twitter and Xiaonei or Facebook and Kaixin, this argument would be valid – and represent an exciting opportunity. But the fact that the two internets are developing in isolation and segregation from one another creates diseconomies of scale. Companies wishing to bring their online presence to China will have to duplicate budgets and content – and overcome substantial hurdles as far as quality control and due diligence. Multiple platforms that cannot integrate with one another raise the hurdle rate for business and makes marketing to or from China so expensive and risky that it is now beyond the reach of most small business.

China’s Fractured Web, Part 4: Advantage China – The Digital Friendship Store

The global internet system is being split into distinct jurisdictions with differing – often opposing – standards, actors and regulators. In China the internet has always been subject to the laws and standards of various Beijing regulators – often referred to as the “Great Firewall of China”. As the PRC gets better at restricting and filtering access, we are witnessing the emergence of a distinctly Chinese internet that will look vaguely similar to the rest of the world’s – but in fact perform different functions and have a completely new relationship between publisher and viewer.

Fractured by Design
China had been restricting access to international websites long before the recent blockade of Facebook and Twitter. Recent events – both in China and abroad – were probably a catalyst, but the latest government moves have more to do with improvements in network monitoring and control technology than they do with national security. The policy of media control in China predates the existence of the Communist Party. The real question isn’t ‘why is the PRC blockading the global internet?’ but rather ‘why did it take so long?’ A wide open, unregulated internet is at odds with China’s long-standing information policy – and recent moves simply bring the internet into harmony with laws governing radio, film, TV and print media.

China – though officially quiet about the blockade – seems to playing the morality card as justification for its internet blockade. (It’s all about protecting the kids from the evils of foreign porn.) The shot fired across Google.com’s bow (banned for a day or so this past June and still link-hobbled) was explained as an anti-porn move. This follows a familiar pattern among Asian gerontocracies to legitimize restrictive laws by impugning Western moral values. This argument sounds craven and hollow abroad where freedom and openness are considered worthwhile values, but plays very well to Beijing’s domestic audiences.

Fractured Web, Flourishing Profits
The blockade will be very profitable for Chinese firms – in the mid term. Companies like Xiaonei and Kaixin which borrowed heavily from western pioneers, will be the big winners here. They will solidify their Chinese audiences and keep Chinese ad-spends safely onshore. Chinese firms can continue using Western models as templates for new product development while effectively hobbling the overseas firms’ attempts to localize and refine their international offering for a Chinese audience. The local media firms will cooperate with ministry edicts and public safety standards – thus allowing them input into the very standards that will bar foreign competitors from access.

The PRC learned two bitter lessons from its recent involvement with big Western tech corporations. Microsoft taught Beijing that getting a foreign guest to leave once they have shared their technology is very difficult – as Windows and Office strengthen their footholds as the standards on Chinese desktops. Google introduced China to the harsh realities of math on big online networks: 20% of all Chinese viewers is still a large number (particularly when Baidu is wracking up a whopping 0% of the global market). Even if the international versions of Facebook and Twitter only command 10% of the Chinese internet market, that is still on the order of 20 million Chinese. A not-inconsiderable number – and one that is growing by the day.

But it’s only broken temporarily….
The problem with the notion that the Chinese net will somehow become more open after the October party conference is troublesome for two reasons. First – it is an unknown, and second – it is irrelevant. Twenty-somethings twittering about ‘how wasted they got last night at Sin’ can react quickly to the vacillations of policy and technology, but media buyers, software developers and corporate strategists have to take a longer-term approach. Blockades raise the costs of marketing to or from China. Now that the local Chinese net has been ring-fenced the global systems will never be whole again – and corporate decison-makers are required to factor the new risks and costs into their calculations. Every global IT and marketing department that chooses to operate in China will have to deal with two internets – two platforms, two budgets, two creatives– and two sets of legal standards.

What about VPNs and proxy servers? China is a nation of laws, even if enforcement is sometimes lax or selective. China can get very fussy about regulatory violations when it wants to – and telling a Beijing court ‘… but my secretary said that everyone does it’ probably doesn’t constitute a valid legal defense. Tweeting kids slipping through gaps in the firewall probably don’t have to worry – but the next iteration of ‘Rio Tinto-type’ defendants may have to face additional charges of violating the PRC’s media and internet regulations.

