Research Paper on Google in the US and China

Introduction

Google is an Internet services company in the United States with business activities all over the world. It was founded in 1998 by Larry Page and Sergey Brin initially as a search engine. A search engine is computer software that searches the internet for specific information and presents it in search engine results pages. The results may contain links to websites, videos, images or applications. Web search engines also mine and extract data from open databases. From 2001, Google started acquiring other companies whose products it became interested in. It converted these products into their own and provided the services of the products along with such things as search engine services. Its headquarters are in the United States, in the state of California and its C.E.O is Sundar Pichai. Before 2015, Google had been an umbrella of the companies it owned until 2015 when the company was reorganized and a new parent company called Alphabet was created.

Today, Google is under Alphabet. Alphabet has several companies under its umbrella including Google. Google, continues to be an umbrella of all the internet interests of Alphabet. Besides web search services, the company offers other services like Google Sheets and Google docs that are meant for work and productivity, email through their Gmail, Google calendar for time management, Google Drive for cloud storage, language translation through their Google translate and video sharing through YouTube. The company also offers Google chrome which is a software application for a browser. It also built a lightweight operating system called Chrome OS. From 2010, Google collaborated with hardware manufacturing companies to create the Nexus smartphones that they branded as Nexus. The Nexus has since been discontinued but a new smartphone called Google Pixel is available. The Google Pixel is a range of hardware devices ranging from smartphones, tablets, and even laptop computers. Other hardware devices that the company has created include virtual reality goggles called Google Daydream, a wireless router called Google WiFi and a smart wireless speaker called Google Home that uses Google Voice and some form of artificial intelligence. Today the website of Google is the most visited in the world. Many of its subsidiaries like Google and Gmail are also among the most visited. Google also owns the Android operating system which is a lightweight operating system used for mobile devices and cars. It is the most widely used operating system in the world.

Google operates in many countries in the world. This paper will focus on Google in the United States and China. In the United States, Google is the most visited website and the most used search engine. All the services of the company are available to the citizens and residents of the United States. In China, the company provides the same services as those provided in the United States. Google search is available in both countries but not as popular as it is in the US. Android, which is a product of Google is used to power many smartphones both in the US and in China. In the US, the company faces competition from Apple's iOS. The company faced competition in China from Apple. Today, however, many phone manufacturers in China are using Android OS to power their devices and this has taken away some of the market shares that Apple enjoyed in the past. Such companies like Oppo, Xiaomi and Vivo among others have surpassed iPhone by the popularity in China. All these devices are powered by Android. One reason for this is that Google's Android is free to use, unlike Apple's iOS which is not even available for licensing. Google, provides internet services in both countries but the usage in the two countries is different because of the nature of government and politics.

The internet industry in the two countries is different depending on where one is viewing it from. In the US, the industry is liberal but is made up of very big players like Facebook. This makes entry difficult. The Chinese market, on the other hand, is not an open one. One reason for this is the politics and the nature of government that the Chinese have adopted. Initially, many Chinese residents used Google services such as search. In fact, in 2009, Google had a market share of 36 percent in China. From 2013, however, the percentage of the market share that Google holds in China is less than 2 percent. Google search engine holds the first place in the US and this is due to many reasons such as Google being owned by America nationals. Another reason is the lack of internet censorship in the US. This is different from the Chinese internet industry market. The Chinese have put in place legislative and technological interventions referred to as the Great Firewall to control the use of the Internet. The Great Firewall is an undertaking by the Chinese government to censor the internet and ensure that the residents only consume the local content by blocking all foreign websites and mobile applications. The result is a low cross border traffic. One of the companies that were affected by this undertaking is Google. In 2010, due to the effects of the Great Firewall, Google moved its operations to Hong Kong from mainland China. Hong Kong and Macau are not affected by the laws and thus do not censor the Internet. The origin of this law is in the belief of the Chinese that the Internet, like the borders, are part of a country and therefore are sovereign and a governmental should have control over it. This gives the Chinese government the power to control them in whatever way they please. This is unlike the Western countries which have left the control of the internet to the users but have created laws to deal with people that commit crimes using the Internet or any technology provided by the Internet. While operating in China, Google has been forced to change the way it operates to align with the requirements of the Chinese government. Unlike, in other areas of the World including the US, China has a homegrown search engine called Baidu which is preferred to Google. In other matters like Android OS, Google faces no direct competition.

