China to take its time approving Googerola deal
Why the wait? Apparently it’s not because China has serious plans to scuttle the deal – Google’s acquisition of Motorola is unlikely to have a negative impact on Chinese businesses, and this is also a year when the Chinese government less likely to rock the boat without good reason, as the Communist Party will be introducing a new set of leaders at their congress this year.
Edward Yu, CEO of Beijing-based Analysys International, explains the mood in China this way, “This year is quite sensitive, with a new lineup of leaders in the central government, I don't think there will be anything extreme, warm or cold, or retaliation.”
Instead of wanting to scuttle the deal, China appears interested in using the regulatory permission process as leverage to encourage Google to move its search business back to mainland China. Google once ran their business there, but moved it to Hong Kong after several hacking attempts and a series of disagreements with the Chinese government over censorship of search results.
The end result may not be terribly onerous – Google is reported to be picking up the pace of hiring in China again, and a future expansion back onto the mainland might end up being a good thing for them. We imagine, though, that all things being equal Google would rather get approval for the Motorola deal sooner than later. This year it seems patience may have to be a virtue.
source: Reuters via Tech Crunch