[ElBarto]

From the perspective of Google it is obviously important to be present in the largest market on Earth both commercially and strategically, and not to let its competitors have it all for themselves.

From the perspective of the US (Google is an American company) it is obviously tactically and strategically important to have the best information possible on what is going on in China. This is much, much easier to achieve when American companies are present "on the ground". For example, I am sure that this project gives the US a pretty good insight on what the Chinese government does. It would be much more difficult to ask Tencent how the Chinese system works, wouldn't it?

[seanmcdirmid]

Google doesn’t really have world-wide competitors in the Chinese search market. Baidu is basically a large scale healthcare scam, while Bing is struggling

Foreign companies face different rules in China when compared to Chinese ones via selective enforcement of law. They will not be exposed to the same real Chinese system.

[ElBarto]

Google's market share in China is basically 0... But apart from that no competitors, LOL.

[seanmcdirmid]

From a world wide perspective, google yielding the search market to China has yet to effect them since their competitors operating there are not at all competitive.

Edited my origins comment for clarity.

[ElBarto]

That's the standard short-term vision: Oh this won't affect us this year so we don't need to care...

[seanmcdirmid]

At this point, it is unlikely that Baidu will ever be competitive outside of China, especially with protectionism that prevents it from actually having to compete with google in any case. Bing has had its chance and hasn’t performed.

Likewise, search is increasingly less relevant as time goes on, so longer term vision likely drifts away from it anyways (which is more likely the real reason why google wants back into China).