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Ongoing War Between China and Google Escalating

Last June, the ongoing war between China and Google escalated when Google accused Chinese hackers based in China of hijacking hundreds of Gmail accounts that included those belonging to US and South Korean government officials along with mainland Chinese activists and journalists. The latest accusations, which China has angrily denied, is the second public spat between Google and Beijing – further adding to the uncertainty over the future of Google in the world’s biggest online market.

Google’s Early History in China

Google China was formed  in 2005 and started out with a bang when Microsoft executive Kai-Fu Lee was pooched with a compensation package worth $13 million (including a $2.5 million signing bonus). Microsoft sued both Google and Kai-Fu Lee but later a confidential settlement was reached where restrictions on the activities of Kai-Fu Lee were lifted the following year.

In the same year of its founding, Google developed a Chinese-language interface and in 2006, the China-based google.cn search page, which had results subject to censorship by the Chinese government, was also launched. However, Google’s agreement to adhere to China’s censorship policies would spark considerable controversy outside of China from the very beginning. On the other hand, its also worth noting that Google was always the only major search engine operating in China that would implicitly inform a user if and when Internet
search results were being censored.

From Trench Warfare to Open Warfare

Nevertheless, Google would also make serious mistakes when it came to handling government relations in China. Initially, Google hired an executive from Sina to handle government relations but when it was discovered that she had given iPods as gifts to Chinese officials, a clear violation of Google’s company policies and US laws but a common practice in China, she was dismissed. However, it should be noted that she had reportedly complained to a colleague that Google was not being flexible enough when it came to dealing with the Chinese government and the company was not working hard enough to please it.

Moreover, trench warfare would soon begin between Google and the Chinese government. When a Chinese government ministry demanded that Google needed to take down 10 links, Google would instead take down seven, hope for a compromise and then sometimes quietly restore the missing links a few weeks latter. Google’s China policy review committee would also meet every 5 months to ensure that Google China was keeping filtering to a minimum. 

However and during the run-up to the 2008 Summer Olympics, China began to make more and more censorship demands. And while other Internet search engines complied, Google stalled in the hopes that the Chinese government would back down. It proved to be a big miscalculation as instead, the Chinese government began to counterattack. 

In 2009, the official Chinese media began to report that Google was disseminating obscene information and the Chinese government began to impose administrative penalties on Google China. The Chinese government also demanded that Google China start to reinforce government Internet censorship policies.

However and in January 2010, Google alleged that its servers were hacked in an attempt to gain access to information about Chinese dissidents. Hence, Google announced that they would no longer censor their results on Google.cn. When talks with the Chinese government failed to resolve the matter, its censorship complying Google China service was redirected to its Google Hong Kong service – outside the jurisdiction of Mainland China’s censorship laws. 

Google’s Future in China

Kai-Fu Lee has since been quoted as saying that the trend in China over the next 20 or 30 years will be towards more openness and that the incidents that caused Google to retreat there were a mere “perturbation” because in hindsight, China’s current leaders had reached the limits of what they could tolerate. He further noted that the younger generation in China will soon be in charge and that this generation is more open minded, American-trained and they have experience working in the private sector. Hence, things will be different in the
near future. Until then though, Google has clearly been forced to sound the retreat in China.

To learn more about Google China’s early beginnings and its rocky relationship with the Chinese government, check out Inside Google’s China misfortune which appeared in an April issues of Fortune Magazine.

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