The Digital Friendship Store
In the bad-old days when the Chinese economy was isolated and foreigners were barred from holding RMB (and instead had to use FECs – foreign exchange certificates) Westerners visited the Friendship Stores. These were CCP versions of a department store – clean, brightly lit, well stocked and restricted to ‘foreign friends’ and the Party elite. While the rest of China struggled with shortage and inferior local goods, visitors to the Friendship story had access to a wide range of products – some traditional, and some imported conveniences. But something was always vaguely wrong with the Friendship Store – it was like shopping in a 20-year time warp. You could only buy what bureaucrats decided you should have access to – but it still made sense if there was shortage or structural impediments. When Deng Xiaoping opened China’s economy to the outside world, the Friendship stores folded in the face of normal competition. It seems that the Beijing notion of a properly outfitted shop couldn’t compete with market-driven businesses.

For the moment, the Chinese Friendship Net is delivering all the same services and products as the international internet – in some cases even more. But as the two internets develop and diverge, we will return to a situation where commerce in China becomes separate but unequal. Those caught on the wrong side of the digital border will not have access to new media or technology – while a digital Chinese elite will have VIP access to the global net.

China Always Fools Itself That It Can Always Fool the Foreigners
Chinese like to tell themselves that they can always fool the foreigners. This time, however, they may have outsmarted themselves. The sun is setting on China as a manufacturing center. China’s millions of unemployed grads are more likely to end up at a workstation in an office building than on a production line in a factory. In the short term, China’s fractured web offers the hope of long-term employment contracts at China’s new media firms. But in the mid-term, the fractured web makes China less attractive as a regional business center. It won’t be long before Taipei and HK start getting second looks as strategic ‘stand-off platforms’ for marketing to and from China. Chinese marketers behind the digital blockade will be the first choice for selling to the second-tier cities, but these people will be ineffective at international online marketing.

China’s Fractured Web Part 5: Advantage America – the Rebel Empire

The systematic blockade of American media giants Youtube, Facebook and Twitter is a major setback for international firms trying to access the Mainland Chinese markets – and for China-based organizations trying to get their message out of China. By blockading Chinese access to these sites, China is effectively creating 2 internets that don’t communicate freely with one another. The irony, however, is that the fracturing of the internet into 2 separate systems may benefit the American media giants and present them with new opportunities – both within China and abroad.

Has Beijing made Twitter cool again?

China’s Blockade keeps Chinese media Companies locked IN
There is now an effective ring-fence around Chinese entrepreneurs who must decide whether to market in China or in the West. The blockade effectively neutralizes China as a competitive force in global media — which is one of the areas where Chinese had great potential. China’s online firms have shown impressive facility in adapting international trends and technology to their domestic market — and may very well have come up with the next big thing internationally. Companies like Alibaba, Taobao and Youku have demonstrated that they can innovate AND scale-up — a problematic combination for many other industries. Chinese versions of EBay, Google and Youtube all went head-to-head with their Chinese counterparts and walked away bruised & bloodied. Of all the Chinese companies that had a chance to go global and establish a presence overseas, it was the network-based IT services that seemed to have the best shot. Most Chinese businesses have little sense of how to build a brand or scale a company — but China’s internet companies were different. Think of the Chinese brands you know — who had a better shot of establishing a foothold in the US or Europe: cTrip or China Eastern Airlines? Alibaba or LianHua Supermarket? Youku or CCTV? Whether you were battling hordes of raiders or haggling for containers of razors, your dealings with the China Inc AND the ordinary Zhou on the street were never as transparent or frictionless as they were online.

The problem for China –and the opportunity for the West — is that it is very hard to become expert at a system you don’t use. Westerners are relying on social networks for product information and transactions, and marketers are well aware that they ignore the trend at their peril. But China-based companies have lost the access AND the cheap labor needed to run broadbased internet marketing campaigns. Anyone involved in HR or management in China knows just how significant soft-skills are – and how much of a gap there can be between Chinese and Western business practices. A fortune has already been spent training English-speaking graduates on the finer points of international business – not because the Chinese hires did things WRONG but because they did things DIFFERENT. None of those stressed out MNC marketing manager or corporate trainers in Shanghai ever said that their local charges were uneducated or unintelligent – just that they didn’t know how to be effective in an international environment. Chinese kid are growing up in a world without Twitter and Youtube, and the blockade just reinforces the separation. When Alibaba and Taobao hire young grads for online marketing, they will find out very quickly that the international buying community doesn’t know what QQ or Sina.com is. The newest cultural divide is online – and Chinese marketers will be just as stymied by the gap as their parents were when they met their first Western purchasing agent 15 years ago.

