Between the Lines

Larry Dignan, Andrew Nusca and Rachel King

Google nixes China search site; Sales and R&D to stay

By | March 22, 2010, 12:40pm PDT

Summary: Google said it has redirected it’s Chinese site to its uncensored Hong Kong site but will stay in China for sales and R&D purposes.

Special Report: Google-China

Updated: In a business and diplomatic showdown with China, Google has found a way to stop censoring its search results yet keep a presence in the country.

Google said Monday that it has stopped censoring its search services - Search, News and Images - on Google.cn, its site in China, and that users are now being redirected to Google.com.hk, its Hong Kong site, where it is “offering uncensored search in simplified Chinese, specifically designed for users in mainland China and delivered via our servers in Hong Kong.”

It’s unclear, however, how long any Web surfers in China will have access to uncensored results. And Google has already warned that increased traffic could result in a slowdown or even no access as the switchover occurs.

The company said in a blog post that making good on its promise to stop censoring search on Google.cn has been tough. In that post, the company explained that it sees the switch to the Hong King site as a legal way of increasing access to information for the people in China. However, the company noted that the Chinese government could block access at any time.

From the post:

We want as many people in the world as possible to have access to our services, including users in mainland China, yet the Chinese government has been crystal clear throughout our discussions that self-censorship is a non-negotiable legal requirement. We believe this new approach of providing uncensored search in simplified Chinese from Google.com.hk is a sensible solution to the challenges we’ve faced—it’s entirely legal and will meaningfully increase access to information for people in China. We very much hope that the Chinese government respects our decision, though we are well aware that it could at any time block access to our services. We will therefore be carefully monitoring access issues, and have created this new web page, which we will update regularly each day, so that everyone can see which Google services are available in China.

It’s not a full pull-out of China for Google, though. The company said it will continue R&D work in China and maintain a sales presence, though the size of the team would be depend on whether government officials allowed access to the Hong Kong site. It also stressed that all decisions about Google and China were those of executives in the U.S. and had nothing to do with employees of the company in China.

Also: Ed Burnette: Why Google should stay in China

Special Report: Google, China showdown

Analysts were handicapping Google’s potential shutdown of the Google.cn site ahead of the announcement. Jefferies analyst Youssef Squali said that a full exit would have no short-term impact on Google’s financial results. The long-term strategic hit, however, could hurt.

Squali said that China accounts for $250 million to $350 million, or 1 to 2 percent of Google’s net revenue. In the long-run, China has the world’s largest Internet user base at about 400 million.

Meanwhile, Squali added that China wasn’t going to change its policies for Google. Overall, it’s unclear whether China will allow Google.hk to be visible in the country.

For now, Google has a dashboard detailing its services in China—the list is subject to change.

The history:

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Sam has been a technology and business blogger for more than 18 years.

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Sam Diaz

Sam Diaz has nothing to disclose.

Biography

Sam Diaz

Sam has been a technology and business blogger, reporter and editor at ZDNet, the Washington Post, San Jose Mercury News and Fresno Bee for more than 18 years. He's a member of the National Association of Hispanic Journalists and a graduate of California State University, Fresno.

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RE: Google stops censoring China search site; Sales and R&D to stay
cool_weightlosspills 23rd Aug
Utterly ascend after that your conclusion before the bank of weight loss pills.
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I can't imagine China will aloow it for long.
No_Ax_to_Grind 22nd Mar 2010
I am also surprised they are allowing Google to continue with other operations in China. My bet is that as soon as they see Google trying to side step them everything gets much worse.
...without problems with its stakeholders.

For one, they can camouflage their censorship as a form of "child protection against porn" or other euphemism, we all know is fake. (Its like calling "Prisoners-of-War", "Enemy Combatants" to avoid Geneva or disguise censorship as "Export control" done by you know who).

But blocking a foreign site, just for being open is clear censorship which, as I see it, won't be tolerated by the U.S.A. or the E.U. which, let's face it, are the main drivers for China's ascent.

