Yesterday, I wrote about Google’s historic move to shut down mainland China search engine and redirect all traffic to Hong Kong.  I liked the move by Google and predicted that they would be shut down.

I wrote

Google is making a great move here – in fact very historic.  However, they are still at risk of being shut down. All this China talk is very interesting and it really boils down to two factions within China – the old and the new. All the young kids are already hooked up to the net and can use proxy servers to bypass any control from the government. The move by Google is brilliant in that it allows them to set up in Hong Kong and deploy a kind of "search honey-pot" – uncensored search that all could easily get access to. Also, by actively reporting on what has been censored Google in effect becomes a watchdog on China.

Will China cave under public pressure? Google is certainly doing the right thing in setting up camp outside the "proverbial jurisdiction" and keeping an eye on the activities of the China users.

One other angle is China’s competitiveness and relationship to the Internet.  If China becomes a "rogue virutal state" then this will hurt their competitive position in terms of innovation.  It could potentially harm the collaboration angle between them and the rest of the world.

My prediction is that the public and rest of the world will create a backlash against China.  This backlash will "cold packet war" against China if they continue to show censorship behavior and/or shut down Google.

Today it happened. China shut down Google’s "safe harbor" in Hong Kong where the tens of millions of Chinese users were sent – Google’s to uncensored Web site.

This is the beginning of a new kind of cold war – A war of packets or Cold Packet War. This represents the first of its kind. China has offically become a "Virtual Rogue State". On the surface they have managed to navigate the world order offline, but online there is no place to hide or pretend.

I predict that the China people will erupt in protest.

The New York Times has a good post on the subject:

But the government has shown no sign of budging. Mainland Chinese users still could not see much of the unfiltered Hong Kong search results Tuesday because government firewalls either disabled searches for highly objectionable terms completely or blocked links to certain results. That had typically been the case before Google’s action, only now millions more visitors were liable to encounter the disrupted access to an uncensored site.

Beijing officials were clearly angered Tuesday by Google’s decision to close its Internet search service in China and redirect users to the Hong Kong site, a move that focused global attention on the government’s censorship policies, and there were signs of possible escalation in the dispute.

Technology analysts and the business executives, who demanded anonymity for fear of retaliation, said that Google might also face problems in keeping its advertising sales force, which is crucial to the success of its Chinese language service.

“It’s going to boil down to whether authorities feel it is acceptable for users to be redirected to that site without having to figure it out themselves,” said Mark Natkin, managing director of Marbridge Consulting, a Beijing-based technology research firm.

At the same time, Mr. Natkin said that the government might still be wary of agitating loyal Google users in China, who tend to be highly educated and vocal. “To block Google entirely is not necessarily a desirable outcome for the government,” he said.

In northern Beijing on Tuesday, a few Chinese passers-by laid flowers or chocolates on the large metal “Google” sign outside Google’s office building, The Associated Press reported.

The two sides had been at loggerheads since early January, when Google said it would end the voluntary censorship of its China-based search service in response to attacks by Chinese hackers on its e-mail service and its corporate database. Two months of sporadic talks failed to bridge the divide between Google and the Chinese government, which insists that its citizens’ access to the Internet be stripped of offensive and some politically sensitive material.

The government denounced Google on Tuesday, calling its decision “totally wrong,” and the state-run news media accused Google of politicizing the Internet by trying to foist Western content on Chinese users.

One Western official who spoke on condition of anonymity said that China now speaks of Internet freedom in the context of one of its “core interests” — issues of sovereignty on which Beijing will brook no intervention. The most commonly cited core issues are Taiwan and Tibet. The addition of Internet freedom is an indication that the issue has taken on nationalistic overtones.

Google said in a blog posting Tuesday that Chinese officials had never wavered in negotiations from their insistence that Google censor its search results.

“The Chinese are very serious about pushing their soft-power agenda,” he said. “Google just put a big hole in that sales pitch, and I think they know that. So the idea that Google can take out its search business and leave everything else, and China will just forgive and forget — that’s very much not how the Chinese government works.”

Were Google’s Chinese search business to vanish, he said, the company would still have valuable interests inside China. Its growing research and development center allows it to tap talent that cannot easily travel to the United States, he said. And Google’s advertising business is used not just to place ads on Google’s Chinese service, but to market Chinese companies worldwide.

“Over time, that’s going to grow, not shrink,” he said, adding that Google’s advertising also serves the government well because it promotes Chinese business globally.