Bitten by the censorship shark, Google is threatening to withdraw from China over orchestrated cyber-attacks targeting e-mail accounts of human rights activists and dissidents, users of google.cn and systematic hacking of valuable corporate secrets of major financial, defence and technology companies based in the United States from its computer systems.
Google discussed and aligned with the US government before making this dramatic announcement. The US government has made a formal protest to Beijing.
In a sense, the wheel has turned full circle. In 2006, there was much song and dance about Google (or Guge in Chinese language, localised for the Chinese market, which means 'song of the valley', alluding to Google's Silicon Valley roots) entering the world's largest market.
Then, Google (quite pragmatically) glossed over the fact that google.cn agreed to censor itself by key-word filtering - politically sensitive terminology, as China's party-state decreed, would be blocked by the search engine, in contradiction to the fundamental principle of free information.
But ironically in a diabolical sense, Google, whose unofficial motto is 'Don't be evil', is at the receiving end today. Google is suggesting that the attacks were political in nature, which could be interpreted as involvement of China's Ministry of Public Security.
Censorship in China, both real and virtual, exists - though there is debate about its breadth and reach. Long before the ongoing Google stand-off, there have been ominous cases - such as that of journalist Shi Tao, arrested in 2004, for using his Yahoo! email to send certain documents to the US-based pro-democracy Asia Democracy Foundation.
The whistle-blower was the Hong Kong branch of Yahoo!, which collaborated with China's party-state to divulge the sender's information (for the record, Yahoo! is now siding with Google in the dispute).
There is a twist in the story though - as unconfirmed reports suggest that Yahoo! was also targeted in the recent hacking. As for Shi Tao, he is languishing in prison.
If we rejig recent memory, both the uprising by ethnic Tibetans in March 2008 and riots in Xinjiang in the far west by the Uighur ethnic minority in July 2009, led to a virtual shutdown of Internet access. China has also blocked Twitter, Facebook and YouTube.
Despite criticism, China is building walls in the virtual world. Since 2000, it has stepped up web monitoring and spawned a whole new breed of Internet police. China has instituted the 'Great Firewall' to limit the reach of the virtual world - China's infamous 'Operation Golden Shield' regularly scans data for banned words or web addresses - incidentally, using routers made by US-based Cisco Systems.
Incidentally, not all Internet postings in China are spontaneous, but monitored by the web master, who decides on the nature of content to be made public. According to scholar Luo Gang, fake proxy servers with surveillance features track down errant citizens.
China has also instituted the real-name system which requires web users to register and obtain an official identity before posting on the Net. While some of it is justified by China as a preventive measure to pre-empt rumours, critics say that this violates privacy norms.
But despite control - and the walls - netizens are "bending it like Beckham". Debates such as that on the Green Dam web filter last year saw the party-state publicly backing off, because widespread grassroots opposition stalled the mandatory installation of the software on all computers in China - no mean achievement.
China's netizens have posted online videos such as those of public protests in China's rust belt (north-eastern China), or even of drunken police officers beating up a college girl (Henan province, 2008), usually overlooked by mainstream state-controlled media.
Videos, both salacious and activist, are free for all, but it is the latter that has led to greater state control with new regulations since 2008, whereby online video postings are limited to state-owned video-providers.
The Internet has revolutionised the way 400 million Chinese netizens think. The medium is empowering people by making information accessible and user-friendly. For China, this has turned out to be a double-edged sword.
While it is reaping benefits, China's leadership is struggling to control and manipulate an increasingly heady generation - better educated, richer and quite capable of leapfrogging control in ingenious ways.
China would have us believe that Google wants to exit, as it not only lags behind its Chinese rival search engine, Baidu, but has also failed its investors and shareholders.
Google's rival Baidu.com has 300 million visitors, a market value of $15 billion and 60 per cent of the Chinese market. Google has 80 million users and 30 per cent of the market, and revenues of $300 million, a fraction of its global sales of $22 billion.
However, analysts say Google has "higher value hits" - meaning more urbane users. They also contend that Baidu has government support, which Google lacks. Google provides useful translation, maps and access to a range of scholarly articles. If it does exit, it will be netizens' loss and Baidu's virtual monopoly.
On the one hand, the Google-China stand-off is symptomatic of the predicament of China's leadership, negotiating to find the middle way between doors wide open and control. In changed times, the uneasy balance between a free economy and regimented political control is unravelling and proving precarious.
On the other, it also puts a spotlight on the past business ethics of Google and Yahoo! -but nonetheless, the current position is a welcome and reassuring one. The move by Google is a moral stand, with a huge PR gain - for millions of users around the world (including the author), it conveys the message that users are safe with Google. It is indeed a step forward into making swimming in the Yangtze a ball-game of a different kind.
The author is a sinologist based in Singapore.