I want to thank the organizers for inviting me to speak to you.

I’m particularly honored because I’m not a historian of the Chinese Communist Party. Nor am I, in any way, a victim of the Chinese Communist Party. In fact, just the opposite: as an American business consultant in Beijing for several years, I was the recipient of a rather luxurious lifestyle.

To be successful in China, American companies and expats end up rejecting the norms and ethical standards that govern our business practices and our lives at home. In exchange for that “freedom,” we must collude with Communist Party objectives. And in the process, we join the Chinese people in a generalized state of moral erosion - complying with a state-enforced lie - a matrix, a simulacrum of a modern society, a “New China.” And we export these lies. But like flies that follow rotten meat to a distant shore, we are beginning to see signs of moral contamination in the U.S. home office. And I’ll come back to that point.

Now in my book, “Losing the New China," I document the day-to-day collusion in the following:

•our presentation of China to visitors (where we eliminate the negative, accentuate the positive and explain that American business is the long-term catalyst for human rights in China)

•our daily rhetoric, (“I know when I’ve come face-to-face with the future” - Jesse Ventura; “Kodak and China: Seven Years of Kodak moments” - George Eastman, “A new form of capitalism” - Bill Gates)

•our bribes to government officials (for Motorola in the Nineties, 3% of budget, about 60 million dollars a year)

•our willingness to sell dual-use commercial technologies with military applications to China; (the most recent and damaging manifestation - the construction of high-end research and development plants throughout China, led by IBM, Intel, Honeywell, Microsoft, and Motorola).

These are many fertile areas where the home office might be investigated - Motorola’s bribes, for example, which directly violate the foreign corrupt practices act - but perhaps the most striking divergence between our business ethics and our actual practices can be found on the Chinese Internet.

Many of you may have seen the recent news about Microsoft systematically suppressing Chinese bloggers’ use of words such as “freedom” and “democracy.” That’s only the current manifestation of a goal that was resident back in the 90s.

As Peter Lovelock, a buddy of mine and a respected Internet analyst based in Beijing predicted [pg. 128]:

“These are Marxists. Control the means of communication. Embrace the means of communication. Fill it with Chinese voices. If they can block the outside and block relationships between Chinese voices, no one will listen.”

I know that Lovelock’s statement rings true because I saw it happen. I’m going to skip through that history and just tell you about a more recent event: the Shanghai "China Information Infrastructure Expo," a Public Security Bureau trade show, where a Nortel Senior Engineer assured me that they had developed a 100 percent packet capture system, specifically designed “to catch Falun Gong.”

Cisco’s booth dwarfed the others. An entrance ringed by video screens showed dramatizations of American police frisking suspects, brandishing Cisco mobile handsets that linked directly to databases and surveillance footage from stores, waiting rooms, bathrooms and other public places.

This presentation of America as an efficient police state (with no pesky search warrants required to access confidential databases or private surveillance) were juxtaposed with optimistic sound bites by John Chambers. Cisco’s PowerPoint presentation, “The CISCO Network Solution for the ‘Gold Shield Project’” contained phrases such as “Telephone solutions for Police Surveillance,” and “Video Surveillance Solutions for the Increase of Social Stability.”

A systems engineer from Cisco’s Shanghai Branch, Mr. Zhou Li, gave me an enthusiastic sales pitch for the launch of Cisco’s “policenet” technology. Cisco’s brochure diagram of the policeman linked back to information nodes is technically accurate, he explained, but “we are not just talking about accessing a suspect’s driving record here.”

Cisco provides a secure connection to provincial security databases - cross-checking and movement tracing. A Chinese policeman or PSB agent using Cisco equipment can remotely access the suspect’s "danwei," or work unit; access reports on the individual’s political behavior and family history; access fingerprints, photographs and other imaging information; access the suspect’s surfing history, and read their email.

This is not just a sales pitch: Cisco has built a structure for a national PSB database, with real-time updating and mobile-ready capabilities, and as of June 2003, it is already resident in every province of China, except Sichuan.

Now creating a special firewall box which could be used to censor the Chinese web may have been the “original sin,” a significant cornerstone in constructing the big brother Internet, but it was not illegal per se. Yet the products that Cisco (and Sun Microsystems) are now selling to China appear to be directly flaunting the Foreign Relations Authorization Act of 1990 and 1991, which suspended “The issuance of any license…for the export to the People’s Republic of China of any crime control or detection instruments or equipment.”

