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China tells Google to obey law even if it's leaving

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China has warned Google that it must obey government rules even if it decides to exit the country.

On Tuesday, Reuters reports, a spokesman for China's Ministry of Commerce said that among other things, Google must report to the ministry if it intends to shutter its Chinese operations. As it stands, the ministry has not received any documents involving a Google exit, which the company appeared to threaten with a blog post in mid-January.

"On entering the Chinese market...[Google] clearly stated that it would respect Chinese law," ministry spokesman Yao Jian told reporters. "We hope that whether Google Inc continues operating in China or makes other choices, it will respect Chinese legal regulations...

"Even if it pulls out, it should handle things according to the rules and appropriately handle remaining issues."

On January 12, after alleged Chinese hackers pilfered intellectual property from the company's internal systems, Google announced that it has decided to "no longer" censor search results in the country, saying it would spend "the next few weeks" in talks with the Chinese government to determine "the basis on which we could operate an unfiltered search engine within the law, if at all".

That was nearly nine weeks ago. Last week, Google CEO Eric Schmidt said that "something will happen" with the talks "soon," but he reiterated that the company has "no timetable" for its government discussions.

A recent report from The FT says that Google is "99 per cent" certain to shut down its Chinese search engine. But the paper's sources indicated that the company is intent on maintaining its other operations in the country and that a search shutdown may take some time.

Today, Google indicated that its Chinese internet service license is set to expire at the end of the month. Generally, China requires business to renew their licenses once a year to ensure they abide by local law, and this could put added pressure on Google to make a decision sooner rather than later.

Yesterday, according to The New York Times, Chinese regulators told some of Google's biggest partners in the country that they should plan for a Google exit, saying discussions had reached an impasse.

As Google mulls its options, it continues to censor results on Google.cn, but it has postponed the release of two Google-branded Android phones in the country, telling The Reg that it has suspended the use of Google apps on all Android phones from Chinese carriers.

Meanwhile, a spokesman for China's foreign ministry has sought to quell suggestions that a Google exit will cause problems with other foreign investors. "I think this would just be the individual act of one company, and will not affect China's investment environment," said Chinese Foreign Ministry spokesman Qin Gang, according to Reuters.

"It will not change the fact that most foreign companies, U.S. ones included, have a good business in China and generate large profits." ®

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