Don't be fooled, China wants to be a superpower but is too rookie and too centrally directed to be able to achieve it without a mayor shake up. (Just remember that the U.S.S.R. [far greater and more powerful] thought differently and eventually collapsed by its own Perestroika).
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enemy combatents
RadicalYellowDuck 22nd Mar 2010
Your analogy is flawed.

Prisoners of War, as defined by article 4 of the geneva conventions are;

(a) That of being commanded by a person responsible for his subordinates;

(b) That of having a fixed distinctive sign recognizable at a distance;

(c) That of carrying arms openly;

(d) That of conducting their operations in accordance with the laws and customs of war.

Enemy combatants violate at least section b of article 4 of the convention and are therefore not subject to the protections of the convention regarding prisoners of war.

Traditionally those caught carrying arms without a proper uniform are executed as spies. That we have refrained from doing so with those we capture is a sign of our restraint, and respect for life. Our enemies have no such restraint or respect.
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A very civilized measured response..
JCitizen 27th Mar 2010
You're not so "radical" Yellow Duck!

I totally agree, as well!
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Are you serious?
capam2k2@... 22nd Mar 2010
The Chinese government is famous for human rights and censorship issues. Yet, the US and China's other trading partners, ignore those conflicts so that their businesses can gain access to the Chinese economy and increase their respective GNP's.

Oh yes, every now and then, to appease human rights groups, the world governments affirm their commitment to encourage change in China. However, it's fairly obvious that China's trading partners will not jeopardize their business relationships by speaking too forcefully.

I don't get the comparison between Perestroika and China's Economic Reform; the two movements are fundamentally different. China's central direction is the precise reason why it is prospering right now. The government is able to push economic reforms to the point where China IS an economic world power. The GDP per capita is still not at US levels, but China is on track for continued growth to get there.

China is the country with the greatest potential for growth, and every company, including Google, will do whatever it takes to get a piece of the action. Hence, the google.hk move.
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Chinese Economy
Olorin_z 22nd Mar 2010
It is like the argument about benevolent dictatorship. A really intelligent central control may consistently outpace a free enterprise culture where there is a lot of waste due to competition. However, if the central direction does not remain intelligent, the progress may be slowed.

The Soviet system was centrally directed, and I don't think that consistently worked well.

It did occur to me that if they had not killed a lot of the most intelligent and educated people during the cultural revolution, their progress might be even faster, or have started sooner.
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USSR vs China
lehnerus2000 24th Mar 2010
The USSR collapsed because it ran out of money.
Nobody would trade with the USSR. Everybody trades with China.

The Chinese Government was smart enough to make their country, the "World's Factory". Aided by corrupt businesses & politicians, who allowed all of our factories to close, because of their commitment to "Free Trade".

lehnerus2000
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Corruption is symptomatic of...
smdunn Updated - 25th Mar 2010
the psychopaths in business and politics. This is NOT JUST about the
serial killers, career criminals (in prison), or abusers of children. They
exist, and clearly cause the obvious problems.

This IS about those businesses that pursue profit and control, and
only profit and control, and damn any other consequences (economic,
environmental, health, innovation (or lack thereof), international
conflict, social distress or otherwise).

This IS about those politicians and governments that pursue agendas
detrimental to a good, loving, comfortable and peaceful existence
(e.g., think about those politicians whom send sons and daughters of
voters overseas to fight and die or worse, for the prestige or pride,
profit and control of a corporation (often referred to as a country)).

quote

Using his law enforcement experience and data drawn from the FBI's
behavioral analysis unit, Jim Kouri has collected a series of personality
traits common to a couple of professions.

Kouri, who's a vice president of the National Assn. of Chiefs of Police,
has assembled traits such as superficial charm, an exaggerated sense
of self-worth, glibness, lying, lack of remorse and manipulation of
others.

These traits, Kouri points out in his analysis, are common to
psychopathic serial killers.