The US and China are both countries with large economies. The US has a population of more than 320 million people while China has a population of more than 1.38 billion people making it the highest populated in the world. The population of the US is almost one-quarter of the population of China. The GDP of the US is still, however, higher than that of China.

In the 1980s, China had a GDP of slightly more than 305 billion dollars while the GDP for the US was almost ten times that of China at 2.8 trillion dollars. In 1998 when Google was founded, the GDP of the US had grown to 9.1 trillion dollars while that of China had just hit the one trillion dollar mark. The gap between the GDP of the two countries had been increasing until 2006 when the gap began closing. By the end of this year, the GDP of China had increased to 2.8 trillion dollars, a figure that the US had 26 years before. On the other hand, the GDP of the United States had grown to 13.8 trillion dollars. The US had had a higher incremental GDP from 1980 to 2006. The IMF forecasts that the GDP of the US will reach 22 trillion dollars while China will hit 15 trillion dollars in 2020. The incremental GDP of China has been higher since 2006. IMF also forecasts that as the gap in the GDP of the two increases, so will their populations and thus the GDP per capita. The population difference between the two countries is expected to increase by more than 300 million people compared to the gap in 1980. The GDP per capita of the US is 67,000 dollars while that of China is close to 11,000 dollars. The current per capita GDP of China has not reached what the GDP per of the US was in 1980. However, despite the Chinese low GDP per capita, a comparison of the GDP Purchasing Power Parity shows that China is a bigger economy than the US. The US had always been ahead until 2014 when it was overtaken by China. IMF estimates put the Chinese GDP PPP at close to 30 trillion dollars while the US at slightly more than half of the Chinese value by 2020. The reason for the high purchasing power of the Chinese compared to the Americans is due to their population which is four times that of the US. Their rates of growth of GDP are 6.3 percent for China and 2.3 percent for the US. The inflation rate for the US is low having been less than 2 percent in 2018. The inflation rate of China, on the other hand, has been shaky partly due to the ongoing trade wars with the US. In February, the inflation was 1.7 percent while in May and June it rose to 2.7 percent. The unemployment rate of the two countries is nearly equal despite their large population difference. The employment of China was 3.61 percent in 2019 while that of the US was 3.7 percent in June of 2019. Despite the two countries having large economies, they still have budget deficits also referred to as general government balances. China, for example, has a balance of 6.23 percent. The above comparisons show that while the US is leading in most aspects of the economy, China is the best place for Google to focus on. This is because of the little penetration it has and the rapid growth of the Chinese economy. Due to its massive population, China has a higher purchasing power than the US despite its low GDP. The low unemployment rate coupled with the low rate of inflation means that many Chinese residents have money that they can use to spend on such things as Google services.

The fiscal policy is a country's tax policy. In the US, the people responsible for setting up the tax policy are the president and the Congress. The two most powerful individual offices are the office of the secretary of the treasury and the office of the president. The judiciary may influence the fiscal policies through court rulings such as declaring the legality of a policy undertaken by the executive arm. The US fiscal policy is supposed to enable the government to pay its debts and for personal defense. This means that the higher the debts of the federal government, the higher the taxes. With the total debt of the US being about 77 percent of the GDP, the tax rate is also bound to be high. The Chinese, due to their need to grow their economy is giving tax cuts to companies. This means that companies like Google will pay lower taxes in China than they would have paid. The tax cuts are meant to attract foreign investments like Google. The Chinese government also need to raise money to pay their debts. This is done through taxation. The Chinese tax rates will be lower than those of the US if this is the only factor that was to be considered. This is because the debts of the Chinese government is only 46 percent of their GDP. The US government has recently embarked on a mission to cut the interest rates so that the cost of lending is reduced. The Chinese are also preparing for an interest cut. The Chinese are cutting down interest rates so that they can empower small companies to sprout up and foster the development of the economy. From this information, it is clear that doing business in China is better than doing it in the US due to many policies that the Chinese government has put in place to encourage the development local companies and to attract foreign investments. The monetary and fiscal policies that the Chinese have put in place are very attractive to both domestic businesses and foreign businesses. This would have been a very attractive business environment for Google. But the nature of the business that Google involved in is the only limiting factor. The Great Firewall that the Chinese government created is meant to prevent companies like Google from developing in China. The Government censorship of the Internet is another factor that might Google from de...