I said earlier that the Chinese Communist Party culture of lying and political suppression has begun to infect the US home office. Perhaps that sounds like an exaggeration.

You may be able to think of many examples. Consider my own: When Harry Wu and I held a press conference in Congress on Cisco’s Policenet, several prominent Congressmen (both Democrat and Republican) who were slated to speak were no-shows. Why? In confidence, a representative admitted that Cisco had warned them not to attend.

And consider: an unnamed Cisco rep was recently quoted in a major trade publication saying that I have “never produced one shred of evidence to support my claims.”

Well, here is my reply: the sales brochures. Take them; translate them; study the fonts; have the paper analyzed, they are yours, and go on lying if you want- just don’t try to peddle this vile technology here.

China is the largest rapidly expanding market for IT on earth. So it’s extremely tempting to play the Chinese game, particularly for companies such as Cisco, Sun, and Nortel, which are trying to make up for severe market corrections at home.

These companies have depended on the perception that Internet technologies, new and relatively undefined, are a grey area. But Cisco is no longer simply assisting the censorship of the Chinese web; at this point they are assisting the round-up of Chinese dissidents, and Falun Gong. And Internet arrests are creating the fastest growing group of political prisoners in China.

Now American IT companies want to present themselves and their technology as globally neutral. But can we construe their actions as neutral? Assisting the construction of the world’s greatest Big Brother Internet is not some sort of relativist by-product of globalization.

It’s a deeply destructive act.

It’s an attack on America’s strategic interests, values, and image abroad (you won’t see the Goddess of Democracy reappearing on Chinese soil anytime soon).

But more than that, it’s an attack on the global cause of democracy and free speech. Most of all, it’s an attack on the Chinese people.

Is it too late to reverse course? Of course not; we have the leverage: on the east coast of China you won’t find anybody who is not tied directly or indirectly to American trade. But Americans have to use the power.

Instead, in what seems to be a side-product of spending all that time around the Chinese leadership - the China business lobby in the US is particularly interested in using their power to suppress criticism.

This is a grim picture, but that’s why the trickle of good news from China is so important. Falun Gong and Voice of America have found a few cyber-cracks to get information into China. Epoch Times, in particular, drove a steamroller through the crack - “The Nine Commentaries.”

On the ground, cell phone messaging is touted, for now, as the new freedom network, much like fax machines during Tiananmen. All these efforts suggest that the Internet wars are not over and that the Communist Party is undergoing a slow motion crisis. That’s what the Chinese reaction to the "Nine commentaries" tells us.

And it also tells us that if significant segments of the Chinese people reject the idea that hyper-nationalism and internal political controls are the only way to ensure continued growth, they could break the spell of willful ignorance, could break the controls on the Internet, and could break the Communist Party. And like everything else in China, it could happen very, very quickly.

In the book, I premised that “irate, overtaxed peasants with Internet-enabled cell phones ten years from now” have the power to change China. Since I wrote those words, my belief in that statement has only grown stronger.

Some people don’t like to hear those words. And I understand why. Few of us, Chinese or American, have the stomach to replay Tiananmen; most American China analysts would like to see the Chinese Communist Party disband peacefully - a “soft landing” for the cadres, the Princelings retiring to their safe houses in Michigan and New Jersey. On balance, I would too. But when you enter history, nothing is guaranteed (and perhaps, given the bloody history of the Chinese Communist Party, a reckoning cannot be avoided).

The real problem is that the next Tiananmen - in whatever incarnation - is much more likely to fail if Chinese citizens have to fight not only the PLA, but Cisco and Motorola, Microsoft and Intel. And this time, Americans will bear a special responsibility for that failure.

And I predict that the excuses that we hear from Cisco and Microsoft today (“Microsoft abides by the laws and regulations of each country in which it operates…" - as if the Chinese constitution forbid the word “democracy”) will be remembered as a shameful moment in U.S. corporate history.

So it’s up to us, activists, journalists, watchdogs, Congress, anyone who’s involved with China, to put pressure on American corporations; shareholder proposals; divestment from university contracts. Make a copy of this brochure and send letters, faxes, emails demanding an explanation. Tell them if the Chinese Communist Party wants to use our technology, it must pay the democracy tax.

It’s late in the day. But the reaction to the “Nine Commentaries” has sent us a flare from China - we cannot ignore it. And we must begin a massive mid-course correction; one that begins here in the US - and ends with a true communication infrastructure for the Chinese people.

Thank you.