The search engine has been available in China for years, but subject to government blocks. Now it is setting up the domain, but has agreed to censor the site itself, to appeal to Chinese authorities.
The media and bloggers have already jumped on the fact that one of Google's mottos is "don't be evil" in reporting the fact that Chinese people who type words such as Tibet, Taiwan, Falun Gong and Tiananmen Square into its search box will come up with restricted results.
In its defence, Google said that although removing search results was inconsistent with its mission, "providing no information (or a heavily degraded user experience that amounts to no information) is more inconsistent with our mission".
It has also promised to tell users when results have been censored, and said it would not offer its email or blogging services, Gmail and Blogger respectively, in order to avoid potential conflicts that can arise over users complying with local laws.
China is a sensitive issue for Western internet companies, which have to balance the ethics of, and public feelings towards, their involvement with an oppressive, undemocratic regime against the commercial value of tapping in to one of the biggest internet markets in the world.
Yahoo! and MSN also restrict their search results in the country, and Yahoo! came under fire late last year when it was reported that it had helped Chinese police secure the conviction of a journalist accused of leaking state secrets, by tracing an email to his computer.
In the Chinese search market, Google lags behind local player Baidu.
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