Chinese Blockade keeps free, cutting edge information OUT
As Youtube grows into a business training platform and Twitter grows up into a mainstream CRM and price-ticker tool, Chinese viewers will lose an important business education tool. The internet as equalizing resource is gone – at least for the Chinese. Sure, the digiratti in Shanghai will shell out for a reliable VPN without thinking twice – but that 15 year old wiz kid struggling to make it out of Anhui or Gansu to become the next Jack Ma isn’t going to bother. He is going to stay just as insular and isolated online as he is in the real world. And quite frankly, folks, his loss is YOUR opportunity.

Chinese media critics are right — the Chinese internet doesn’t need Western platforms and networks to survive and prosper on its own. An internet with Chinese characteristics is great if you are a kid in Beijing High chatting with your friends — but lousy if you a Chinese entrepreneur trying to grow sales overseas. Chinese users understand the basic language of international social media — but they will lack the first-hand experience to be truly effective. Like the Chinese English majors from the class of 2005 — they will be long on book learning but terribly inexperienced and clumsy in practice.

A New Roadmap
Western companies have to face up to the brutal fact that marketing to China is tough and getting tougher. There is no convergence coming. Globalization, if it is indeed a real thing, is top down — and buying decisions are bottom up. With the fracturing of the internet, the illusion of a global community has been put to rest. Chinese and global internets moving further and further away from one another. Savvy Western investors and marketers will quickly learn how to capitalize on the new fractured web and even turn their outlaw status in China to their advantage.

China’s Fractured Web Epilog – The New Normal

The fractured web is the new normal. What if tomorrow we in China could sit down at our computers and access YouTube and Facebook and Twitter with 100% freedom. Would the whole blockade thing just blow over?

Nope. Even if every switch gets thrown and the blockade comes down completely, the job is already done. There are two internets – one Chinese and one International. If anything, there are likely to be more fractures and restrictions.

China has already demonstrated that it CAN block the internet. The rest of the conversation is about whether or not China WILL block the internet.

If you know that something is possible then it’s just a matter of time before it becomes a reality. Businesses investing in global IT will have to re-calculate their China costs. For CIOs and international managers the decision chain is clear – and the news is likely to be expensive. Many companies will need independent back-up systems – even for the global parts of your system that will be unaffected by a blockade. If you can’t get inventory information out of Shenzhen, then it really doesn’t matter how well the rest of your global MIS is working.

Web3.0 – the Digital Border Check.
Border checks always have a valid security rationale – and an unpredictable economic cost. Once they start, it’s hard to know what responses will emerge from the system. The US and other western countries may follow suit – attempting to increase their ability to monitor and filter. Large private firms will also get involved, as they try to monetize existing traffic, raise switching costs and manage the security of their own networks. More publishers will charge fees or require verifiable log-in identities.

The age of the wide open internet was coming to a close anyway – but China’s blockade has raised the stakes. Beijing demonstrated that a quarter of the world’s population (and a higher percentage of internet viewership) could be effectively fenced off with no significant protest.

It’s Just Policy.
It’s not personal, national or even cultural. It’s just policy.

Usually industrial and national security policies are at odds with one another. This time they dovetail beautifully. This must have been a no-brainer for Beijing. Suppress potentially disruptive voices and protect key industries at the same time — in one fell swoop. Everyone from the Party leadership to the business community loves the idea. The downside if very limited – at least in the short term. Chinese grads are going to end up a little less skilled and hirable – but it will be a couple of years before even that shows up in the market.

Why would the Chinese government lift the blockade now? The hard part is putting it in place and justifying it to the world. They have the tech – and no one blinked.

