Date
26 July 2017
Under the proposal, the Chinese government would take a seat on the board of big online companies like Tencent. Photo: Reuters
Under the proposal, the Chinese government would take a seat on the board of big online companies like Tencent. Photo: Reuters

Beijing proposes owning minority stake in web firms

Beijing could tighten its control over the internet further if a proposal by regulators for the state to take 1 percent stakes in major mainland internet companies comes to fruition.

China’s internet and media regulators have been seeking companies’ opinions on the proposal, The Wall Street Journal reported, citing unnamed sources.

Under it, the government would take a seat on the board of the firms where it buys the “special management shares”, giving it more direct influence over policies on content and censorship.

Companies that could be affected fall under the oversight of the Cyberspace Administration of China and the State Administration of Press, Publication, Radio, Film and Television.

They include Tencent Holdings Ltd. (00700.HK), Baidu Inc., NetEase Inc. and almost all the big online media companies.

The proposal is vague and may not materialize, the report said.

Any such move would face a host of complexities, not least of which is that many Chinese companies are listed on stock exchanges abroad and could face resistance from exchange operators, regulators or other investors.

Even if it fails, the existence of such a proposal suggests an even greater desire for control among the authorities, who already heavily censor Chinese online companies.

Companies are already required to censor themselves, an effort that can include hundreds of employees monitoring and deleting content that the state may find offensive.

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