Google has stopped censoring its search results in China, ignoring warnings by the country's authorities. The US company said its Chinese users would be redirected to the uncensored pages of its Hong Kong website. In January, Google had complained about a "sophisticated cyber attack originating from China". China accused Google of violating a "written promise" it made when entering the market to abide by laws requiring it to filter its search service.
A Chinese official was quoted by the state-run Xinhua news agency as saying Google's decision to ignore the promise regarding its Chinese-language search portal Google.cn was "totally wrong". The White House said it was dismayed that Google and China had not been able to resolve their differences. US National Security spokesman Mike Hammer said: "We are disappointed that Google and the Chinese government were unable to reach an agreement that would allow Google to continue operating its search services in China on its Google.cn website." Chinese government officials had warned Google repeatedly that it would face consequences if it did not comply with the country's censorship rules. In a blog post, the company said the Chinese government had been "crystal clear throughout our discussions that self-censorship is a non-negotiable legal requirement".
Google's chief legal officer, David Drummond, said that providing "uncensored search" from Google.com.hk was "a sensible solution to the challenges we've faced - it's entirely legal and will meaningfully increase access to information for people in China". It said there might be some service slowdowns and delays in getting search results while it beefs up resources to handle the re-directed queries. "We very much hope that the Chinese government respects our decision, though we are well aware that it could at any time block access to our services," Mr Drummond wrote in the blog post. He added that Google would carefully monitor access and provide regular updates via a dedicated page to show what was available via its services in mainland China.
One cause of the row was Google's revelation on 12 January that it - and more than 20 other companies - had been the victim of a cyber attack that originated inside China. During the attack Google lost some intellectual property and discovered that the attack was aimed at the GMail accounts of human rights activists. This attack led Google to "review the feasibility" of its Chinese operations.
In the blog entry posted on 22 March, Google said it would maintain an R&D and sales presence in China. It said the size of its sales team would depend on how many Chinese people can get at the Hong Kong-based site. Currently about 700 of Google's 20,000 strong workforce are based in China.
On Sunday, state media in China had attacked Google for what they described as the company's "intricate ties" with the US government. Google provided US intelligence agencies with a record of its search engine results, Xinhua said. While Google is the world's most popular search engine, it is a distant number two in the Chinese market, which is dominated by Baidu. However, because of the size and growth rate of China's internet population, any loss of business there is likely to harm Google's future growth prospects.
Analysts said that initially Google's prospects would not be dented by shutting down Google.cn as it is responsible, at most, for 2% of its annual $24bn (£15.9bn) revenue. "Near-term, not that big a deal," said Tim Ghriskey, chief investment officer at Solaris Asset Management. "Long-term, if this stays in place, it's a negative. China is certainly a great growth opportunity." China operates one of the most sophisticated and wide-reaching censorship systems in the world. Thousands of police officers are employed to monitor web activity and many automated systems watch blogs, chat rooms and other sites to ensure that banned subjects, such as Tiananmen Square, are not discussed.