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Does anyone know if there could be a duplicate content problem?
(I note that a search in traditional characters will produce serps in traditional characters, but although an entry may be in traditional characters the actual site may be in simplified. So Google clearly knows the relationship between the encodings.)
I have done a few tests.
If I search for a phrase in traditional characters that only occurs in my Big5 site, it shows correctly in SERPS for google.com, google.com.hk, and google.cn. Similarly if I search for a phrase in simplified characters that only occurs in my GB site, it shows correctly in all three.
But if I search for certain keywords which occur on both sites, then the GB page shows in SERPS for all three search engines irrespective of whether I enter the search term in traditional or simplified characters. In effect anyone outside mainland China is being directed to the site in the wrong character set which also will be slow to load because it's behind the firewall.
Have you tried your tests with the Google Taiwan [google.com.tw] SERPs as well?
I did a quick test in Google Taiwan with a term that occurs on both sites.
TAIWAN
Searching "the web" with the term in traditional chars:
.cn GB site = #10 (with the title and snippet displayed in trad)
.com Big5 site = #14
Searching "the web" with the term in simplified character:
.cn GB site = #8
.com Big5 site = #15
Searching "traditional characters only" with term in traditional chars:
.com Big5 site = #6
I did the same test on Google China:
CHINA
Searching "the web" with the term in traditional chars:
.cn GB site = #9
.com Big5 site = not in first 40 results
Searching "the web" with the term in simplified chars:
.cn GB site = #6
Searching "simplified characters only" with term in simplified chars:
.cn GB site = #6
That's a lot more encouraging!
The fact that the GB site is higher in Taiwan may be due to it having a higher rank, rather than a language issue.