Google’s exit from the Chinese market is now a near-certainty, according to a newspaper report, following weeks of speculation regarding its stance on the country.
A source familiar with the matter told the Financial Times that the search giant’s proposed departure from China is now "99% certain" to go ahead.
Google has been embroiled in an ongoing feud with the Chinese government since mid-January, when an executive announced on the company’s official blog that it was no longer willing to censor search results in the country, as required by local authorities, following a cyberattack on its intellectual property. At the time, it admitted that this could result in the company pulling out of the Chinese market.
If [Google] takes steps that violate Chinese laws, that would be unfriendly, that would be irresponsible, and they would have to bear the consequences,” Li Yizhong, China’s minister for industry and information technology, told the Financial Times on Friday.
At present, Google is a distant second in terms of numbers of Chinese users, holding approximately 36% of market share, compared to local player Baidu’s 58%, according to statistics from Beijing-based researcher Analysis International.
Meanwhile, Chinese and US officials clashed this week over the Communist country’s currency value, which critics say is being kept artificially low by the government in order to protect exports. A group of US lawmakers wrote a letter to President Obama calling for him to put pressure on China to cease what it describes as "currency manipulation".
The impact of China’s currency manipulation on the U.S. economy cannot be overstated," the letter says. "Maintaining its currency at a devalued exchange rate provides a subsidy to Chinese companies and unfairly disadvantages foreign competitors."
China’s government is unrepentent. "Some say China has got more arrogant and tough," said China’s premier Wen Jibao. "Some put forward the theory of China’s so-called ‘triumphalism’. My conscience is untainted despite slanders from outside."
In the unlikely event that China were to revalue its currency, it could have adverse affects on IT buying organisations, as a lot of hardware is built in the country and it is an increasingly popular research and development destination for US IT companies, including Google.