"We have all along maintained a policy of opening-up and welcome foreign investments in China," Yao told reporters in Beijing.
"But the prerequisite is they should respect and abide by Chinese laws.
"We hope Google will abide by the law, no matter whether it continues to do business in China or makes other choices."
Yao said Beijing was "opposed to politicising business issues", an apparent jibe at the US government and legislators for interfering in the issue and for criticising internet censorship in China.
In January, Google threatened to abandon google.cn and maybe leave China altogether over what it claims were cyberattacks aimed at its source code and at the Gmail accounts of Chinese human rights activists.
"Google has not stopped censorship. This is a rumour. We do not have any update to share"
Marsha Wong, Google China spokeswoman
The company has since continued to filter results on google.cn, but said it will not do so forever.
"Google is firm in its decision that it will stop censoring our search results for China," Nicole Wong, the Google vice-president and deputy general counsel, told the US House of Representatives Foreign Affairs Committee last week.
"If the option is that we'll shutter our .cn operation and leave the country, we are prepared to do that."
Last week, Li Yizhong, the Chinese industry and information technology minister, warned the Google about facing "consequences" if it were to violate Chinese law by ending its filters, saying such a move would be "irresponsible".
The Financial Times citing an unnamed source reported at the weekend that Google was "99.9 per cent" certain to move forward with plans to abandon google.cn.
Marsha Wang, a Google China spokeswoman, however told AFP on Tuesday that no changes had been made for now.
"Google has not stopped censorship. This is a rumour. We do not have any update to share."