Google have something to smile about in China despite being banned recently by the Chinese Government.

It has been reported that Google China is poised to announce a revenue increase of 25% for the 2nd quarter of 2009.

Brand Republic also reported that Google China’s operating revenue increased by around 50% over the previous year.

This is great news for Google especially in such an unstable economy and with strong competition in China.

Google holds only 30% of the market in China, while the market leader, Baidu, holds 64%.

Around this time last year, we reported on Google’s lack of dominance in Asian countries and this doesn’t seem to have changed very much.

As for the recent ban of Google by the Chinese Government, this was in regards to “contentious content” from the Google China search engine. However, both parties have now resolved their differences with Google bowing to pressure.

Speaking to the media at the Cannes International Advertising Festival recently, Google CEO Eric Schmidt explained their position on the ban:

Officially, what I can say is: we will continue to meet with the Government to address their concerns, and we wish to communicate directly with them in regard to our services and progress in addressing this problem.

He also laid down a warning to other governments who are looking to ban them.

We explain if they do this [block freedom of speech and communication] what will happen. Sometimes they moderate their behaviour and sometimes not. If they don’t listen to us it is at their peril. “By ‘peril’ I mean it is what the citizens will do, citizens can no longer be restricted by the kind of strategies evil dictatorships [use]… you can’t keep people in the dark.

With Google back online in China, I wonder what effect this will have on their market share. Will it actually increase or does Baidu have too much of a stranglehold on the market? Feel free to share your thoughts below.