Google Inc (NASDAQ:GOOG) has had a rough relationship with China in recent years. Though the company officially exited the Asian country in the middle of the last decade, it’s services still occupy a grey area. The way the world works is shifting in 2013, and that means the world’s search engine may have to pick a side soon, or risk losing huge potential markets.

There are a few major changes that are driving the importance of China for Google Inc (NASDAQ:GOOG). The first is the great economic and social engineering project the company’s government is embarking on. They are attempting to transform China into a consumer economy, and one that will rival Western countries in wealth in years to come. The second reason is the presumed cap on advertising costs as budgets get stretched in the United States. On top of those two, Yahoo subsidiary AliBaba is going public.

Google Isn’t The Only Game In China

There are a couple of companies that have stepped in to fill Google Inc (NASDAQ:GOOG) shoes in China, but none of them have the kind of internet market power that the Mountain View company has cultivated in North America. Baidu Inc. (NASDAQ:BIDU) and Qihoo 360 Technology Co Ltd (NYSE:QIHU) are both battling for the search market in China, but that may not be the most important business to be in.

Just because Google Inc (NASDAQ:GOOG) rules the world from a search engine doesn’t mean there is only one way to rule the roost. Ali Baba is one of the most promising Chinese internet companies out there. The company maintains a huge network of e-commerce businesses including web portals and cloud computing. It has a more direct path to monetization, and it might be able to leverage its base and take control.

China is growing. If the country’s government manages the economy properly it will become a fully-fledged consumer economy over the next ten or fifteen years. China is going to be full of disposable income, and the country’s own private enterprises will be only too happy to take a chunk of it for themselves. Google Inc (NASDAQ:GOOG) needs to watch out before its overran in Asia.

China Floweth Over

The big problem for Google Inc (NASDAQ:GOOG) is not losing China, it’s losing a global monopoly on the internet. Google has a huge amount of power throughout the world. If it loses that power things begin to look less stable for the company. Chinese internet companies may be able to beat Google in order countries. It will start with those bordering China, but it may reach as far as Europe.

The rest of the world has never been as profitable for Google Inc (NASDAQ:GOOG) As the United States. One of the major reasons for that is the company’s services aren’t as popular overseas. Google doesn’t have the loyalty of Europe. The company cannot afford to ignore China. If it does, competitors shielded by the country’s firewall may run amok.

Disclosure: Author represents that he has no position in any stocks mentioned in this article at the time this article was submitted.