GOOGLE SAID yesterday that Beijing had renewed its operating licence, surprising many in the industry who had not expected the Chinese government to compromise in its censorship dispute with the US internet group.

The development came after a six-month stand-off provoked by Google, which had initially stirred a hardline response by declaring that it would end its four-year-old agreement requiring it to censor Chinese searches.

While the news was welcomed by China experts in the US, who described it as a face-saving and pragmatic compromise, industry observers also warned that China might now progressively limit access to Google’s services.

In two lines of text posted on its own blog, Google said the renewal of its internet content provider licence would allow it to continue providing “web search and local products to our users in China”.

The announcement means that Google can keep operating its google.cn website and removes the immediate threat that the US group would have to withdraw completely from the Chinese market, the world’s largest, with 400 million users.

Google’s announcement in January that it would stop complying with the censors set up a rare public showdown between a multinational company and Beijing.

Google’s new arrangement is to send mainland users to a landing page from which they can click on a link to the Hong Kong website. Although this means that Chinese users only have to click one more time to be redirected, the approach appears to have won the approval of the Chinese authorities for the time being. – (Copyright The Financial Times Limited 2010)