What should U.S. technology companies do about China?

The question hasn't been completely resolved, and it's back in the news now that the Human Rights Law Foundation is suing Cisco Systems Inc., accusing the company of helping China put up Golden Shield, the government's firewall and surveillance network that was used to track members of Falun Gong.

The news was reported by outlets Monday including The Wall Street Journal (registration required) and The New York Times (registration possibly required).

Cisco has been criticized for its China dealings before, but this lawsuit challenges Cisco's repeated claims that it didn't design or customize anything for the Chinese government. That would shatter the argument, used by plenty of companies, that vendors have no control over what China does with its networks -- an argument that always felt disingenuous. (See China Censorship Debate Circles Cisco .)

Still, it seems unreasonable to just cut off business with China. In defending their practices, Microsoft Corp. and others have argued that the spread of technology has a long-term liberating effect. It's another oily rationalization, and I don't like it -- and yet, it has a germ of truth in it.

I keep thinking about Wired's November report about dissidents putting cracks in China's firewall. It would be better to not build the firewall in the first place, yes, but even in crippled form, the Internet is opening the channels of free speech.

China's only real option would be to disconnect, and that's not going to happen. China's relationships with the rest of the world have grown too deep. Those relationships are based heavily on commerce. It might be distasteful to know that U.S. companies are contributing to China's networks, but stopping the flow of business doesn't seem like the right response.

At the same time, there's a line that shouldn't be crossed, and Cisco might have gone there. It was bad enough when that Cisco presentation got leaked a few years ago, with "The Golden Shield Project" in the title, and the quoting of the Chinese party line that Falun Gong is an "evil religion."

That could be shrugged off as poor judgement, but if the accusations in the new lawsuit are correct, Cisco, like Yahoo Inc. before it, has a lot more to answer to.

Regardless of how the case turns out, the Human Rights Law Foundation has achieved its first goal: attention. We're getting reminded that some of the big questions around business in China are still lingering. This is complicated moral ground, and it would be good to hear more companies acknowledge that problem, even if they don't yet have the solutions.

— Craig Matsumoto, West Coast Editor, Light Reading