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What about intent and consequences?
While I'm not 100% certain how I feel about Google doing business in China, I believe it is unreasonable to assert in absolute terms that its choice is 'wrong'.
I think we all know by now that any company providing information in China must abide by the country's censorship rules. And the majority of us seem to believe that those rules are, in fact, 'wrong' (myself included). But your essay dismisses far too easily the fact that the net total information available to Chinese users is greater than before. It also completely ignores the fact that Google's is hardly the only viable search engine there -- Yahoo has been there for some time, and is complicit in much greater abuses than Google has been accused of; Alibaba and Baidu are present as well; and if Microsoft were to enter that market, I doubt anyone would raise an eyebrow. Google's absence would hardly be a great burden on the ruling party.
Therefore, Google can either stay out of the market and cede it to companies that clearly have _no concern whatsoever_ about implementing the Chinese government's censhorship and surveillance regime -- or it can enter the market and do what it can to work towards a more open system. It is already the only big search engine (to my knowledge) to warn users that its results are being censored. The company also explicitly chose not to make available those services which would expose its users' personal data to government scrutiny. Note that Google has a similar policy with regards to the censhorship laws in the US (DMCA requests) and Europe (Nazi Memorabilia, among other things). It is clearly in that company's interest to keep information flowing freely wherever possible.
So as I see it, you can either take an absolute stand that amounts to pissing in the wind, or you can make the hard (and apparently unpopular) decision to do business in China -- accepting that it will take a long time and a lot of work to make things better.
On a side note -- there is a very crucial difference between the problem of apartheid in South Africa and the current situation in China: many South Africans explicitly called for a boycott of their own country; Chinese citizens, on the other hand, have tended to be up in arms whenever Google is unavailable. If there was a clearer mandate from the Chinese citizenry requesting that information companies boycott their country, it would be a different story altogether.