It seems all but inevitable that Google will not only close the doors on its google.cn search engine, but also its Chinese development offices as well. This is a tragic and preventable mistake.
Update: Google decides to stay after all
For thousands of years, China shut itself off from the rest of the world. What started as a simple fact of geographical isolation became tradition and then a source of pride. Ignored by most of the world for centuries, the Chinese people nevertheless demonstrated a tremendous capacity for innovation that is even now not fully appreciated.
Technology and politics eventually forced both sides to open up to each other, but history tells us that any mix of cultures should be done slowly to avoid shocks and mistrust. Nixon set the stage for a gradual, constructive engagement. Google would lead us off that stage. This is wrong, and short-sighted.
China is the most populous nation on Earth. Think about it: almost 1 of every 5 people alive today live in China. How can anyone almost 6,000 miles away appreciate the complexities of keeping such a large and diverse society together?
It's arrogant to believe that we know what's best for the Chinese people, and that the norms and values of our own culture will work as-is in such a different situation. And it's incredibly naive to believe that threats and ultimatums will have any positive effect, especially with such a proud and self-sufficient people. The opposite is much more likely.
Google's actions will only hurt Google, its shareholders, and those that depend on the Web 2.0 ecosystems Google has been nurturing. By closing the development offices, Google will lose a lifeline into a vibrant economy and culture, one that that it desperately needs to understand and leverage in order to continue its historic growth in the years ahead. This lack of understanding was plain in the way Google made its decision - unilaterally and without even consulting its experts inside China. You need those people, Google, and so do we. So please swallow your own pride and reconsider before abandoning them.