You can't serve two masters at the same time. This was just Google wanted to.
By acting this way they only received criticism by western media, of being too cooperative to a red dictatorship.
Reading this report - published on washington post - we know that even Chinese government is satisfied.
Chinese Media Assail Google
Internet Giant Said to Face Probe for Operating Without License
By Philip P. Pan
Washington Post Foreign Service
Wednesday, February 22, 2006; Page A09
BEIJING, Feb. 21 -- A state-run newspaper reported Tuesday that Google Inc. is under investigation for operating without a proper license in China and quoted an unnamed government official as saying the Internet giant needs to cooperate further with the authorities in blocking "harmful information" from its search results.
The report, in the Beijing News, was published the same day that another state newspaper ran a harshly worded editorial about Google. The paper accused the firm of sneaking into China like an "uninvited guest" and then making a fuss about being required to follow Chinese law and cooperate in censoring search results such as pornography.
The unusually bold attacks in the state media suggest that the Chinese government is unhappy with Google's efforts thus far to filter politically sensitive results from its popular search engine in China, and that its ability to do business in the country may be in jeopardy.
Google's cooperation with the Chinese government in censoring the Internet has already sparked outrage from free speech advocates and U.S. lawmakers who accuse it of betraying its corporate motto, "Don't be evil." The firm announced last month that it was launching a censored search engine, Google.cn, to improve its service in China, where its regular site and its search results are sometimes blocked.
Dubbed the "eunuch edition" by some Chinese Internet users, the new search engine withholds results from Web sites the governing Communist Party finds objectionable, and returns limited results when users enter politically sensitive keywords.
Google has defended its decision to launch the censored site, arguing that people in China can continue to use the Chinese version of its regular search engine, Google.com. It has also pointed out that the new search engine is the first in China to inform users when results have been removed because of the government's "laws, regulations and policies."
But it appears Chinese authorities are now pressuring Google to cut off access in China to its regular search engine, and to stop telling users of the new site every time a search is censored.
"Is it necessary for an enterprise that is operating within the borders of China to constantly tell your customers you are following domestic law?" said the editorial published Tuesday in the China Business Times, a financial daily.
Both the editorial and the Beijing News accused Google of operating its new site without an ICP -- or Internet content provider -- license. The editorial also accused Google of starting a debate about censorship in China to draw attention away from its "illegal" activity. "Can Google get away with this?" it asked.
In a written statement, Google spokeswoman Debbie Frost said Google uses a license held by a local Chinese firm, Ganji.com, in an arrangement that is common for foreign Internet firms in China.
A source familiar with the government's position said the Ministry of Information Industries has raised the ICP license issue to put pressure on Google to comply with its demands. He said the government wants Google to make a larger investment in China and do more to censor its search results.
"The main problem isn't the ICP dispute, but the awkward relationship between Google and the Chinese government," the source said. "To be honest, the ICP dispute is a minor thing, and that's not what will get Google into trouble."
Another Chinese source said Google recently rejected an urgent request to remove from its stored Web pages information related to an internal dispute at an influential Chinese agency. That information had been posted on the Internet.
"Foreign-invested search engines must strengthen control and management of how they handle search results with Chinese information," an unnamed government official was quoted as saying in the Beijing News.
He said blocking "harmful information" from search results was a "very practical problem," and added that Google "still needs to strengthen cooperation with the government's relevant functional departments" in this area.
The Beijing News also quoted an unnamed Google official as saying it was "very likely" that all Chinese searches on its regular site would be redirected to the censored search engine because of "pragmatic considerations."
But in congressional testimony last week, Elliot Schrage, Google's vice president for global communications, appeared to rule that out. "We will not terminate the availability of our unfiltered Chinese-language Google.com service," he said.