Google stops censoring its search results in China

By John Letzing, MarketWatch

SAN FRANCISCO (MarketWatch) -- Google Inc.'s decision to brazenly challenge Internet censorship laws in China may encourage other firms doing business in the Middle Kingdom to adopt a bolder tone, industry experts say.

However, they say potential benefits of the rapidly-developing Chinese market mean that any emerging chorus of dissent against local laws -- or perceived local favoritism at the expense of foreign players -- could be slow to materialize.

Google (GOOG 557.50, -2.50, -0.45%) said Monday that it's decided to re-direct traffic away from its google.cn search engine to Hong Kong-based google.com.hk, where Chinese speakers may access unfiltered search results. See related story on Google in China.

PM Report: Google Stops Censoring in China

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It remains to be seen how long Internet users in mainland China will retain access to google.com.hk. The site's servers are based in Hong Kong, a special administrative region of China.

Google had been negotiating with Chinese authorities for weeks over the possibility of offering uncensored search results, since announcing in January that it had been hit with a sophisticated cyber-attack originating in China. Such a move would run afoul of Chinese laws, which mandate filtering out results related to politically-sensitive topics.

Since launching google.cn in 2006, Google has voluntarily offered a filtered search service. The company has captured a significant share of the Chinese search market, though it still lags well behind Beijing-based Baidu Inc. (BIDU 579.72, +10.07, +1.77%)

Google's move to stop censoring results drew a quick response on Monday, with state-run Chinese media citing an unnamed official at the State Council Information Office who called it "totally wrong."

Meanwhile a spokesman for the White House's National Security Council reportedly called the impasse between Google and the Chinese government disappointing.

"The U.S.-China relationship is mature enough to sustain differences," spokesman Mike Hammer reportedly said. U.S. Secretary of State Hillary Clinton has previously described China's Internet censorship policies as self-defeating.

"It's an amazing game of chess right now," said Jonathan Zittrain, a Harvard Law School professor and co-founder of Harvard's Berkman Center for Internet & Society.

Zittrain said the sheer boldness of Google's self-described "new approach to China" means that other foreign firms doing business there may be slow to follow. "There's no script for this," he said.

'Fight it out'

Google's move comes against a backdrop of increasing antagonism between U.S. and Chinese officials, Zittrain said. Companies may therefore simply wait for a clearer indication of how issues between governments will be resolved.

"They're all hunkered down right now, waiting for their parents to fight it out," Zittrain said of foreign firms operating in China.

Points of tension between the U.S. and China have included Internet censorship, onerous legal requirements for firms operating in China, and Beijing's valuation of the yuan.

In an open letter addressed to Treasury Secretary Timothy Geithner and Commerce Secretary Gary Locke published last week, a group of 130 U.S. lawmakers urged the administration to label China a currency manipulator. See related story on U.S. lawmakers' Chinese yuan letter.