Doing Business in China: Google Threatens to Pull Out of China

From Bloomberg:

Google Inc.’s threat to pull out of China is the most visible reflection of U.S. companies’ growing disillusionment with the country nine years after it joined the World Trade Organization, business groups said.

Trade groups representing companies like Microsoft Corp., Boeing Co., Intel Corp. and Cigna Corp., which backed China’s entry into the WTO and fought off legislation to punish Chinese imports, say China increasingly discriminates against them on government contracts and through unfair subsidies.

Google, owner of the most-used search engine, said Jan. 12 that it would end self-censorship of its product in China after attacks on e-mail accounts of human-rights activists. The Mountain View, California-based company said the move may cause it to close offices in the country.

U.S. industry groups have raised complaints in recent months about policies such as China’s proposal to limit government contracts to companies that develop their technology in China.

“There is a growing frustration among companies about doing business in China,” John Neuffer, vice president of the Information Technology Industry Council, a Washington-based group that represents companies such as Microsoft and Intel, said in an interview. “It’s still a profitable market, but it’s become more difficult to do business there.”

Such comments from long-time backers of U.S.-China relations represent growing dissatisfaction among U.S. companies, said Susan Aaronson, a professor at George Washington University in Washington who writes about U.S.-China trade relations.

“I see much greater disillusionment as China is promoting its national champion companies,” Aaronson said in an interview. “More and more firms are going to say: I can do without this market.”

http://bloomberg.com/apps/news?pid=20601087&sid=avHfo24ba994&pos=7

From the NY Daily News:

Security experts say Google, along with dozens of other major companies, was the victim of a concerted espionage effort that they say came from within China and exploited flaws in e-mail attachments to get into networks of major financial and technology firms.

http://www.nydailynews.com/news/world/2010/01/14/2010-01-14_security_experts_china_hacked_google_to_steal_us_defense_secrets.html