China Defiant as U.S. Seeks Answers About Google Web Attack

Chinese officials offered their first reaction Thursday to Google's (GOOG) decision to reject Chinese censorship -- and potentially quit the country altogether -- as the dispute over free speech and internet security threatened to create a geopolitical rift between the United States and China.

"China's Internet is open and the Chinese government encourages development of the Internet," Foreign Ministry spokeswoman Jiang Yu told Reuters. "China welcomes international Internet businesses developing services in China according to the law," she said. "Chinese law proscribes any form of hacking activity."