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Who's in the Video
Edward Tse is Booz & Company’s senior partner and Chairman for Greater China (Shanghai, Beijing, Hong Kong and Taipei). He has over 20 years of management consulting and senior corporate[…]

With competitive local search companies waiting in the wings, will Chinese users really mourn Google’s absence?

Question: Was Google’s recent exit from China motivated by business or ethics?

Edward Tse:  Well I can’t say a comment on behalf of Google because, you know, I think that Google business executives have a very clear mind about what they’re doing, but I would only comment that you know I think when we look at China and also the opportunities for foreign companies in China I think we need to take a broader view and perhaps a longer view.  The media sector where Google is in is a rather sensitive sector for the Chinese government for the reasons that I think everybody understands and so, you know, I think, you know, it is in a way it’s not unreasonable to see you know the different perspectives between a company like Google and that of the Chinese government.  I cannot put a value judgment on who is right, who is wrong, but what my view is that that is you know only one of the data points within a broader universe of considerations and in fact, for many companies that I work with and I talk to, many foreign companies including many American companies they continue to see tremendous opportunities in China, but also they see competitive threats coming out from China, so you know, companies are not very busy in sort of saying you know what does Google mean to me.  Companies are saying what does China really mean to me in terms of both their opportunities as well as the threats or the challenges, so I say that, you know, Google is an important case because it is highly visible, but at the same time it’s only one data point within numerous data points within the universe of companies doing business in China or with China.

Question: Who will ultimately be forced to relent, the Chinese government or Google?

Edward Tse:  Well I think yeah, to what extent that China is willing to adjust the policies in this area I think is, you know, obviously that is what…That is a decision that the Chinese government should make.  With respect to Google, you know, I think they will look at it from their business standpoint towards then they can be successful in China within the current regulatory context and the fact of the matter is for many of the foreign internet companies that have been trying, you know, to go into China and try to compete within the China context many of the foreign internet companies find that it is actually pretty challenging because the local companies are actually fairly competitive, so that’s a reality that you know businesses is about competition and when you’re facing with strong competition then you know you need to be careful about you know what is the next step should you want to continue to invest the resources to try to compete along with the other guys or do you want to make a withdrawal.  Then, you know, it’s a decision that every company needs to make, but the Chinese companies are very, very competitive in their own space.