It does seem as if Google has been holding its nose in China for a long time (recall the heat they took in agreeing to the filtering of results there).

Fallows' take (he's lived in China off-and-on for several years): http://jamesfallows....on_google_and.php

[...]

Dealing with those requirements has been part of a non-stop set of difficulties for Google in China. More details about this later on. Like most other Western companies, Google has consistently decided to cope with the difficulties and stay in China. Part of the reason was the obvious commercial potential that the Chinese market has for almost any company in any industry. Another part was Google's argument -- which I basically believe -- that the Chinese public was better off with another source of information, even if constrained, than it would be without that option. But, as reported on Google's site, a latest wave of provocations and intrusions was simply too much.

[...]

In a strange and striking way there is an inversion of recent Chinese and U.S. roles. In the switch from George W. Bush to Barack Obama, the U.S. went from a president much of the world saw as deliberately antagonizing them to a president whose Nobel Prize reflected (perhaps desperate) gratitude at his efforts at conciliation. China, by contrast, seems to be entering its Bush-Cheney era. For Chinese readers, let me emphasize again my argument that China is not a "threat" and that its development is good news for mankind. But its government is on a path at the moment that courts resistance around the world. To me, that is what Google's decision signifies.

Interesting times.

Cheers,
Scott.
(Who doesn't yet think things are as bad during as the Hainan EP-3 incident - http://en.wikipedia....n_Island_incident - but the trend isn't especially good, and China's economic bubble is worrying...)