Microsoft CEO Steve Ballmer says his company will not pull its operations out of China. The issue arose after Google said it could be forced to leave the country after deciding to no longer censor website results.

Ballmer did not discuss the censorship issue directly, but told CNBC that "We've been quite clear that we're going to operate in China." He added that "I don't understand how [pulling out] helps us and I don't understand how that helps China." (Source: washingtonpost.com)

Questioned about recent hacking attacks on Google that appear to have originated in China and may have prompted Google's decision to threaten a pull-out, Ballmer said he didn't view the attacks as particularly unusual, pointing out that Microsoft is attacked many times each day.

Microsoft Partly to Blame For Google Attacks

Ironically, Microsoft has confirmed that a previously undisclosed security flaw in Internet Explorer was the method which the Chinese attackers used against Google. It's noted the problem isn't being widely exploited and is currently working on a patch to fix the issue.

There will likely be some criticism of Ballmer for speaking on the issue and failing to support Google's new stance on human rights and censorship issues. However, with the exception of Bing, which is a very minor player in China, Microsoft does not encounter the censorship issue in most of its products, meaning it isn't usually put in a position where it has to make moral judgments.

China's Copyright Situation "Abysmal"

The main focus of the CNBC interview was the issue of copyright infringement in China, with Ballmer saying "Intellectual-property protection in China is very, very bad. Abysmal." He argued that the trade between the US and China was unfair as the US is largely paying for physical goods, while most US exports to China involve intellectual property that is too often not paid for. (Source: pcworld.com)

Some observers have noted that this may actually be reason for Microsoft to continue doing business in China, as leaving the market could leave pirates feeling they have free reign to copy its software without risk of punishment.