Can Google Stay In China And Still Save Face?

Ever since Google’s bold statement early this year that it would be withdrawing from the Chinese search market if it couldn’t find a way to operate without censorship, Mountain View has found itself in a bit of a no-win situation. Google CEO Eric Schmidt has expressed several times that the company would like to remain in China (the largest internet and mobile market on the planet) despite the tough stand.

Google took the high ground in response to coordinated attacks on its servers in an effort to gain access into Gmail accounts of Chinese human rights activists. The Chinese government has been indirectly linked to the attacks by several security firms and other sources, though the Chinese officially deny any involvement. That lack of definitive proof that the Chinese themselves were behind the attacks has allowed officials to maintain a strident and indignant line vs. Google.

Censorship in China is one of the core positions of the government — one that is critical to their maintenance of political control — and it was perhaps naive of Google to think that there would be any change in that position or exception made for the company. Indeed, China’s no-compromise-on-censorship position was reiterated by a top-level Chinese minister yesterday, according to a report in the Wall Street Journal:

At a press conference Friday, Li Yizhong, Minister of Industry and Information Technology, was asked by a reporter how China would react if Google does stop censoring Google.cn. “I hope Google can respect Chinese rules and regulations,” responded Mr. Li, whose ministry is one of several that regulates China’s Internet. “If you insist on taking this action that violates Chinese laws, I repeat: you are unfriendly and irresponsible, and you yourself will have to bear the consequences.”

The challenge now for Google is how to find a compromise position and remain in the country, as CEO Eric Schmidt and many of Google’s shareholders would like to do, but not appear to have betrayed the admirable principles asserted in January when the company said this:

We have decided we are no longer willing to continue censoring our results on Google.cn, and so over the next few weeks we will be discussing with the Chinese government the basis on which we could operate an unfiltered search engine within the law, if at all. We recognize that this may well mean having to shut down Google.cn, and potentially our offices in China.

Given that the Chinese aren’t going to back down, how might Google remain in China and still save face in the West?