Dell threat to leave China

Go Daddy Group, which sells internet domain names, said it would stop offering new ".cn" domain registrations in China, following the introduction of new regulations.

The Chinese government has said that anyone wishing to buy a website name in China will now have to provide full photo identification.

Go Daddy made the announcement during a committee hearing of the United States Congress dubbed "Google and Internet Control in China: A Nexus between Human Rights and Trade".

Christine Jones, Go Daddy's executive vice president, told the committee that the company was "concerned for the security of individuals" and that the new regulations would have a "chilling effect" on new domain name registrations.

Chris Smith, a Republican Congressman for New Jersey said: "Google fired a shot heard around the world and now a second American company has answered the call to defend the rights of the Chinese people."

Meanwhile, Dell, the world's third-largest PC company by sales, hinted that it may be considering switching its operations from China to India.

Michael Dell, the founder and chief executive of the company, made the suggestion in a meeting with Manmohan Singh, the Indian prime minister.

Mr Singh told the Hindustan Times: "This morning I met the chairman of Dell Corporation. He informed me that they are buying equipment and parts worth $25 billion from China (£16 billion). They would like to shift to safer environment with a climate conducive to enterprise with security of legal system."

The news came as Dell's first plant in India, in Sriperumbudur in Tamil Nadu, made its first export shipment. The plant has the capacity to make a million computers a year. So far, most of the plant's production has gone to the Indian domestic market, but it has now begun shipping to the Middle East. According to the Indian media, tax breaks given to Dell make it cheaper for the company to supply the Middle East, Africa and Europe out of India, rather than China.

A spokesman for Dell said the company had no imminent plans to pull out of China, however. "Mr Dell believes India also has an opportunity of becoming a hardware manufacturing hub, generating employment and adding to the country's impressive growth. Dell has not made any plans to shift its component spend at this time," he said.

Meanwhile, the fall-out from Google's departure from the mainland has begun in earnest, with China Unicom, the country's second-largest mobile operator, announcing that it will remove the Google search function from its new Android-based mobile phones.

"We are willing to work with any company that abides by Chinese law... we don't have any co-operation with Google currently," said Lu Yimin, China Unicom's president.

Unicom is the first company to drop its alliance with Google, alongside TOM Online, a Hong Kong-based internet company owned by the family of Li Ka-shing, Hong Kong's richest man and a key ally of the Communist government.
--By Malcolm Moore in Shanghai