The Damage Has Been Done. Learn the lessons
The blockade has made China’s internet a seismically active zone – the ground can shift at any moment. Today 1.3 million people live on another tectonic plate, and it has the potential to twist further away from the rest of the planet without warning. In the short and medium term, we can expect to see the following developments:

* This will harm China’s attractiveness as a regional center. Media, marketing, entertainment, news and publishers will have a hard time justifying their international offices in China.

* Makes branding harder – both for Chinese companies trying to develop an international brand and for international marketers trying to reach China’s middle class.

* Increases soft-skills gap – China’s trainers, coaches and teachers just got a new service to sell. Look for armies of Chinese grads who will need special training in how to ‘social network for Western business’.

* Favors companies that can spend big in two completely different/distinct internets. Entrepreneurs and private Chinese firms will have to choose where to allocate scarce assets – in the Chinese internet or the Western one. Well funded MNCs and Chinese SOEs will pay without a second thought.

*Reinforces VC model of participation – It will be more effective for international investors to incubate new Chinese firms than to try to migrate existing brands into the Chinese market.

Dos and Do not Dos: An Action Plan for Web 3.0

Do prepare for a day when Google goes down and doesn’t come back. You’ve been warned twice already – Google does not have a special pass to the Chinese internet. Every time Google is hard to find, everyone in China says, ‘we can’t do business without gmail and Google tools’ – and then the lights come back on and it’s business as usual. Well, one day the lights may not come back on. Do you have a back-up for all of the Google systems you use – including mail, chat, Adwords and Google Docs?

Do prepare for a more institutionalized, bureaucratic internet with more border checks on data. If you have a single-channel information policy (everything goes over our own corporate servers, or gmail, or a commercial system) then you are engaging in risky behavior. You need alternatives, plan Bs and contingency plans. Start auditing your shop to make sure that you can deal with the unexpected.

Do find ways to turn this to your advantage. There is value in being able to get in touch with groups on both sides of the firewall. We all used to have the same free, open access — but that simply isn’t true anymore. If you have established channels or are reaching large numbers of potential buyers in China, then your value in the marketplace should be rising.

Have a plan for reaching the real Chinese middle class. Find a way to bring them into your data measurement tools. It turns out that we were never really seeing them on Facebook or Twitter, and we certainly won’t in the future. So what is your plan? You have to identify your Chinese market, target them with appropriate messages and then capture their data in a way your existing tools can make use of.

Have considered, itemized Plan B for everything and anything IT related. A lot of you standard cost-metrics are based on the assumption of a global internet. Now you have to treat China like a separate entity. That means a separate IT budget, a separate advertising and marketing budget – and maybe different teams or outsourcers. Synergies and economies of scale just got a lot harder to achieve in the international China market.

Do Not Dos:

Don’t assume that you are seeing the ‘real China’ on Facebook or Twitter. The Chinese people you are seeing on these services make up a new, very interesting demographic – but they probably number in the tens or maybe hundreds of thousands. The hundreds of million middle class Chinese have moved one giant step further away from you and your desktop. A key question for international marketers is ‘how similar are the real Chinese and the Facebook Chinese’? Answer: Probably very different – and moving further apart.

Don’t assume that the government will have to do anything in particular. It is very hard to apply pressure on the Chinese government during the best of times on the most pressing matters. These aren’t the best of times, and no one seems to view this as a pressing matter. Furthermore, the policy-makers in Beijing are probably making themselves EXTREMELY popular with this blockade – from the business community to the national security brass to the China First crowd. Internally, this policy has been a huge success. There is very little reason to think that Beijing feels any pressure over this at all.

Don’t think that the same thing can’t happen anywhere and won’t happen everywhere. You’ve been warned. You’ve already seen it.

Imagine the year is 2015. You are the newly appointed marketing director at Alibaba or Li Ning headquarters in Shanghai, and your charge is to bring the brand global. Your HR department fills a room with 20 smart, bilingual grads who all have double-majors in English and International Marketing. You go to brief them on their new job — running a series of viral social-media campaigns targeting hip young Western decision-makers using Twitter and Facebook – but all you get is blank stares. ‘Oh,’ says one of them. ‘That’s like the American Xiaonei, right? I studied that in my info-tech class once, but I’VE NEVER ACTUALLY USED THEM.’