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Google's problems in China are bigger than Huawei

President Trump's ban on the world's second-largest smartphone maker is only Google's latest headache in the massive market.

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Google has long had a complicated relationship with China.

Getty

Google's troubles in China now include Huawei.

For years, the tech giant has been dogged by its relationship with the world's biggest country. In 2010, Google pulled out of the search market in China after co-founder Sergey Brin cited the government's "totalitarian" policies, including censorship of the web.

Since then, Google has tried to tiptoe back into the huge and appealing market, only to draw the ire of lawmakers and human rights advocates. Dragonfly, a censored search product for China, and an AI lab in Beijing have been particularly controversial.

Now Google has to deal with another issue in the country. On May 15, the Trump administration upended the tech world by effectively banning Huawei from doing business with US companies. A host of tech giants -- Qualcomm, Broadcom and Intel -- reacted quickly, reportedly cutting off business with the world's second-largest smartphone maker. Microsoft removed Huawei's MateBook X Pro laptop from its online store, an apparent reaction to the ban.

Google, too, reacted swiftly, saying that it would stop providing Huawei with technical support and that upcoming versions of Huawei's phones outside China would no longer get access to Google's Play Store app marketplace and its marquee slate of services, including YouTube and Gmail. The move was temporarily reversed on Tuesday after the US said it would issue a 90-day license for US mobile companies to figure out long-term solutions.

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The ban highlights Google's unusual position. Unlike other tech companies, such as iPhone maker Apple, Google's biggest product isn't available in China. Losing its relationship with Huawei will only make it more difficult for the search giant to eventually enter the lucrative market.

"They are walking more of a political tightrope than the other players are," said Bob O'Donnell, president of Technalysis Research. "Google's biggest money maker -- search -- isn't there."

Google declined to comment.

ReadSamsung has the most to gain from Google putting Huawei on ice

The search giant, of course, isn't the only tech company blocked in China. Facebook's service is blocked in China though it has advertisers in the country. Twitter can't be accessed in China. (You can check whether a website is available in China with the Blocked in China tool.)

Still, few tech companies are as obviously eager to be part of the market as Google, said O'Donnell. Dragonfly, the censored search product, would reportedly blacklist search terms disapproved of by the Chinese government, such as "student protest" and "Nobel Prize." It also may have tied searches to people's phone numbers.

Human rights advocates protested when news of Dragonfly broke last year. Google called work on the project "exploratory" and said it had "no plans" to launch a search service in China. When Google CEO Sundar Pichai was dragged in front of Congress last December, Dragonfly was a key topic in the grilling.

Google has also been criticized for its artificial intelligence lab in Beijing, which opened in 2017. In March, Gen. Joseph Dunford, chairman of the Joint Chiefs of Staff, said the search giant's work in the country is "indirectly benefiting the Chinese military." Pichai ended up meeting with both Dunford and President Donald Trump that month to discuss Google's relationship with China.

Now the search giant's relationship with Huawei is another source of friction in its overall relations with China. None of those sources of tension is likely to ease anytime soon.

"Google," says Technalysis' O'Donnell, "is in a particularly tough spot."

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