China vs Google: the Denouement

UPDATE2: Washington Post calls decision a watershed, Android is delayed on China Mobile, etc.
UPDATE: Google moved its search  site to HongKong where it can deliver uncensored searches.
What is uncertain is how China will react. China already blocks YouTube will it do the same for Google Maps, Apps, and Voice? What happens with Google Android and ChromeOS? HongKong searches get filtered/censored as they  enter China.

Google will likely announce today, this week at the latest, that it is going to shutter its operations in China – 1/6th of the world’s population at 1.3B and 400  million already having an Internet connection. The ostensible reason is that  Google no longer wants to censor its searches[and in laughable parody of  its toady self, Microsoft declares itself ready, willing and able to do all that is necessary to censor its Bing searches in China]. I suspect there is much more deep substance to this conundrum and it centers around IP- Intellectual Property theft , Chinese state sponsorship of favored industries, continued  Chinese consumer and cyber piracy, plus  distrust on both sides of political interference.   So lets do a quick toting up of winners and losers:
Google – gaining significant  market share against leader Baidu just before Jan 12, 2010 hack attack
1)loses huge Chinese search market [ something it was preordained to lose?];
2)loses market access for other Google products and services in China. Think Google Apps, Android phones, Chrome OS, Google TV, Google Voice, etc;
3)gains notice in other jurisdictions that Google wont play in markets with one hand tied behind its back;
4)gains new luster for its “do no evil” marching orders??
China – aspiring to be what Taiwan, South Korea, and Japan are – top tier, high margin industry leaders
1)gets to keep censoring its population’s access to full information[very dangerous lagoon over the long haul];
2)gets to keep its favored industries economic policy largely unchanged;
3)loses its luster as as a place where high IP investments can be made safely and profitably;
Given that China has the problem of sustaining a high growth economy for likely  10 more years to bring the other 2/3rd of its population into some semblance of prosperity, the loss of 3) is not small. China has already raised the ire of many developing as well as developed countries with its artificially low peg of its national currency – wiping out industries not just in North America but also in Asia, Africa, and Europe.
Google will have to content itself with not reaching 1/6th of the world population accept through the mechanism of knockoff copies Made in China. But already companies as diverse as Twitter, eBay, Facebook, Skype, and others have either been handed that decision to them by the Chinese Government or reached the conclusion that Google is now – playing as a Business in China likely means having at least one hand tied behind your back versus Chinese competitors.  Finally if one is looking for a cause of another double dip into recession, the China vs Google/IP vs Low Currency Peg – could be the match that lights the fire and nobody in the World comes out a winner.<hr> For a witty, play by play coverage of  China vs Google events – checkout the D | All Things Digital.

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