Google says China has renewed web page licence

Google Inc said today that the Chinese authorities had renewed its licence to operate a website, averting a potential shutdown of its flagship search page in the world's biggest Internet market.

Google said last week that it would stop automatically rerouting users to its uncensored Hong Kong-based search page, explaining that Beijing had indicated it would not renew its Internet Content Provider (ICP) licence if it continued to do so.

That had prompted speculation that China might use the opportunity to shut down Google's China search page, which would have been a blow to its other business in the country.

"China has renewed our licence," a Google spokesperson said.

"We are very pleased that the government has renewed our ICP licence and we look forward to continuing to provide web search and local products to our users in China."

Google chief executive officer Eric Schmidt had told an industry gathering yesterday in the United States that he was confident the company would secure the license.

Analysts said that the company's decision to stop automatically rerouting users to its Hong Kong search page showed a willingness to compromise to maintain a foothold in China, the world's largest Internet market by users.

"In China, it is very common that you need to give the government face if you want to do business here. The double click rule (so as not to automatically reroute searches) shows that Google can compromise and give them face," said Edward Yu of Analysys International.

Google stunned markets and consumers in January when it warned it might quit the country, saying it would not provide the censored search results that China requires.

In March, Google began to redirect visitors to its China website to a search site in Hong Kong that provided uncensored results.

The company's row with the Chinese government over Internet censorship and hacking attacks added to a burst of tensions between Washington and Beijing, which also saw diplomatic spats over China's currency, US arms sales to Taiwan and Tibet.

But tensions have subsided in recent months. Yesterday the Obama administration declined to label China a currency manipulator, and a decision to allow Google to keep its Chinese website could remove another source of friction.