Google, Cisco and Apple: Scaling China's Wall

NEW YORK (TheStreet) -- Beyond China's authoritarian brand of capitalism -- the great wall of worry for investors -- tech shops like Cisco(CSCO), Apple(AAPL), Google(GOOG) and Microsoft(MSFT) see a wealth of opportunity.

With no promise of a tech-spending recovery and with domestic sales still in a slump, U.S. technology firms are finding the potential for growth in China hard to ignore. Commerce, it seems, takes precedence over the free flow of information.

"There's no question that commerce outranks conscience in corporate board rooms," says Technology Business Research analyst John Byrne. "China is too big an opportunity for most public companies to pass up."

That's why it was so shocking last month when Google, after the company's network in China was hacked and the Gmail accounts of two human rights advocates came under surveillance, told China it would stop filtering its search results or pull out of the country.

International politics and business objectives usually chug along on their separate tracks. It's awkward and sometimes frightful when the two paths collide, as is the case with Google and China.

On the political front, China retaliated and made it clear who was in charge. Its initial response was to remind Google that it was welcome to do business in the country as long as it does so according to the law.

Taking the political handoff from Google, U.S. Secretary of State Hillary Rodham Clinton encouraged negotiation and change. "They have their perspective. We have our perspective. But obviously, we want to encourage and support increasing openness in China," Clinton said in a speech on Internet freedom at the Newseum in Washington, D.C., on Jan.21.

In the end, no one seemed surprised when just a couple weeks later, Google tempered its position, saying it remained quite committed to China, though it still wanted to try and negotiate changes with the government there.