27 October 2016
The regulations are the latest step by the ruling Communist Party to rein in the internet. Photo: AFP
The regulations are the latest step by the ruling Communist Party to rein in the internet. Photo: AFP

Foreign firms worry about impact of China’s new online rules

Foreign businesses operating in China fear new rules on online publication may mean further restrictions.

The regulations are the latest step by the ruling Communist Party to rein in the internet, seeing the web as a crucial domain for controlling public opinion and eliminating anti-Beijing sentiment, Reuters said.

The rules say online content publishers should “promote core socialist values” and spread ideas, morals and knowledge that improve the quality of the nation and promote economic development, the news agency said.

The regulations, set to come into effect on March 10, will prohibit foreign ownership and joint ventures in online publishing and stipulate that all content be stored on servers in China.

If an approved Chinese entity wants to engage in a “cooperative project” with a foreign-related enterprise, it must get approval, the rules say.

Some studying the rules worry that, broadly interpreted, they could be used to halt some foreign businesses operating in China and shut down websites, while imposing greater limits on what domestic firms can publish online.

Since coming to power, President Xi Jinping has presided over online censorship on an unprecedented scale, and sought to codify this policy within the rule of law.

“We hope this does not signal greater internet restrictions,” said Ken Jarrett, the head of the American Chamber of Commerce in Shanghai, which has asked member companies and lawyers for an interpretation.

“China says it wants to transition to a more innovative, knowledge-based economy. Allowing the free flow of information is essential to that effort.”

The Ministry of Industry and Information Technology, and the State Administration of Press, Publication, Radio, Film and Television jointly issued the rules.

According to the rules, online publishing includes digital work in the fields of literature, art and sciences, such as texts, images, maps, games and audio-visual reading material. Online games must receive advance approval from authorities.

Lawyers and legal scholars say the regulations are likely aimed at online entertainment and educational media.

The country’s internet regulator, the Cyberspace Administration of China, is also proposing broad new regulations to cover online news services.

Many of the world’s biggest internet platforms, like Alphabet Inc.’s Google services, Facebook Inc. and Twitter Inc., are inaccessible in China.

In recent years, Beijing has pursued a raft of laws and regulations, including a new national security law and a draft cyber security law, that have raised the hackles of foreign business groups fearful that China could compel companies to turn over crucial intellectual property to the government in the name of security.

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