Hahahahaaaahahaha - dumb and dumber
This keeps getting better and better. Now Google is being cut off from news sources it obviously seeks to generate the news itself.
First off, I know the egos of these guys are enormous even for US calibrated measures of "normal", but hello. A group of Silicon Valley repetitive stain sufferers threatening a full sovereign government the size of China? The only conceivable reaction to that must have been outright laughter, followed by a fun session composing a response. I bet they have been drawing straws on who was allowed to deliver it, and bets must have been made on that person being able to keep a straight face throughout. The right response would have been "Let me hold the door for you on your way out", and I suspect that hasn't happened because it's more interesting for the Chinese to play this one out and see what's *really* behind it.
Secondly, sure. You're a US company and nobody has been along asking you to help out with data gathering. Google, the biggest privacy threat on the planet (even MS has never dared this one). And you go to China, and employ Chinese people, and you expect this to be clean and espionage free. They would not need to do a remote attack, sorry, and if they're that capable they would have hidden origin too. They are NOT stupid. These are the people that take a microchip and copy it - ever tried that? Umm, and the pot - kettle thing gets in the way, who sponsors that thing called "Echelon" again? Oh, but you don't spy on your own? Carnivore? FBI getting data with a Post-It (page 45 of the report)?
Thirdly, go uncensored? Ah, yes, you're not doing to well in China. So breaking the local law is the way to fix this? This from the company who censored CNET after they turned the tables on Eric Schmidt? Interesting idea, but at least it explains events in Switzerland and Japan as well. The bad news is that it won't work. US laws do not apply abroad, full stop, especially not if you piss off the locals.
The longer I look at this the clearer it is that the detected hacks were merely a pretext, an excuse. No idea what's really going on, but it's not some Silicon Valley dudes whining about a hack, unless they had "something to hide"..
This is a game at a much higher level, and I think we haven't seen all the pieces of it yet.
(yes, I'm paranoid, but simple answers do not appear to fit events).