The Conflict Between China and Google
For over the past five China and Google have had quite a conflict with clashing ideas of business negotiations. The true conflict is a western company with a western mindset coming into a very restricted society with a very different mind set. On January 27, 2006, google went live in china with the domain "google.cn" This was a big deal for Google because after Apple went into China it was a booming success; Google was hoping for the same results. However this was very much not the case. For Google to even open a domain in China they had to comply with the censorship rules of the Chinese government. This was a major problem for Google but they decided to comply.
A year later in 2007 the Chinese government revoked Google's license because they claimed it was a news portal license, which is illegal for foreigners to operate (this goes back to the censorship issue), not and Internet service license. This was the first major conflict China and Google had but this definitely would not be the last. Google was able to settle things and got their license back.
One thing Google had to restrict was web based storage. They had a firm policy against storing personal data inside China because this would create conflicts where the Chinese government would demand Google to turn over the data (which Google was not about to get involved with). This meant Chinese users could not use Gmail, Picasa, blogs, or YouTube.
In addition the way Google runs their company was also a major concern for Chinese employees. They were not comfortable with the policy of pursing independent projects during 20% of their work time. Furthermore Google would not give them access to production codes which angered employes.
In January 10, 2010, Google decided they were not going to carry out censorship for the Chinese government anymore. Google then decided to redirect people from the China domain for Google to the Hong Kong domain for google which is uncensored. This angered the Chinese, and in an attempt to prevent a complete severing of their license in China, Google ended that automatic redirect to Hong Kong.
Google is still trying to slightly cooperate with the Chinese government so they can keep doing business wit Android and other things, but they are slowing moving away from doing everything the Chinese government wants them to. They are making progress but there is still much conflict between the two powers which have yet to unfold.