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Google reportedly planning a return to China, eyeing app market

(Global Times)    08:59, November 12, 2015

After a five-year absence, speculation runs high that Google is eying a return to the Chinese mainland.

The move, if true, would be a win-win solution for both China and the global Internet giant, experts said.

Refusing to filter search results, Google exited the mainland market in 2010 in a high-profile gesture of defiance against the Chinese authorities, which insist that all domestic or foreign companies in China must abide by local laws and regulations.

"It's not the first time that Google is reportedly pursuing a return to China. Nothing is for sure until an official announcement comes out," Aaron Tian, an Internet engineer from a San Francisco-based Internet company, told the Global Times.

Google responded to questions from the Global Times on Monday, refusing to make any comment on the speculation of its return. However, Google executives have emphasized recently that the company has "never left China."

A market too big to ignore

Eric Schmidt, executive chairman of Google's parent company Alphabet, said that Google is planning to expand its presence in China during a speech at the TechCrunch conference in Beijing on November 2, the BBC reported. His remarks echoed Sergey Brin, one of Google's co-founders, who suggested that some services would return.

"The Chinese market is too big for Google to ignore, since China has the world's largest online population," Fang Binxing, an expert on network information security at the Chinese Academy of Engineering, told the Global Times.

According to figures from China Internet Network Information Center (CNNIC), the number of China's online population hit 668 million in June, with an Internet penetration rate of 48.8 percent.

"China's Internet industry has witnessed fast development during the past five years. Thanks to the government's favorable policies and strong domestic demand, many Internet companies have made great profits," said Qin An, a cyber security expert at the China Institute for Innovation and Development Strategy.

According to a CNNIC report released in October, there are so far 328 listed Internet companies in China, whose total market value reached 7.85 trillion yuan ($1.23 trillion), comprising 25.6 percent of the nation's market capitalization. Four of them have made their way to the top 10 world Internet companies, including Baidu, the archrival of Google which has since secured its dominance of the Chinese search market after Google left.

Although several Internet giants such as Facebook and Twitter are also not accessible in China, a number of foreign companies have struck gold in the mainland market. Apple, for instance, has made $12.5 billion in China in the fourth fiscal quarter, up 99 percent and the highest growth rate among the company's global regions, while smart phone sales rose 87 percent in China during the quarter.

In fact, many US Internet firms have been actively seeking business opportunities in China. The CEOs of Silicon Valley, for instance, reportedly scrambled to join the photo op with visiting Chinese President Xi Jinping in September.

Facebook CEO Mark Zuckerberg has been visiting China frequently. And when a Chinese top Internet official visited Facebook's headquarters in the US last year, a book by President Xi, The Governance of China, was reportedly seen on Zuckerberg's desk.

According to Qin, Chinese Internet users and companies could also benefit from Google's return to China.

"Google's return, if possible, would diversify the Chinese Internet market and offer users more options. Domestic Internet companies may have a chance to compete with Google, which will also promote their competitiveness," Qin told the Global Times.

"With its advanced technologies, excellent working environment and talented staff, Google is no doubt a top choice for IT engineers. If it comes back to China, I will definitely apply for a position there," Tian said.

App store first?

Despite the promising future of Google's possible return, many experts believe that it's not easy for the Internet giant to launch all its services in China in a short period.

"Google left China in 2010, refusing to offer a 'censored' Google.cn search engine to the Chinese market. So far there's no evidence showing that it's going to comply with China's regulations, so it's unlikely the searching engine will return to China soon," Tian said.

Based on IT news website The Information's report on September 4, Google is preparing a special China app store for Android devices and extending its Android software for wearable devices.

"As early as this fall, the company hopes to get Chinese government approval to distribute a special China version of its Google Play mobile app store for Android smart phones in China," read the report.

According to Tian, unlike its search engine, Google Store censors all the apps and their developers. Only eligible apps will be sold on its app market, following China's regulations.

"The Android app market in China is quite lucrative, because the nation boasts a great number of mobile users, and many of them use Android system," Fang said.

Based on CNNIC's report, mobile phones have become the most commonly-used platform to access the Internet. Some 594 million people in China can access the Internet through mobile phones in 2014.

According to Tian, the Android app market is quite chaotic in China. Without a leading app platform like the Apple Store, Android users are facing problems such as pirated software, viruses and malicious advertising.

"Apple's success is a good example for Google. If it can follow Apple's path, I see no reason why Google Play cannot return to China," Tian said.

"Cooperation, instead of confrontation, will help Google reap great profit from the Chinese market. China welcomes companies from all over the world, as long as they obey Chinese laws and regulations," Qin said. 

(For the latest China news, Please follow People's Daily on Twitter and Facebook)(Editor:Liang Jun,Bianji)

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