Google filtered terms the Chinese government required (by law), but did so by returning results saying that some items were filtered out specifically so users would know their results were filtered. Google never gave any information on who searched specific terms, but after some attacks on their servers in an apparent attempt to get this information, Google announced they would no longer filter searches for China. Talks on how to accomplish this broke down, and Google redirected their China site to Hong Kong, which has no censorship restrictions, but the Great Firewall seems to be filtering results.
They also removed the warning that the user's search results were being filtered [2].
To the best of my knowledge, the current status: User visits Google China - http://google.cn - This is a hyperlink to Google Hong Kong on the front page - IF user searches via Google.cn, the search results will be filtered by China not self-censored by Google. They will NOT be presented with a warning anymore. - IF user searches via Google.hk, from mainland china, the same thing will happen and the results will still be filtered. [3]
At this point, I don't believe the link to .hk Google serves as much use as it does a political statement.
[1] "Google stops Hong Kong auto-redirect as China plays hardball" http://arstechnica.com/tech-policy/news/2010/06/google-tweak...
[2] "Google's dropped anti-censorship warning marks quiet defeat in China" http://www.theguardian.com/technology/2013/jan/04/google-def...
[3] "China censors searches on Google's Hong Kong-based search engine" http://www.washingtonpost.com/wp-dyn/content/article/2010/03...
So Google has tried almost everything and has broken into China's Great Firewall. They even were warning users if the content was politically controversial. http://en.wikipedia.org/wiki/Google_China
I know it's entirely a business decision, but simply saying "Ok, forget about China" won't help either.
Groucho Marx
They're justifying it as "it's better than nothing at all". Take from that what you will but let's get the facts right.
edit: in an effort to not spread bad information, I'd like to retract my statement. It was based on outdated information.