In mid-January Google said they are leaving China after being part of a hack by the Chinese government. Since then, Google has been trying to work out details with the Chinese government to stay. Part of Google's requirements to stay was to stop or limit the censorship required there, but it appears that Google and China cannot see eye to eye.
The Financial Times reported:
Google has drawn up detailed plans for the closure of its Chinese search engine and is now "99.9 per cent" certain to go ahead as talks over censorship with the Chinese authorities have reached an apparent impasse, according to a person familiar with the company’s thinking.
Pulling out of China has huge financial concerns for Google.
Google's executives have made it clear that they still hope to stay in the country, whatever the fate of Google.cn. "It's very important to know we are not pulling out of China," Eric Schmidt, Google’s chief executive, told the Financial Times at the time. "We have a good business in China. This is about the censorship rules, not anything else."
A WebmasterWorld thread takes issue with that last quote. Google first went into China fully aware about the censorship requirements. They complied with the Chinese government then, and now they are saying they will leave because of it?
Now China is pushing back even harder, warning Google partners that they must also leave if they do not comply with Chinese law.
Forum discussion at WebmasterWorld.