Google reroutes China search, Beijing lashes back

SAN FRANCISCO (Reuters) – Google Inc closed its China-based search service and began redirecting Web searchers to an uncensored portal in Hong Kong, drawing harsh comments from Beijing that raised doubts about the company’s future in the world’s largest Internet market.

Google said it intends to continue research and development in China, as well as maintain a sales staff there, even after closing Google.cn and rerouting traffic to the unfiltered search site in Hong Kong.

The decision comes amid heightened tensions between Beijing and Washington over a range of issues, from Internet freedom to the yuan exchange rate, economic sanctions on Iran and US weapons sales to Taiwan.

China reacted to Google’s move by saying the Internet search giant was “totally wrong” and had “violated the written promise it made on entering the Chinese market,” signaling a tough line over the dispute.

Analysts said it was possible Google’s plans for other services in China, such as its Android smartphone software, could be endangered by this move, which moves the burden of censoring Google search results to Chinese authorities.

“We don’t see this as reducing tension. We see this as increasing or ratcheting up tension between the two parties,” said Colin Gillis, analyst at BGC Financial. “You sort of make China look like the bad guy and you think you’re going to be selling Google phones? Good luck, we’ll see how that goes.”

Google had declared in January that it would stop censoring search results in response to what it said was a sophisticated cyber attack that it traced to China and increasing limits of freedom of expression during the past year.

“Figuring out how to make good on our promise to stop censoring search on Google.cn has been hard,” Google Chief Legal Officer David Drummond wrote in a blog post yesterday.

“We want as many people in the world as possible to have access to our services, including users in mainland China, yet the Chinese government has been crystal clear throughout our discussions that self-censorship is a non-negotiable legal requirement,” he said.

For the average mainland Chinese, the rerouting of search queries to google.com.hk is unlikely to make much difference unless they can get around government-imposed firewalls that block searches for sensitive topics like the Dalai Lama.

The White House said it was disappointed that Google and the Chinese government were unable to reach an agreement that would allow the Internet company to continue operating its search services in China.

Mike Hammer, spokesman for President Barack Obama’s National Security Council, said the United States opposes censorship and is committed to Internet freedom, but stressed that the White House did not anticipate this issue would cloud relations between the two nations in other areas.

“The US-China relationship is mature enough to sustain differences, and while we seek to expand cooperation on issues of mutual interest with China, we will candidly and frankly address areas of disagreement,” he said.

China represents an important growth opportunity for Google, which has seen its growth slow in mature markets like the United States and Western Europe, even though it generates only a small portion of its nearly $24 billion annual revenue.