Is the Sino-Google Cold War Heating Up?

A white paper produced by China's Ministry of Industry and Information Technology implicated Google (NASDAQ: GOOGL  )  as a roadblock in the development of homegrown mobile operating systems, Reuters reported.

The white paper, which was posted on the Internet last Friday and released to the Chinese media today, said: "Our country's mobile operating system research and development is too dependent on Android ... While the Android system is open source, the core technology and technology road map is strictly controlled by Google."

The paper goes further, saying that Google has put off the sharing of software code with some Chinese companies that are working on their own operating systems.

The Ministry may have been inspired by the incident last fall when Google allegedly threatened Taiwanese company Acer with the cancelling of its Android license if it continued to develop its A800 smartphone for use with the Aliyun OS. Aliyun is an Android derivative developed by the mainland Chinese company Alibaba.

A Great Wall of ambivalence
Google has found China to be a problematic place to do business. In 2010, after facing up to the fact it had been acquiescing to the Chinese government's Big Brother approach to communications control, it pledged to stop censoring Google.cn.

That decision didn't sit well with the authorities, and now when Google.cn users type in unacceptable search queries, they are met with error messages, such as "This webpage is not available."

But Android has been hugely successful in China. The largest Chinese phone makers, Huawei and ZTE, as well as makers of the least expensive white-label smartphones, all use Android as their operating systems.

During the third quarter of 2012, Android powered 90% of all smartphones on the mainland, compared to the iPhone's 4.2% share, according to Chinese research firm Analysis International.

Though the Ministry did not prescribe what should be done about Google's Android domination, China watchers see this as a possible harbinger of more hoops that Google will have to jump through to do business on the mainland.

Reuters quotes Duncan Clark, chairman of technology consultants BDA, as saying, "In China, regulators regulate regularly especially where they position the regulations as helping out domestic companies."

If so, Android's success may cause Google's first real challenge to its global smartphone OS dominance.

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