But - and here's the part that may spark some controversy and
defensive discussion - these traits are also common to American
politicians. (Maybe you already suspected.)

Our elected officials often show many of the exact same character
traits as criminal nut-jobs, who run from police but not for office.

Kouri notes that these criminals are psychologically capable of
committing their dirty deeds free of any concern for social, moral or
legal consequences and with absolutely no remorse.

unquote

http://www.thetruthseeker.co.uk/article.asp?ID=10917

This IS ALSO about those voters who continue to vote these
psychopaths into office, or buy goods and services from businesses
with a psychopathic bent.

Apparently, psychopathic behaviour is largely learnt. That is how it
moves from generation to generation, or business to business. A
victim can become a psychopath and affect many others (creating
more victims). It can be contagious.

Talk about a sick society (or societies).

Democracy may well be a sham. But psychopaths have a lot to answer
for. Including censorship (the 'I want total control over you' syndrome).

Some say the number of psychopaths in Britain number 1 in 200.

http://topdocumentaryfilms.com/psychopath/

Whilst the number in the United States of America is closer to 1 in 38.

http://www.magicreal.com.au/filmandtv.php?film=4

One wonders how many psychopaths are in China? Russia?

Or in your neighbourhood?

Free trade is not free. Conditions apply.

And every country in existence today is actually a corporation.

http://www.sec.gov/edgar/searchedgar/companysearch.html

They're legal fictions. But these psychopaths and the corporations with
a psychopathic bent are making big bucks off you and your birth
certificate.

quote

Cusip uses you SS# to identify you because the birth certificate is an
investment security. All these are registered at state level with
department of human resources, then to department of commerce at
federal level, and the to the DTC (Depository Trust Corporation on
Water Street. CUSIP is a trademark of Standard and Poor. It is located
under the DTC building at 55 Water Street in New York City. The 9
digit cusip is also used for isid (international numbering system).

unquote

http://loveforlife.com.au/content/07/10/16/gene-keating-
workshop-courts-bid-bonds-who-makes-money-you-ucc-filing

Salute a national flag, is saluting (and subjecting oneself) to that
corporation (and its rules).

Psychopathy.

Go figure.


Postscript:

Whatever happened to the idea that everyone is equal before the law?

The 'control freaks' censored education.

What was common knowledge and accepted three or four generations
ago is now viewed as an extremist position not worth thinking about,
let alone actually doing.
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The blurr between national and corporate...
JCitizen Updated - 28th Mar 2010
is scary to most folks. There is no doubt as world class corporations get bigger, that they actually form a world government of sorts. They definitely have a LOT of say in each country they operated in. Some suggests too much influence.

A nation is another corporation, or cooperation(not really different); however I feel in most instances the nationalistic boarders are stronger than the corporate boarders. Very few folks love their corporation, that they work for, many folks love to fawn over their country. The allegiance is strong in many folks in most countries I believe.
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Deleted by author(double post)
JCitizen Updated - 27th Mar 2010
These have been happening a lot more lately, despite my efforts to prevent it. Something goofy is going on with this site. confused
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They are also held up as role-models!
lehnerus2000 28th Mar 2010
Thus inflating their self-importance and exacerbating their behaviour.

