Looking east: Google is aiming high in the world’s second-largest market after caving in to censorship pressure. Picture: REUTERS
Looking east: Google is aiming high in the world’s second-largest market after caving in to censorship pressure. Picture: REUTERS

Google’s plans for China are even more ambitious than previously understood.

The internet giant is in talks with Tencent Holdings, Inspur Group and other Chinese companies to offer its cloud services in the world’s second-largest economy, according to people familiar with the discussions. They began in early 2018 and Google narrowed partnership candidates to three firms in late March, according to one of the people.

Trade tensions between China and the US now loom over the effort, making it unclear whether the plans will proceed, this person said.

The disclosure comes just days after the revelation that Google is developing a version of its search engine for China that would block information which the Beijing government considers sensitive.

If implemented, the move would mark a dramatic reversal by the Alphabet unit, which exited the mainland in 2010 after refusing to comply with its censorship practices.

The prospect of one of the most powerful US corporations bending to China’s will drew immediate condemnation in Washington.

'Onerous censorship requirements'

"It is a coup for the Chinese government and Communist Party to force Google — the biggest search engine in the world — to comply with their onerous censorship requirements, and sets a worrying precedent for other companies seeking to do business in China without compromising their core values," six US legislators, including Republican senator Marco Rubio, wrote in a letter to Google’s CEO, Sundar Pichai.

The goal of the cloud initiative is to run Google internet-based services via the domestic data centres and servers of Chinese providers, similar to the way other US cloud companies access that market. In most of the rest of the world, Google Cloud rents computing power and storage over the internet, and sells workplace productivity apps called G Suite that are run on its own data centres.

China requires digital information to be stored in the country and Google has no data centres on the mainland, so it needs partnerships with local players. Google Cloud chief Diane Greene said last week she wanted the business to "be a global cloud", but declined to comment specifically about China. Still, the company is seeking a Shanghai-based business development manager for its cloud business. The job posting lists "experience in, and knowledge of, the Chinese market" as a qualification.

A Google Cloud spokesman declined to comment. Inspur and Jane Yip, a Tencent spokeswoman, did not immediately respond to requests for comment.

A tie-up with large Chinese tech firms, such as Tencent and Inspur, a major cloud and server provider, would also give Google powerful allies as it tries a broader return to mainland China, where it pulled its search engine in 2010 over state censorship concerns.

After years of slowly rebuilding a presence in China, Google has pressed the accelerator recently. It is building a cloud data centre in Hong Kong and opened an artificial intelligence research centre in Beijing in January. Along with other Alphabet units, it has begun investing more in Chinese companies.

Plans for the censored search app in China have caused a furious debate about whether Google is putting profit over its mission to "organise the world’s information and make it universally available".

A cloud partnership for Google in China would help the company compete more with larger rivals Amazon and Microsoft. In late 2017, Amazon agreed to sell its Chinese servers and some other cloud assets to local partner Beijing Sinnet Technology. The move complied with laws introduced that year mandating the storage of data within the country and bolstering government control over the movement of information. The move mirrored a similar set-up between Microsoft and its local partner, 21Vianet Group.

In Tencent, Google would have an even more high-profile ally — but would also go up against local competitors including Alibaba, which operates a major cloud business in China.

China is the second-largest cloud market, but local companies dominate, making it difficult for outsiders, said Synergy Research Group.

"You can never say never, but that is an incredibly tough proposition," Synergy analyst John Dinsdale said. A June report from Synergy ranked Google fourth in the Asian cloud market, behind Amazon, Alibaba and Microsoft.

In January Google struck a patent-sharing deal with Tencent. The agreement came with an understanding that the companies would team up for developing future technologies.

Tencent operates its own cloud service and is building an ecosystem of partners that includes Cisco Systems, Nvidia and Deloitte, said Tencent’s website.

Google could host services, such as Gmail, Drive and Docs, on Tencent’s data centres, and the Chinese firm may suggest that existing cloud customers try Google’s offerings.