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China, on the other hand, has all aces on the table, making it clear that it reckons it has the superior hand.

Maybe Google forgot some incredibly important things about the Tiger: it has a long memory, and is has a proud cultural identity that won’t back down when cornered, especially if it perceives a pressure to humbly bow before a force claiming superiority.

This may seem like strong langauge, but if history shows us anything obvious about China, it’s tht it won’t back down when it’s cultural and national identity seem threatened.

As you say, China already has Baidu. Google won’t ever be able to stake its claim in the way it would want, so rightly or wrongly, they’re going to have to put up, or shut up.

In this case, perhaps shut up shop.

Google does face perhaps the most significantly difficult business AND ethical decision in the light of China’s diffidence.

It’s not clear how they can best behave from now on. They’re in troubled water with the western democratic conscience if they stay, and economically they’re in trickier waters if they pull out.

The latter option would certainly appease those of us in the west who can afford to take the moral high ground, but Google knows that China is perhaps the biggest single player to help them maintain and stablize their existing market dominance for some time to come.

“Do no evil?” Not so easy now that they are so big.