lehnerus2000
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has done more to develop China than the economic policies pushed by the World Bank from Washington on much of the world that needed development. Just look at the number of countries now establishing "development partnerships" with China - the West (now politically correctly called "North") had its chance with the World Bank and blew it. 1989 saw the end of any threat from the USSR, and China is now stepping in to a niche market. I would call that "free market enterprise" myself - offering assistance where the West just couldn't see past the stupidity of their bankers' ideologies. And in case the West didn't get the message after the failure of the World Bank's Structural Adjustment Programs, why, we had the repeat performance last year...
How empires crumble and new empires begin.
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Of course they can
LarsDennert 22nd Mar 2010
China can block access to any site including google.com.hk However, they can only block it for people within China. They can't prevent people in the USA from seeing sites in other places. China has gateway filters for data requests outside mainland China.
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Blocking a foreign site???
Bradish@... 23rd Mar 2010
What are you talking about. Hong Kong is China and China will simply block mainland access to the site in HKG which they can do. Those outside of china (which includes Hong Kong and Macau) can have all the access they want to google.com/hk but then so what?
In this case google is just trying to save face whilst the Chinese government maintains its original position without change. Basically all that has changed is that google has gone from 'self-censorship' to the normal censorship that china practices on external sites.
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You Gotta Be Kidding!
diqiuren 23rd Mar 2010
Wow, I suppose you think the Fed is run by US Treasury? China is not the old USSR. How many times have you lived in China? I've lived in the US. I live in China now. If it wasn't for China buying US Treasury notes at $100Million a month for the past 3 years there'd be none of what the US, UK and Europe have now. Zero. I buy a linen shirt here for USD$4 that I have to pay USD$200 in any western city. If I buy them buy the 10,000 I can get them for a UD$1, so who's making the $s? BINGO, yes, you got it, your compratiots.
Do yourself a a favour and google the CFR - the Council on Foreign Relations. Check out the City of London while you are there and the Bildeberg group. Also go look for the Fool Me Twice Vidoes on how Mossad, the CIA and Asio detonated nuclear devices in Bali and Jakarta. Why was the Bin Laden family escorted out of the US in their private jet on 10/11??? When all else was grounded. Osama Bin Laden, Bin Laden. Got the connection??? Come on smell the grass.
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ASIO caused the Bali bombings?
Cyberjester 24th Mar 2010
I OBJECT!! ASIO is an aussie intelligence agency, we're not that good. =P
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yep
neeeko 24th Mar 2010
AMEN to that.

But brainwashed people will call you crazy or paranoid, thats why they were brainwashed programmed for...

Nobody wants to wake up watching TV
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stakeholders???
DragonAX 23rd Mar 2010
I thought the US OWED China about 2 Trillion dollars...?
Since when did debtors have a say in what their money bags do?
Utterly ascend after that your conclusion before the bank of weight loss pills.
GREAT GOOGLE!!! I love you...
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great move!
Linux Geek 22nd Mar 2010
only an innovative company can put the customers first and allow freedom of information thanks to a loophole.
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Why?
Rama.NET 22nd Mar 2010
if they are so American, why can't they move their R&D totally here into US? I see they want to use cheap labor, thanks to loophole.
--Ram--
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How so?
No_Ax_to_Grind 22nd Mar 2010
You do understand Hong Kong belongs to China right? You do understand how simple it is to block it right? You do uinderstnad the people in China really don't care and use other search engines far more than Google, right?
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because
Linux Geek 22nd Mar 2010
the law allows redirecting to sites outside the country.
If China interfere with hong kong's site, Google or DoJ can sue them for trade violations.
If hong kong is under China, Google can redirect to taiwan or just create a generic cantonese site without a country assigment.
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don't think so
Rama.NET Updated - 23rd Mar 2010
Google or DoJ can't sue them, only thing they can take to WTO and/or G-
20 summit. It is not that easy path to reach out and block China.
--Ram--
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Sue them?
lehnerus2000 24th Mar 2010
How are you going to make them pay up?
China has "nukes" and ICBMs.

lehnerus2000
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Wouldn't they forbid this action ?
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Multiple Faces
rhonin 22nd Mar 2010
Isn't it amazing how "China" can have these restrictions that are heaviliy dependant on "where".

In HK (yes, part of China) full access is allowed. To censor there would deprive China of alreadily dwindling global financial access (199x exodus to Singapore and other places), basically bowing to the "money".

What will be intersting in the goverment response.

For Google, while China is adding the greatest number of new users, these users are for the most part not "buyers".

