Silicon Valley has followed the business models in China before. It has always been What’s your China strategy? But presently, the 2010 update could be What’s you China headache?

This is all because of the Chinese allure getting stronger than ever. Although it is still a place deemed good to manufacture goods, where there are approximately 400 million Internet users and 700 million mobile-phone subscribers, making these numbers unmatchable in any other nations around the globe.

But the country is becoming less welcoming to foreign businesses. For one, Google’s frayed relations with the Chinese government over intellectual property theft and censorship spotlight the growing discontent over many Western companies. More so, American companies are certain to face even bigger tensions when China plans to control its currency tool – which many experts said would boosts China’s exports while limiting importations from the United States – such a very one sided business situation.

As what former deputy assistant secretary of state during the Clinton administration said, “It was inevitable after a certain time they would no longer roll out the red carpet for foreign companies and give them special treatment. But now we don’t have a level playing field. We have no tariff barriers (in China) designed to protect local companies.”

Like Google, many western companies are reviewing their commitments to China. Longtime Silicon Valley forecaster also added, “I think we will see more companies opt to quietly back away or at least limit their exposure in the Chinese market.”

In general, as China’s business sector continues to mature, the government has shifted emphasis to nurture its own corporate champions to become global competitors. China has emerged so quickly from the global recession while U.S. companies have been slowed down.

Presently, there are so many Western companies who are reluctant to complain publicly for fear of retribution from China. They are all frustrated by the official policies they say that prop up Chinese companies at the expense of foreign competitors.

It was once said that video and search may work effectively when separated. You know, nowadays, the two will always be separate and just cannot be mixed because there are two different niches. For one, search engines are perhaps for people looking for a document for a school project or report evidence while the video, might just be for people who wants hands-on experience. Different, isn’t it?

Not so long ago, Google sealed the deal on video search capabilities for its YouTube portal, saying it would provide auto-captions for all of its uploaded videos using a proprietary Google’s Speech Recognition Technology.

The plan actually began last November with a handful partner channels including PBS, Stanford University and National Geographic. As a matter of fact, it would be compatible in several worldwide languages in a few months from now.

The news establishes Google as the frontrunner in the internet programming arena. As a company who prides itself with effective search engine with accuracy hits of nearly 90 percent, they are now able to capitalize on its investment in speech to text technology to index videos, target ads, and create actual profit for YouTube.

But the most important news has yet to be told, the process is just simply deaf and hearing impaired friendly. They will be able to understand dialogue on uploaded videos, as this group of people had to constantly rely on the goodwill of YouTube users to manually add captions to their videos, which eats too much time.

Further, Google has now been removed from any ill will associated with Internet programming issues. This is truly one of the milestones of their company. And we do hope more innovations would come along the way.

Recently, Google has decided to come out swinging over what it says was a highly sophisticated concern – Chinese hacking into its computer systems. This incident has led many to be concerned about China’s business environment as far less hospitable than any place in the world. Since it made a surprise announcement, technology companies such as Adobe Systems, Rackspace Hosting and Juniper Networks has seconded motion that their security systems had also been breached.

Google has approached other victims to get the thing publicize but had been frustrated by their reluctance to come forward. In another report, Intel said that it cannot participate in the censorship of information by government as they have no evidence of a broad based attack on its systems.

But still, the American Chamber of Commerce in China is not stepping back. In a recent announcement, the Chamber reported that member companies are “optimistic, but concerned about China” – worried about the security of commercial correspondence, data, networks and the free flow of information, protection of intellectual property rights and uniform application of the laws.

The worries goes beyond information security. As a matter of fact, the Chamber reported that government edicts requiring local governments to buy Chinese products whenever possible. But despite the concerns, the Chinese market is still too huge to be ignored.

Statistically speaking, direct foreign investment in China doubled in December to 12.1 billion dollars. The Commerce Ministry of China has announced not so long ago that growth is up and the economy is booming. As such, that Google brouhaha is hardly a surprised.

But relationship is not so huge a concern as what spokesman Yao Jian said, “any decision by Google to withdraw from China will not affect Sino-US Trade Relations.” At least we have a reason to be relieved.