The political/ethical/financial spat between Google and the Chinese authorities has entered its second phase: The Chinese government is underlining its legal position, and Google's responding by postponing the launch of Android phones.
When Google announced it was going to uncensor its Google.cn search engine last week, it came as a surprise—not many organizations have taken such a bold stance against the human-rights suppression of the Chinese authorities. The move was celebrated all over the Web, even while Google's real motivations weren't too deeply investigated.
Of course Google's public statement of its intentions hinged on a massive cyber attack, sourced within China (and possibly coming from government-approved actions) late last year. The hackers appeared to be gaining access to Google's proprietary code and data on Gmail users who are public critics of Chinese policies. As a result of this attack, Google set itself in direct conflict with China's censorship laws and may face closure. This is seeming ever more likely an outcome, with Chinese government officials again underlining that Google must obey local laws. But if Google does pull out of the nation, its slightly relaxed stance on Internet censorship will be lost: Chinese Net users will only have the more popular (and more highly censored) government-sponsored search engine Baidu to use. It seems that the Chinese sensors were pushing Google to up its self-censorship to match Baidu's policies—and this also played into Google's decision.
But if Google pulled out of China, there were also worries about the future of the Android smartphone OS in the nation—and that worry has now come true, with the AP reporting that Google has "postponed" plans for its Android phone there. From the AP report it's not clear if this refers just to the recently-revealed Google-branded Nexus One, or all Android phones—but with other news that China Unicom is "indefinitely" postponing its plans to launch a suite of Android devices (which would've happened this week) the future of Chinese Android looks dim.
And there's also much more sinister news emerging about the extent of the China-based cyber attacks. Google itself is investigating whether the hackers had inside help—and that raises serious worries about the possibility of a Chinese government mole (or at least a tech-savvy sympathizer) working inside Google. Meanwhile the Indian National Security Advisor has also issued a statement that Chinese hackers also attempted to gain access to government computers using what seems to be a similar trojan-based attack to that which Google suffered. This suggests that the cyber attacks were much more widespread than previously thought, and tackled a much broader set of targets.
While these bits of news add a certain level of James bond intrigue to the affair, it's now becoming a much more serious issue that will begin to impact global politics. The Chinese government has repeatedly stated that it forbids hacking, but the apparent targets of the hacks could only really be considered "enemies" to an official boy like the government. And if government computers in India were also targeted, one has to wonder how many other nations were affected, and how many other Chinese cyber attacks haven't yet been reported.