News at 11....
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China considers Hong Kong area and Macau Special Adminstrative Region (SAR) and they have separate laws from China except in foreign and defense affairs for next 50 years since July 1, 1997 for Hong Kong. So Hong Kong is officially part of China but most commercial and business laws are Hong Kong's own. Google moving it's search engine business to Hong Kong is good idea and other companies that feel China's "overt" pressure to conform can move there also but eventually they need to make a decision to do something before 2047 since China will remove SAR status and revert to full Chinese rule.

https://www.cia.gov/library/publications/the-world-factbook/geos/hk.html
https://www.cia.gov/library/publications/the-world-factbook/geos/mc.html

However, anyone doing business in Hong Kong shouldn't thumb their nose at China lest China gets angry and reneges on SAR in Hong Kong and put many people and business suffer for no good reason. Remember that Chinese and most Asian counties does like to lose face and China has an huge market (population is more than 4 times of the US) and losing that just is stupid. China and its human rights abuses need to be addressed but we need use our collective strength and good ideas of alternatives to convince them of these rather than piecemeal with private companies and other small measures that don't work.
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Good analysis...
JCitizen 27th Mar 2010
but many of us here in the US chaff at our relations with the PRC. So we applaud Google's move. We also feel more of a kindred spirit with the tenants in Hong Kong. They really are the leaders of the China success story.

IF the PRC face-saving leads to disaster in Hong Kong, the whole of China could suffer. I would say it would take another 20 years at least before China could close its doors to the world and successfully rely on their own market, to survive.

Plus, that would force them to sell all their interests over seas, which would not be good for the PRC no matter what. We in the free world are their best hedge against failure. Diversification has proven that to all business investment models.
Google is cut off its nose to spite its face.

Clumsy move at best and suicidal at worst on Google's part.
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Equally true with China...
JCitizen 22nd Mar 2010
They have to advertise with the US or we won't buy their s**t! So that goes both ways!

China will stagnate without real-time accurate information. Their industry needs the free world - without the freedom to acquire accurate information, there is only stagnation and death!
Because the US of A has one of the highest corporate
tax rates in the world. Google (and other companies)
aren't moving labor off of US shores because they
don't like American work. It's because the taxes are
so bloody high. If you want work to stay in America,
lower the corporate tax rate.

Not only does this keep American jobs in America, but
it will also increase the total revenue brought in to
the government via taxes.

30% of $1 = $0.33
10% of $5 = $0.50

The economy booms when tax rates are low. But, power
hungry politicians and the progressives that promote
them, would rather have CONTROL over private business
and individuals rather than have the extra revenue.

Government is not the the solution to our problem;
government is the problem.
--Ronald Regan
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Right on prime21!...(nt)..
JCitizen 22nd Mar 2010
.
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Tax Rate?
hforman@... 22nd Mar 2010
I don't think so. I was in China not too long ago. It seems to be the income level. That's why we can't compete with countries like China and India.

The problem with lowering the tax rate for corporations here is that we would have to replace that revenue from somewhere else. Bush's war has just about bankrupted this country and CEO's are still making money hand over fist. I think the answer is to get rid of the most favored nation junk and start in with tariffs. It is always going to be cheaper to buy overseas where they don't have the child labor laws.
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Good Idea
Jared Neale 22nd Mar 2010
,but it doesn't work in practice. We can look at the last 8 years and compare them to the 8 years that preceded that and come to....wait...for...it...a factual conclusion.
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Good point to bring up. I'm a moderate liberal and I even I agree on this point. Corporate tax rates need to be more aligned to other nations. Raise taxes only in a major boom, lower them when it's very weak, like now!
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Ronald Reagan
RobertFolkerts 22nd Mar 2010
or Donald Regan, both are one letter off from 'Ronald Regan'. But, of
course, Ronald Reagan is the source of you quote.

