Which company has committed the greater evil? Yahoo Inc. helped send a reporter to prison by revealing his identity to the Chinese government. Cisco Systems Inc. helps send thousands of Chinese dissidents to prison by selling sophisticated Internet surveillance technology to China.
If bad press is to be the judge, the "stool pigeon" Yahoo is clearly the bigger villain. In 2004, after the Chinese government ordered the country's media not to report on the 15th anniversary of the Tiananmen Square protests, journalist Shi Tao used his Yahoo e-mail account to forward a government memo to a pro-democracy group. When China's Internet police - a force of 30,000 - uncovered this, it pressured Yahoo to reveal Mr. Shi's identity. Yahoo caved, and Mr. Shi is doing 10 years in a Chinese slammer for one click of his subversive mouse.
For ratting out Mr. Shi, Yahoo Chief Executive Jerry Yang was dragged before Congress, called a "moral pygmy" and forced to issue an apology. In contrast, Cisco and Chief Executive John Chambers have received little public scrutiny for providing China's cadres of Comrade Orwells with the Internet surveillance technology they need to cleanse the Net of impure democratic thoughts.
Cisco is hardly alone in helping China keep the jackboot to the neck of its people. Skype, an EBay Inc. subsidiary, helps the Chinese government monitor and censor text messaging. Microsoft Corp. likewise is a willing conscript in China's Internet policing army, as Bill Gates' minions regularly cleanse the Chinese blogosphere. Google Inc.'s brainiacs, meanwhile, have built a special Chinese version of their powerful search engine to filter out things as varied as the BBC, freeing Tibet and that four-letter word in China - democracy.
Business executives have justified their actions with a "when in China, do as the Chinese do" defense. To do business in China, these executives insist, they must comply with local laws. But China's local laws often force executives to make moral and ethical choices that would be intolerable in the West.
The broader problem is that American business executives have little training in how to deal with ethics in a corrupt and totalitarian global business environment; blame U.S. business schools for that. As a result, moral horizons tend to be short, and executives who find themselves in the heat of a battle don't know where to draw the line, which is what happened to Yahoo.
Some executives also trot out the "constructive engagement" defense. This too-clever-by-half idea is that companies such as Yahoo, Microsoft, Skype and Cisco are actually pro-democracy elements because they are helping build China's Internet. Even though these companies collaborate through self-censorship and assist with Internet surveillance, the greater effect is to build free speech - or so the argument goes.
What's missing from the American corporate perspective is this bigger picture: The collaborative tools that U.S. corporations provide to spy on, and silence, the Chinese people are far more likely to help prop up a totalitarian regime than topple it.
With American corporate help, China remains the world's biggest prison. As reported by the Laogai Research Foundation, millions of dissidents languish in Chinese-style gulags known as laogai, and thanks in part to U.S. corporations, their numbers are growing.
In addition, human rights abuses are both systematic and endemic in China. From Catholics and Muslims to the Falun Gong, from pro-democracy voices and investigative journalists to the Free Tibet movement, the penalty for banned religious or political expression is arrest, beatings and sometimes death.
For all these reasons, it is ultimately shortsighted to single out Yahoo for the kind of behavior now common to many big U.S. companies operating in China. That's why we need to have a much bigger discussion about how to engage economically and politically with China. It's also why the proposed Global Online Freedom Act, which would make it unlawful for U.S. companies to filter Internet search results or turn over user information, should not be viewed as a magic bullet but rather as the start of that debate.
Peter Navarro is a business professor at the University of California, Irvine and the author of "Coming China Wars." This article originally appeared in the Los Angeles Times.