What do Google's threat to pull out of China, iron ore pricing negotiations and US sales of arms to Taiwan have in common? They are all examples of calling China's bluff.

Google's sudden announcement that it is contemplating a withdrawal from China draws a line under four years when one of capitalism's most idealistic companies bowed to authoritarian pressure. As a price for gaining entry to China, Google swallowed its convictions and agreed to censor its search results. The decision caused much handwringing at the Silicon Valley company, which lost kudos among devotees who had taken to heart its philosophy of unbridled access to information.

When even the mighty Google caved in to Beijing's demands, Chinese authorities must have taken it as evidence that they could bring almost anyone to heel. If you want to do business in China, the implicit message went, you will do it on our terms. As economic power has visibly shifted to China and as companies flock to tap its tens of millions of newly affluent consumers, Beijing must have grown ever more confident that it could dictate the rules of engagement.