CHINA- Michael Fertik is the founder and CEO of Reputation.com, an online privacy and reputation management company. He is a member of the World Economic Forum Agenda Council on Internet Security and recipient of the WEF Technology Pioneer 2011 Award. The opinions expressed are his own. -

China’s Internet is, in fact, the world’s largest intranet. This is not news to anyone who follows technology in the Middle Kingdom. The Chinese government doesn’t make any real attempt to hide its complete control over what happens behind the Great Firewall. The regime is open about its intent to ensure what it calls “harmony,” which more or less means that it will squelch civil debate that moves beyond a certain pitch or further than a few degrees off the median line. As China’s power grows online and offline, these patterns, taken together with the Chinese government’s technical sophistication, will be of fundamental importance to the overlap between digital freedom and privacy.

The Chinese play hard. They mean to keep their intranet secure and the integrity of their “harmonious” public web discourse intact. They do not hesitate to use their considerable technical prowess to spy on machines that are operated on their network.  As a friend of mine in U.S. intelligence circles says without hesitation, “If you go to China, there is a 100 percent chance that your equipment will be compromised.” Earlier this week here at the World Economic Forum (WEF) in Davos, I met a successful civil activist who routinely visits China for her work, and she casually reported a recent office visit from Chinese state security services who evinced specific and sweeping knowledge of her emails, calendar, and other information she keeps exclusively on her computer.

Astonishingly, despite its stated objectives of harmony and control, the Chinese have allowed or even encouraged an exploding Internet economy in their country. Of course, the user-generated web — comprised of online publishing tools, self-propelled video sites, and social media tools — is a potential powder keg for a government that cherishes conformity in its national conversation. But the Chinese government has adapted skillfully to the risks. They still sometimes resort to simple shutdown of antagonistic URLs. But their methods have become much more nuanced and powerful in recent years. They have effectively co-opted the power of user-generated content and distribution publication for their own interests.

Leaders of Chinese online media and commerce companies, including ones that have already gone public or filed for IPO in the U.S., have been fairly open about their relationships with their government. They describe the regime’s remarkably frank point of view: we want you to succeed, but not at the expense of harmony. In practice, that means that, if you play ball with Beijing’s running rules — if, for example, you remove user-generated content that criticizes the government’s response to an earthquake — you can survive and even become a billionaire. If not, you’d better move to the U.S. and try your business model again.