Google Ready to Make China Decision

Google expects an outcome soon from its talks with China over a censorship and hacking dispute, Chief Executive Eric Schmidt said on Wednesday.

Google threatened in January to shut its Chinese portal and to pull back from China, citing problems of censorship and a hacking attack from within the country.

“I’m going to use the word ‘soon’, which I will not define otherwise,” Schmidt told journalists at the Abu Dhabi Media Summit.

“There is no specific timetable. Something will happen soon,” he added, without elaborating.

Chinese officials have said they were working with Google (NASDAQ: GOOG) to resolve the dispute.

Google shocked business and political circles when it declared on January 12 it would stop censoring Chinese search results, and said it was considering pulling out of the country.

Google said in January it had detected a cyber attack originating from China on its corporate infrastructure that resulted in the theft of its intellectual property.

Google said more than 20 other companies had been infiltrated, and cited the attack, as well as Chinese Web censorship practices, as reasons for the company to consider pulling out of the country.

In Washington, a second Google executive said the world’s largest search engine had not changed its decision to stop censoring its Chinese language search site in compliance with Beijing’s dictates even if it means leaving that market.

Nicole Wong, the firm’s vice president and deputy general counsel, told the U.S. House of Representatives Foreign Affairs Committee that Google would stop censorship and “(if) the option is that we will shutter our .cn property and leave the country, we are prepared to do that.”

Searches of the site turn up vastly different results for sensitive subjects such as “Tibet” and “Tiananmen” than the search engine’s sites outside China.

WTO case debated

Wong told the congressional hearing on U.S. cyberspace policy that Google’s decisions on dealing with Chinese hacking and censorship were taken by American executives without the involvement of employees in China. But she said Google was moving cautiously, in part out of concern for its hundreds of Chinese employees.

She urged lawmakers to ensure that the U.S. government presses international Internet openness as a priority in diplomatic, trade and development policies and work with like-minded governments to craft rules to ensure free flows of information.

The top U.S. trade official said the government was studying whether it could legally challenge those restrictions, which also hurt other U.S. firms operating in China.

But Schmidt said any possible appeal by Washington to the World Trade Organization to challenge Chinese Internet restrictions would not affect Google’s actions.

“Google’s discussions are with the Chinese government and are not related to the U.S. government. The U.S. government is doing its thing, unrelated to Google,” Schmidt said.

A Chinese adviser on trade strategy said in an opinion piece that the United States would not have any standing to bring a case against Chinese Internet restrictions to the WTO.

WTO rules state that countries have the right to censor Internet content, Zheng Zhihai, deputy director and general secretary of the China Society of World Trade Organization Studies, wrote in China Daily.

“If someone intends to challenge China’s right to govern its Internet by resorting to WTO rules, they are apparently misguided and bound to fail,” wrote Zheng, whose organization reports to China’s Ministry of Commerce.

The WTO ruled last year that China’s import monopolies on books, films and other entertainment materials violated market access rules, but upheld its right to censor specific materials.

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