This is congruent with another report that mentioned
  Google put its Google China staff on paid leave and
suspended their access after the incident:

http://www.guardian.co.uk/technology/2010/jan/18/china-google-cyber-attack

      A lot of evidence points into google treating it as an internal security leak
, and is conducting an internal audit on all its China employee. It seems
Google has very good external security but is very vulnerable from inside .In the hacking very likely some google China employee was found to have leaked
information that facilitate the attack. And that explain Google management's fury
  as it would be a moment as shocking for them as the
“Cambridge Five” for British government .

    Firstly it would mean Google can no longer count on its Chinese
employee’s loyalty when it clashes with their loyalty to China, so if
it wants to operate in China it has to continue with a tainted staff, though that
should have been expected for any corporation operating in a foreign country.

    Secondly it would mean there are serious security loopholes in Google
internal management as it failed to implement a safety mechanism to
check or limit inside attack.It this is true, pile on the fact that
Google is already facing increasing privacy scrutiny in the US and
Europe,it would be a heavy blow to Google’s reputation as a whole as
it sends out the message that Google cannot be trusted with your data
IN ANY COUNTRY.

    In my opinion Google failed to take care of its own fences,However
  Google’s genius lies in politicizing this incident ,as
it completely shadows the question of Google’s own internal security
vulnerability, as evidenced by the blanket omitting of this question
in most of the news reports I have seen.It became a Good vs Evil in the news ,
and you cannot criticizing Good ole Google
without being grouped with the Evil Chinese Communist, can you?

The ordinary citizens in China (at least those over 20) know quite well what happened on Tiananmen in 1989,just talk to any Chinese cab driver.

Most Chinese don't think it has much relevance to today's business. While they agree the government in 1989 committed horrible crimes, hell it is two decades ago and both China and Chinese government has changed a lot. Most of Chinese are happy with the current government.

As for Tiananmen square most think it will resolve over time . Even a lot of 1989 demostrators support the Chinese government.Here is an interesting interview.

Here I quote the most relevent part

" Q. But what Deng achieved - could he not have done it within a more democratic system? Did there have to be the ruthlessness?

After going to the US for five or six years, I saw that the level of democracy there can only happen in a society with a certain level of education. What the people of China now need is leadership. China is one century behind the US, and you canâ(TM)t expect us to change that fast.

This is why many Asians resent it when Americans try to insist that the Chinese adopt their style of democracy. Shanghai may be ready, but if you go out to the surrounding areas, youâ(TM)ll see it just isnâ(TM)t possible, that it will take more time. I believe that one day, China will have Taiwan-style democracy, but it has to be built on a strong economy.

Q. I agree that Western-style democracy isnâ(TM)t right for China today. But canâ(TM)t there be a compromise? Canâ(TM)t the government be strong, without tolerating abuse of the poor by corrupt officials, without tolerating the marginalization of AIDS victims, without arresting kids who write about government reform on the Internet?

The way we view human rights is so different from the Westâ(TM)s. We have 1.3 billion people and many of them go hungry. Putting food on the table and a roof over its peopleâ(TM)s heads is what our government has to worry about. AIDS, corruption, the Internet - that is all secondary to the leadership of 1.3 billion people. If I were running China today, I would not be able to hear all the different parties. I would have to have my own agenda and stick to that agenda. I believe that if a secret vote were held today most people in China would vote for the CCP.

For more than 150 years, starting with the Opium Wars, our national pride has been bullied by the Europeans, the Russians, then the Japanese. Now China is an economic and a military power. And it has no intentions of being aggressive. So I am not giving up my Chinese citizenship. Ten years ago I would have jumped to do that.

Looking back, I firmly believe the government did the right thing, though they could have handled it better. We paid a high price. Our leaders in 1989 could have shown greater human skills and greater negotiating skills. But letâ(TM)s live with Communism for now and change things one thing at a time. The Chinese now have a much better life than they did 100 years ago. Not so long ago, my house was the first in our hutong to have a television set. The whole neighborhood would come to our backyard and sit on the ground to watch. It was just a 9-inch TV, and we put a large magnifying glass in front of it so everyone could see - that is how inventive we Chinese had to be. And now, so many families have two color TVs. They enjoy a better life, they have pride, they just put a man into space. Over the next couple of decades, China will probably overtake Japan. The world now needs China as much as we need them. "