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Google delays Chinese launch of phone

Jan. 20, 2010

By Associated Press

BEIJING (AP) -- Google says it has postponed the launch of its mobile phone in China amid a dispute with the government over Internet censorship.

A Google spokeswoman in Beijing, Marsha Wang, says the formal launch of the phone scheduled for Wednesday was postponed.

The announcement came as the Chinese government said Google must obey the country's laws and traditions. It was the government's first direct response to Google's threat to pull out of the country over censorship and e-mail hacking.

The Google spokeswoman, Wang, declined Tuesday to give a reason for the postponement of the phone launch or to say when it might take place.

The comments from Foreign Ministry spokesman Ma Zhaoxu were the first from Beijing that referred directly to Google Inc. since it threatened to shut down its China-based site over censorship and alleged e-mail hacking.

"Foreign enterprises in China need to adhere to China's laws and regulations, respect the interests of the general public and cultural traditions and shoulder corresponding responsibilities. Google is no exception," Ma said.

Google's announcement Jan. 12 that it might quit the huge Chinese market shocked the international business community and cheered many free-speech advocates.

Google said last week it is hoping it can persuade the Chinese government to agree to changes that would enable to show uncensored search results. If a compromise isn't worked out within the next few weeks, the company intends to shut down its search engine and pull out.

Google has said it would hold talks with the government over the issue. Ma told a regular news conference he did not know if any talks had been held.

A pullout would be awkward for China. Chinese and foreign businesses rely on Google's e-mail, maps and other services based abroad, which could lead to disruptions if authorities try to retaliate for a Google withdrawal by blocking access to its U.S. site.

Google said last week that a sophisticated attack in December from China targeted the Mountain View, California-based company's infrastructure and at least 20 other major companies from the Internet, financial services, technology, media and chemical industries.

The Foreign Correspondents' Club of China sent an e-mail Monday to its members warning that reporters in at least two news bureaus in Beijing said their Gmail accounts were broken into, with their mail forwarded to unfamiliar accounts.

Ma said China strictly prohibits computer hacking in any form.

The head of China's e-commerce giant Alibaba -- in which Google rival Yahoo Inc. has a significant stake -- said Tuesday that foreign companies such as Google should not pull out of the Chinese market.

"It is easy to give up, but one must hang on," said Jack Ma, chief executive of the Alibaba Group, commenting on the challenges in China.

"China will set the rule of game in the 21st century, and businesses must not go to the mainland for the profit motives only but rather to take part in setting the rules," Ma told a business conference in Taipei, Taiwan.

Yahoo closed its offices in China several years ago when it sold much of its business to Alibaba Group. Yahoo retains a 39 percent stake in Alibaba, which represents one of Yahoo's most valuable assets.

China's online population has soared in recent years to 384 million people, bigger than the entire population of the United States., set up in 2005, trails local rival Baidu Inc., with a 35 percent market share to Baidu's 60 percent.