Just posted today on the Official Google Blog by David Drummond, the corporate development and chief legal officer, Google announced that in Mid-December it detected a highly sophisticated cyber-attack. Upon investigation Google found that these attacks originated in China (though it does not specifically state the government was behind the attacks) and that email accounts belonging to human rights activists were targeted.
Update: The New York Times just put up an article saying that "people with knowledge of Google's investigation said that they had enough evidence to justify its actions."
In the blog entry Google described the extent of the attacks.
... we have evidence to suggest that a primary goal of the attackers was accessing the Gmail accounts of Chinese human rights activists. Based on our investigation to date we believe their attack did not achieve that objective. Only two Gmail accounts appear to have been accessed, and that activity was limited to account information (such as the date the account was created) and subject line, rather than the content of emails themselves.
In the blog Google does not specificly state the attacks came from the Chinese government, but it is hard to come to a different conclusion based on what they say next.
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.
So it seems like Google might be taking a stand. Google is not one of the major players in the China search world. I saw an estimate that Google holds about a 20% market share. The most common search engine over there is home-grown baidu.
Nart Villeneuve seems to come to the same conclusion on his internet censorship blog.
Google’s decision to re-asses their operations in China is courageous. I strongly hope that Microsoft, Yahoo! and others follow Google’s lead — as, to their credit, they have done in the past. In “Search Monitor Project: Toward a Measure of Transparency” I compared the censorship practices of Google, Yahoo! and Microsoft as well as the domestic Chinese search engine Baidu and found that all followed Google’s lead to some extent by at least disclosing their censorship practices to their users. I hope that they stand by Google.