China is satisfied that U.S. Internet giant Google Inc is complying with Chinese laws after it tweaked the way it directs users to an unfiltered search page, a senior official said on Tuesday.

The comments from a Ministry of Industry and Information official largely echoed previous Chinese statements, but are still likely to be seen as good news for the company as Beijing has been coy about its long-term future in China.

Google is also in the process of ending its partnership with Chinese community site Tianya, in which it owns a stake, the firm said in a blog post on Tuesday.

As it was announced earlier this year, this week we will be ending technical cooperation with Tianya on Tianya Come and Tianya Questions, Google said in its official Chinese language blog. (http://www.google.com.hk/ggblog/googlechinablog/)

Google bought the stake in Tianya.cn in August 2007.

Google is trying to achieve the delicate balance of ending self-censorship of searches while holding onto its business foothold in a country where control of information has been key to ensuring the Communist Party's decades in power.

Google's market share in China continued to slip in the second quarter, falling to 27.3 percent from 29.5 percent in the first, according to data from research firm iResearch.

Before its high-profile spat with Beijing, Google was slowly gaining ground on China's top search engine Baidu. At the end of last year, Google's market share was 32.8 percent.

Guxiang, a company that operates Google's websites in China, had committed to abide by Chinese law, and ensure the company did not provide illegal content, said Zhang Feng, head of the ministry's communication development division.

After examination, we have concluded that it has basically met the requirements according to the relevant laws and regulations, Zhang told a news conference.

Google unexpectedly warned in January it might quit China over censorship concerns and after suffering a hacker attack it said came from within the country, but eventually terminated its Google.cn search service and started rerouting users to its unfiltered Hong Kong site.

In early July the company ended automatic redirection, saying Beijing was unhappy about the system and would not renew Google's operating license if it continued.

Visitors are now invited to click through to the Hong Kong page instead of being sent straight there. China's firewall remains in place however, meaning most sensitive sites turned up on searches are inaccessible from within the country's borders.

Google's move was seen as a sign that the firm would fight to hold onto as much of its China business as possible, and Beijing said earlier this month it had renewed its Chinese operating license after the company made improvements.

Guxiang accepted that government regulators will have the right to supervise content provided by the firm, Zhang said, declining to comment directly on Google's provision of the link to its uncensored Hong Kong page.

As for the question of Hong Kong, this is an operational act made by the company itself, he added, without elaborating.

China's decision to allow Google to continue operating in China apparently resolved a months-long censorship dispute that had threatened the U.S. company's future in the world's top Internet market by users.

The move also removed another thorn in U.S.-China relations and reflects Beijing's desire to be seen as friendly to major foreign firms in spite of ideological differences, analysts said.

(Reporting by Ben Blanchard and Melanie Lee; Editing by Ken Wills and Alex Richardson)

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