While surprising, the action isn’t unprompted. According to a Google blog post, it is in response to a security attack that sought to spy on human rights activists.
… 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 e-mails themselves.
Third, as part of this investigation but independent of the attack on Google, we have discovered that the accounts of dozens of U.S.-, China- and Europe-based Gmail users who are advocates of human rights in China appear to have been routinely accessed by third parties. These accounts have not been accessed through any security breach at Google, but most likely via phishing scams or malware placed on the users’ computers.
Google says it will take a “new approach to China.” And by new approach, Google means that it could shut down Chinese offices completely.
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.
The Google move could be important for free speech, even if it comes off as a little dubious. The Google China office employs about 800 people at last count — 800 well-paid people that would be out of work. By threatening a total shutdown of what has become a huge player for the Chinese Internet, China may loosen some restrictions.
Google initially agreed to omit Web content that the country’s government found objectionable and the debate became a struggle for execs trying to align the censorship with their “don’t be evil” motto.