Google, not blocked in China, still faces risks

Offering Chinese search service from Hong Kong has not thwarted government censorship

Ten days after Google snubbed Chinese government censors by moving its search engine there to Hong Kong, its Web search service remains unblocked in China. But the move could yet cost Google substantial business, and already offering services to Chinese users from outside of the country has proved an imperfect counter to government censorship.

"I'm not surprised that it hasn't been blocked," said Duncan Clark, chairman of technology consultancy BDA. "Both sides probably don't want the thing to rumble on in any high-profile way."

But the impact of Google's move on its business could grow as time passes. China could still choose to block or, the company's Hong Kong site, and Google will have to work to retain Chinese customers paying for ads on international Google sites.

"If it's slow, that's almost worse than being blocked," said Clark. "Advertisers hate uncertainty."

Google began redirecting users to its Hong Kong site from its old China-based search engine,, during the early morning in China on March 23. China was quick to slam the move as "totally wrong," but it has not blocked access to the Hong Kong site as users feared and as Google warned was possible.

Google has still seen some fallout. At least one Chinese company using Google search on its Web site, portal owner Tom Online, has switched to rival search provider Google said China began partially blocking Google mobile services on Sunday, and local mobile carrier China Unicom has said it does not plan to put Google search on its mobile phones.

The string of events reflects long-standing tension between foreign companies and the Chinese government in an onerous and often confusing regulatory environment. China requires Internet companies to self-censor on their Web sites for politically sensitive, pornographic and other content. Google has said its move out of China was partly a reaction to growing efforts to limit free speech online.

Even basic communication with the Chinese government about its expectations can be scant. Google first announced on Jan. 12 its plan to stop censoring and its hope to hold talks with the government. Google was granted just two sessions, one in late January and another four weeks later, after repeated pleas from the company, according to China's state-run Xinhua news agency.

Still, Google angered Chinese authorities by making its complaints public. "It's possible for companies here to work with the government and work around issues if there's a vested interest for both parties," said Ben Cavender, senior analyst at China Market Research Group in Shanghai. "But if you bring it out into a public forum, the government's not going to be willing to lose face like that and step down."

"You have to work within the rules, and if you don't, the government is going to make you follow the rules, whether that means shutting you down or censoring or something else."

Some observers have called for other foreign technology companies to follow Google in defying Chinese censorship policies. Borrowing Google's model of offering services from outside China is one possible approach for other companies like Microsoft, which operates the Bing search engine.

Growing international bandwidth would make it easier than in the past for companies to serve China from abroad, but the challenge would be staying tuned into the demands of Chinese consumers from a foreign base, said Clark of BDA. Google appears to want to tackle that problem with its plans to keep sales and research and development teams in China.

But companies that operate outside China may be at greater risk of being blocked by the government, which already bars Web sites including Twitter and Facebook. Internet companies inside China's borders are more subject to government pressure via a licensing system for Internet content providers.

Google's move to Hong Kong also has not fully thwarted Chinese government censorship. The search engine itself has stopped censoring sensitive political content for Chinese users, such as sympathetic discussion of the 1989 democracy protests in Beijing's Tiananmen Square, which were crushed by Chinese troops.

But Google's Hong Kong site is still subject to censorship at China's border, where government systems monitor and disrupt Internet traffic that contains sensitive keywords. While Google isn't filtering political content, Chinese users searching for terms like "Tiananmen" are still sometimes unable to load a results screen.

On Tuesday this week, users also had trouble accessing Google search at all, apparently due to a temporary change in China's filtering practices, according to Google.

It was unclear if those access issues were an act of government retribution. China has given little hint if it will accept Google serving Chinese users from beyond the reach of regulators.

"The movie's not over yet," Clark said.

(Sumner Lemon in Singapore contributed to this report.)

Copyright © 2010 IDG Communications, Inc.

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