DATE=4/27/2000
TYPE=BACKGROUND REPORT
TITLE=CHINA INTERNET - REGULATIONS
NUMBER=5-46209
BYLINE=STEPHANIE MANN
DATELINE=WASHINGTON
CONTENT=
VOICED AT:
/// EDS: THIS IS THE FOURTH OF FOUR REPORTS ON
THE INTERNET IN CHINA. THE FIRST TWO REPORTS
WERE ISSUED WEDNESDAY AS 5-46200 & 5-46201.
THE THIRD WAS ISSUED TODAY AS 5-46208. ///
INTRO: Should governments regulate commercial
transactions on the Internet or the content of
Internet web sites? That is a question facing
officials, business executives and consumers in many
countries. V-O-A correspondent Stephanie Mann reports
on how the regulation issue is being perceived and
handled in China, where Internet usage is growing at
dramatic speed.
TEXT: Maintaining social order is a priority for
China's leaders. Last year, when the Falun Gong
spiritual and exercise movement used the Internet to
organize large demonstrations in Beijing, Chinese
leaders and security agencies were taken by surprise.
The government launched a massive crackdown on Falun
Gong adherents and began looking for ways to have some
control over the Internet in China.
Anne Stevenson-Yang is the president of Twin Poplars,
a publishing and consulting company in Beijing. She
points to the rapidly increasing number of Chinese
using the Internet, and the great quantity of money
flowing to online businesses, and says that is
prompting the government to set up a regulatory
structure for the Internet.
Ms. Stevenson-Yang says the Chinese government seems
to have two purposes -- controlling information and
controlling commerce.
/// STEVENSON-YANG ACT ONE ///
On the commercial side, their concern is
controlling fraud, which is a very great
concern. ... On the information side, on one
hand they're very concerned about helping their
own state-owned media compete -- by funding, by
to some extent maintaining monopolies, by giving
them regulatory advantage. On the other hand,
they're interested in setting up a sort of
orderly gateway, so that they still have some
control over the flow of information going to
the Net.
/// END ACT ///
In March, at the annual session of the National
People's Congress, China's legislature, several
delegates proposed that China enact a law on Internet
trade, or e-commerce, as soon as possible. They
proposed regulations in the areas of security,
taxation, payment systems, consumer protection and
intellectual property rights.
Different Chinese agencies are establishing rules for
different aspects of the Internet. For example, the
China Securities Regulatory Commission has issued
interim regulations for online brokerage firms. A new
office, called the Internet Propaganda Administrative
Bureau, has been created to supervise the news content
of Chinese web sites.
Other agencies with key roles in Internet regulation
are the Ministry of State Security, the Ministry of
Information Industries, and the State Encryption
Management Commission.
Late last year, the encryption commission ordered all
businesses and individuals to register with the
government any products containing encryption
technology, which scrambles information to prevent it
from being read by others. Many companies, especially
foreign makers of Internet-related software, were
alarmed by the rule.
After receiving complaints from industries in many
countries, China issued a clarification in March, now
restricting only specialized hardware and software for
which encryption is a core function. The chairman of
the American Chamber of Commerce in China, Tim
Stratford, says the revised ruling shows China is
responsive to corporate concerns.
/// STRATFORD ACT ///
We were disappointed that there wasn't
opportunity to comment on the proposed rules
before they came out. But we've been very
encouraged that, as we have pointed out problems
with the rules or areas that were not clear,
that the government has been very active in
gathering views and in trying to respond to
them.
/// END ACT ///
The city of Beijing recently issued its own rules for
businesses to register their e-commerce operations.
The city says it aims to standardize Internet business
activities, protect the rights of enterprises and
consumers, crack down on illegal activities and
maintain social and economic stability.
Anne Stevenson-Yang says until now, China's regulatory
structure has not recognized the Internet as an
entity. She says that has presented some difficulties
when companies register their required business scope,
or plan, with the government.
/// OPT STEVENSON-YANG ACT TWO ///
There's no such thing as "Internet content provider"
in a business scope, for example. So, companies try
to persuade the regulatory authorities to let them
register as "Internet service providers" or "software
developers," because you have to develop databases if
you're going to create an Internet site, so that's
sort of a software-development function.
/// END ACT /// /// END OPT ///
Ms. Stevenson-Yang also says the Internet exacerbates
problems that already exist in China's regulatory
system, such as cracking down on fraud in conventional
commerce. She says accelerating trade through the
Internet leads to more channels for greater fraud.
But she does not believe the Internet itself needs
special regulations.
Tom Lasater agrees. Mr. Lasater is the chief
executive officer of Vertical Asia, a Hong Kong-based
company that provides specialized "portals" -- entry
points for Web surfers -- on the Internet.
/// LASATER ACT ///
I think, in general, there should just be a
complete de-regulation of the Internet industry,
because that's how the Internet grows quickly.
And I think China wants a strong Internet
industry, and they understand that you can't
control it, so they should just de-regulate it.
/// END ACT ///
The head of a Chinese Internet business, Peggy Yu,
does not agree. Ms. Yu is co-president of Science and
Culture Book Infotech Company, which is the largest
online seller of Chinese books. She says commerce in
China is developing very fast and the lack of adequate
regulations can hurt consumers and businesses.
/// YU ACT ///
There should be in place many, many regulations
to protect consumers and to protect commerce
interests alike. And in the U-S, there are
certain rules related to interstate commerce and
mail order and other things, and China is
working to develop those. I think we need that.
/// END ACT ///
Ms. Yu's online bookstore, called Dangdang.com
[dangdang-dot-com], currently sells only books
published in China. She points out that Chinese
publishing companies have the responsibility to make
sure what they publish complies with government
regulations about content. In the future,
Dangdang.com hopes to offer its customers books
published in other countries as well, and it remains
to be seen how that may be supervised or regulated.
/// REST OPT ///
Like many countries, China is concerned about the
availability of Internet sites with pornography or
violent content. In March, the city of Beijing
adopted a regulation to tighten control of Internet
cafes -- small restaurants or shops where patrons can
surf [browse] the Internet. The Xinhua news agency
says many cafe owners allow school-age patrons to
engage in online gambling and play pornographic or
violent computer games.
Under the new regulation, Internet cafe owners in the
Chinese capital must register their businesses with
the appropriate commercial administrative office as
well as with the police.
As online business activities expand in China,
government agencies at the municipal and national
level continue to devise new regulations to try to
keep the Internet manageable. (Signed)
NEB/SMN/KL/WTW
27-Apr-2000 11:41 AM EDT (27-Apr-2000 1541 UTC)
NNNN
Source: Voice of America
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