Google Feels China Exit Fallout

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Google is feeling the wrath of China. The company's other business deals in China are also coming under pressure, two days after it moved its search engine to Hong Kong. Meanwhile, a prominent Chinese scholar is accusing Google of being a part of a deliberate American strategy to undermine the country.

RENEE MONTAGNE, host:

Google is feeling the wrath of China. The company's other business deals in China are also coming under pressure, two days after Google moved its search engine to Hong Kong. And a prominent Chinese scholar is accusing Google of being part of a deliberate American strategy to undermine the country.

For the latest, we're joined from Shanghai by our correspondent, Louisa Lim. Hello.

LOUISA LIM: Hi, Renee.

MONTAGNE: Tell us more about the reaction to Google's move, you know, the reaction on the ground there in China.

LIM: Well, Renee, it's interesting. We're seeing a couple of different things happening at the same time. There is this nationalistic backlash against Google. One example is that scholar that you mentioned that works for China's state council. And we're also seeing online some other nationalistic bloggers who are basically saying good riddance to Google. The typical kind of comment that they're making is that Google's insulted China and perhaps were sent by the U.S. to damage the unity of the Chinese people.

So, there is some vocal anti-Google feeling. But at the same time, if you look at Google's last figures, there are signs that after Google transferred its search engine to Hong Kong, it shows the search market in China actually increased. On Monday, for a while, it actually got more traffic than the market leader Baidu. So, it became the number one search engine in China just for a bit.

Now, that could be curiosity as people try it to see what difference it makes. But it does indicate that user figures have been up a little bit the last couple of days.

MONTAGNE: And tell us about Google's Chinese partners. I mean, are they sticking with Google or beginning to abandon the company?

LIM: There are signs that some of them are beginning to abandon it. China's second largest mobile phone carrier, Unicom, says it's removing Google's search from its cell phones. And its president told reporters that it would only work with companies that abide by Chinese law. And we've also seen one very popular Chinese portal called Tianya.cn - that's also taken control over some of its social networking services that it had operated together with Google.

So, some are cutting loose but others are staying loyal. And we spoke to the CEO of a music download service called Top100.cn, and he told us he would stay with Google and he was expecting even closer cooperation with Google in the days to come.

MONTAGNE: And of course Google has a number of other services that it offers there in China. What about them?

LIM: So far, we've not seen any further blocking of Google services but that's what people are looking for next, to see if things like Google Maps or Gmail in China get blocked. So far, they're working fine, but I might add that Gmail has even introduced a new service which detects suspicious activity on your Gmail account. Now, on Twitter here people are saying it's a service to see whether the Chinese government is reading your Gmail.

MONTAGNE: So, what about other foreign companies? Any up to now following Google's lead out of China?

LIM: Well, yes. We have seen the first company to announce its departure, publicly, since Google left and that's Go Daddy, the world's biggest domain name company. And they blamed a new Chinese government regulation. But the fact is actually Go Daddy's China business is pretty small. It registered 27,000 .CN domain names last year. That's less than one percent of its whole business.

So, in a way it's quite similar to Google, whose China business only accounted for two percent of its global income. So, it too is making a stand against censorship without really damaging its bottom line.

MONTAGNE: Louisa, thanks very much.

LIM: Thank you.

MONTAGNE: And that's NPR's Louisa Lim in Shanghai, bringing us up to date on Google in China.

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