Google Wins Reprieve as China Renews Its License

The game of cat-and-mouse between Google (s goog) and China over the search giant’s license to operate in that country has ended — for now, at least — with the Chinese government agreeing to renew the company’s license for another year. The renewal came after Google (s goog) agreed to alter the way it handles Chinese visitors to its website: it had been redirecting them automatically to a Hong Kong–based version of the site, but stopped doing so after the Chinese government complained. The tension between the two seems unlikely to subside, however, as Google tries to maintain a foothold in the country without bowing completely to the government’s desire for control.

Google’s battle with China over its search operations started in January, when the company stopped filtering its search results (something the Chinese government requires of all search engines in that country) in retaliation for a hacking attempt that Google suggested was related to government attempts to track and monitor Chinese dissidents. In March, the company started redirecting searches to its Hong Kong site, which isn’t subject to government filtering rules, but the Chinese authorities said this was unacceptable and threatened to withhold its license to operate in China.

Google then stopped redirecting and added a simple link to the Hong Kong version of its search engine, which appears to have placated the authorities. “In China, it is very common that you need to give the government face if you want to do business here. The double click rule [requiring users to click rather than be redirected] shows that Google can compromise and give them face,” Edward Yu of Analysys International told Reuters.

Google’s interest in remaining in China is obvious: the country has more than a billion residents, many of whom are becoming more affluent, creating a huge potential market for the company’s products — particularly with the growing demand for smartphones, which Google is going after with its Android OS. But the company has to walk a tightrope in order to remain on the government’s good side, while still maintaining some semblance of ethical principles by not caving in to the authorities on issues like filtering and monitoring.

And since Google and other Internet service providers have to renew their operating licenses annually, the company could find itself back on tenterhooks again next year. The cat may have backed down in this case, but it remains a cat.

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Post and thumbnail photos courtesy of Flickr user Steve Webel