Google should obey Chinese government rules even if it decides to retreat from the country over hacking and censorship complaints, a Chinese government spokesman said on Tuesday.

Investors have sold off Google Inc (GOOG.O) shares after signs the company could soon shut its Web search site in China, Google.cn, two months after saying it would not abide by Beijing's censorship rules and was alarmed by hacking from inside China.

Google has not unveiled any plans, leaving users to guess whether the company may seek to unilaterally do away with the Chinese-mandated filters that censor content on google.cn or announce it is shutting down the site.

In what appeared to be a reminder that China would not welcome any abrupt steps, a spokesman for the Ministry of Commerce said Google should follow rules even if it decides not to stay in the country.

"On entering the Chinese market in 2007, it clearly stated that it would respect Chinese law," the spokesman, Yao Jian, told reporters in answer to a question about Google.

Google opened its Chinese search portal in 2006.

"We hope that whether Google Inc continues operating in China or makes other choices, it will respect Chinese legal regulations," Yao told a regular news conference.

"Even if it pulls out, it should handle things according to the rules and appropriately handle remaining issues," he said.

UNCENSORED SEARCH ENGINE

Yao said those rules included one that a foreign company report to the Commerce Ministry about plans to pull out.

Google's chief executive, Eric Schmidt, said last week he hoped to have an outcome soon from talks with Chinese officials on offering an uncensored search engine in that country of 384 million Internet users.

Many experts doubt China's ruling Communist Party would compromise on censorship. The Financial Times reported at the weekend the talks had reached an impasse and Google was "99.9 percent" certain to shut Google.cn.

A Google spokesperson said on Monday that talks with Chinese authorities had not ended, but added that the company was adamant about not accepting self-censorship.

China requires Internet operators to block words and images the ruling Communist Party deems unacceptable.

Internationally popular websites Facebook, Twitter and YouTube are entirely blocked in China, which uses a filtering "firewall" to block Internet users from other overseas website content banned by authorities.

source:reuters