The numbers that you provided are a complete fantasy. CBO investigated
the 'Laffer Curve' in 2005. A 10% cut in marginal taxes (on individuals)
was estimated to increase the GNP by 1%. I don't know of anyone doing
this with corporate tax rates, but dropping the rate by 20% will not
increase corporate output by a factor of 5.
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That is a 67% drop.
TripleII-21189418044173169409978279405827 23rd Mar 2010
20% off 30% is 24%, not 10%. Anyway, the bottom line is, no matter what you do, whatever the tax rate is...

http://en.wikipedia.org/wiki/Laffer_curve
Others have cited Hauser's Law, an empirical observation that US federal revenues, as a percentage of GDP, have remained stable at approximately 19.5% over the period 1950 to 2007 despite significant changes in margin tax rates over the same period, as supporting evidence

So if you want to maximize net revenue, find the lowest tax rate in that 57 year period and you will have the highest growth, the highest GDP and you will get 19.5% of that as revenue. The real danger is those who fool themselves to think that we can either grow our way out of deficits (this will require a 60% growth in our GDP if levels stay the same) or believe that they can increase taxes and think they will see more than 19.5% of our GDP. All it will do is make the rich move their money or not spend.

TripleII
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Hello? Hong Kong is part of China !!
Watzman@... 22nd Mar 2010
Has anyone told the authors of this article that Hong Kong is part of China?
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They know that...
JCitizen 22nd Mar 2010
the point in moving to Hong Kong is a planned exit strategy, and staying legal with any contract obligations.

If the PRC throws them out, they could sue in the international courts, and China would be forced to defend the issue.

Businessmen in Hong Kong have a special agreement with the PRC that was developed to grease the end of the contract the British had with the mainland. This was done to assure the businessmen that dangerous disruptive changes would not happen. Also, if the PRC reacts in a malicious way, Google employees have a better chance escaping.
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Hogwash!...
windozefreak 22nd Mar 2010
they weld the same powers in Hongkong as they do in Mainland. And before too long you will see this, Google will too.
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Read CobraA1..
JCitizen 23rd Mar 2010
statement below; he apparently has a greater education than you do.
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As though a constitution means
dend 25th Mar 2010
anything. might makes right.
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I believe in the word of law...
JCitizen 26th Mar 2010
the Constitution lays out; albeit a court and congress interpreted one.

If it takes might to defend it, so be it. It will be right, providing it is interpreted exactly as our forefathers intended.
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They know that....
Bradish@... 22nd Mar 2010
Concern for the emploees is a red herring and not an issue....and I seriously doubt that China would act in a malicious way...it serves no purpose for China to do that. Defending in court? Well it is a simple matter that google threatened to break chinese sovereign law...good or bad it is their sovereign law...they don't have to defend it in any international court.
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As a business..
JCitizen 23rd Mar 2010
I would say at this point Google is more concerned with international contract law, than sovereign law. International law already addresses sovereign concerns.

Anyone that studies history knows that the PRC made special agreements with Hong Kong to allay the fears businessmen there had, to the change-over from the British. If they hadn't done that, all capital would have fled China forever.

Hong Kong is almost comparable to Texas, as that is the only state that can step down from the union, an historic agreement to get them to join the union.

The Hong Kong agreements weren't so radical. But you can bet your bippy, the businesses there are ready for any change in the winds of political decision.
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humm . . . .

I suppose it is officially it is a part of
China, although it is a "Special Administrative
Region" with more autonomy than the rest of
China.

In addition, Hong Kong uses "Hong Kong Basic
Law" as a constitutional document, rather than
China's own constitutional document. So its
laws are very different, as they are derived
from a different constitutional document.

. . . and I wouldn't say that everybody in Hong
Kong is happy about their official status. It's
not as if being a part of China automatically
makes everybody agree with the mainland. Don't
fool yourself into thinking that everything is
hunky dory and okay when a large Communist
nation takes control over a region that got
populated mostly by people who were running
away from the large Communist nation.

. . . and why is ZDNet turning my d's into
angle brackets? Somebody needs to clean up the
parser -_-.
Maybe they should get running water first.
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.

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