Red-Hot Resources

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Friday, April 20, 2007

Is Yahoo Helping China's Big Brother?

I'd like to add to something I write about in my Red-Hot China report. In the report I say ...
I would avoid investing in Chinese Internet services. Why? China’s
authoritarian regime has trouble coping with the information revolution and the technology that is at the heart of growth today. For example, China passed a law prohibiting licensing of new Internet cafes in 2007. It is trying to avoid criticism of the government and its policies, but with the unfortunate side effect of strangling innovation.

To clarify, I also mean US-listed Internet companies that are doing business in China. Here is a good example why. Yahoo! could be in trouble.

The British newspaper, The Independent, explains:

In a brave legal action against the great firewall of China, a jailed political prisoner and his wife have sued Yahoo! in a US court, accusing the internet firm of contributing to torture by helping authorities identify dissidents who were later beaten and imprisoned.

Wang Xiaoningwas imprisoned in September 2003 for 10 years for the crime of "incitement to subvert state power" after he emailed electronic journals calling for democratic reform and an end to single-party rule in a Yahoo! group in 2000 and 2001.

He was arrested by Chinese police in September 2002 and claims he was kicked and beaten during his detention. Mr. Wang and his wife Yu Ling claim the Hong Kong unit of Yahoo! provided mainland police with information linking Mr. Wang to the postings, a claim that Yahoo! denies.

It is going to be interesting to see how much or how little Yahoo! has provided to Chinese government authorities. China has thousands of dissidents, many of whom are arrested partly for Internet activities. This could be the tip of the iceberg.

Internet services in China is one area I recommend you avoid; but there are others I recommend as great investments. If you want the scoop, read more about it by CLICKING HERE.


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