Google to China: No More Censorship

I love Google. The company found Chinese hackers were targeting companies and Gmail accounts of Chinese human rights activists. Google is now considering some hard-line foreign policy:

These attacks and the surveillance they have uncovered--combined with the attempts over the past year to further limit free speech on the web--have led us to conclude that we should review the feasibility of our business operations in China. We have decided we are no longer willing to continue censoring our results on Google.cn, and so over the next few weeks we will be discussing with the Chinese government the basis on which we could operate an unfiltered search engine within the law, if at all. We recognize that this may well mean having to shut down Google.cn, and potentially our offices in China [David Drummond, SVP, Corporate Development and Chief Legal Officer, "A New Approach to China," The Official Google Blog, 2010.01.12].

Google vows to do no evil. If Google follows through with this statement, it will be doing some active good on behalf of human rights.

I wonder: is Google's announcement the first step into a geopolitical era when private corporations will be able to impose effective sanctions on nations? And if other Internet companies follow Google's lead (as some rights groups hope), could withdrawal of Internet services affect modern nations the way OPEC squeezed America with the oil embargo in the 1970s?

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Update 21:25 CST: Glyn Moody suggests the Chinese will just shrug and clamp down even more. Moody sees more possibility that Google's move may provoke other Western companies (and countries?) to consider putting principle over profit in dealing (or not) with China.