It was heartening to discover today that Google is finally standing up to China’s censorship policies. By threatening to pull out of China and announcing it will stop censoring its search results in the country, Google is doing an about face – in the right direction. (Email leak has Google threatening to leave China). The announcement comes after Google discovered that computer hackers had tricked human rights activists into opening their e-mail accounts to outsiders. According to a post on Google issued today (A new approach to China), US Google executives determined that enough was enough:

“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.”

If Google were to pull out of China, it could mean cutting off access to a country with the most robust economy and the largest number of Internet users. However, Google’s search-share, 29%, is still dwarfed by Baidu.com in China, which has 62%.

Why should US consumers care? First, by setting forth a clear message that it is willing to lose business for ethical reasons, Google can set a tone for the new decade that resonates with its professed corporate culture:  You can make money without doing evil. Second, if Google is to be viewed as an ethical player in such important initiatives as Google Health, it must show good faith as a global citizen. Would you trust Google with your personal health information if it is willing to sell out Chinese human rights activists for profits?

For much of the last few decades, nation-states have played catch-up to technology in terms of controlling the flow of information. Fax machines got the word out about Tiananmen Square in 1989.  Technology and media provided crucial to the fall of the Berlin Wall. Today, blogs and Facebook are undermining the information grip of the Iranian regime. China has proven that nations can successfully counter the free flow of information by dangling the carrot of market access to the world. If Google holds firm, it may be the tipping point in China, proving to the world that capitalism without democracy has a hollow ring to it.