China requires approval for foreign firms to publish online

February 19, 2016 by Gerry Shih

A new Chinese regulation announced this week will require foreign companies and foreign-Chinese joint ventures to acquire approval before publishing content online, in the government's latest move to tighten control of the digital realm.

In an apparent countervailing trend born of the need to shore up slowing growth and flagging foreign investment, the government on Friday also announced plans to make it easier for foreigners to live and work in the country under new rules for obtaining permanent residency.

Under the new regulations going into effect March 10, firms with at least part-foreign ownership will be banned from publishing on the mainland text, pictures, maps, games, animation and sound "of informational or thoughtful nature" without approval from the State Administration of Press, Publication, Radio, Film and Television.

Chinese law has long required Internet service providers to hold an operating license that can only be obtained in partnership with a Chinese firm, and the new regulations do not represent a wholesale revision of existing rules or practices, experts say.

But the new policies underscore the increasingly restrictive political climate in China, where the leadership has sought to rein in public speech and thought, with an emphatic focus on the country's fast-growing Internet industry.

The explosive rise of new media, ranging from social media messaging services to streaming TV shows, for instance, has prompted Chinese censors to introduce a slate of new regulations so it could police digital and social media as closely as it did traditional publications. The country's top Internet regulator has repeatedly warned that an untamed cyberspace would pose a risk to domestic security and the government should decide who to allow into "its house."

"China is still focused more on maintaining the social stability and national security interests when it comes to making policies on the Internet industry, while caring less about the commercial and individual interests," said Zhang Zhian, the director of the school of communication and design at Sun Yat-sen University.

As part of the new regulations, online publishers must store their content on servers in the mainland, a stipulation that gives the government expanded legal powers regarding data access and control. Beijing has made similar data storage requirements for technology firms as part of new cybersecurity and national security laws passed in the past year.

Paul Gillis, a visiting professor at Peking University's Guanghua School of Management who studies Chinese-foreign joint ventures, said China has introduced regulations in recent months that explicitly give authorities censorship powers under the law that they have long had in practice.

"From a practical standpoint it's not much different," he said. "There was tough regulation of anything online before and they shut down anything they thought disrupts social order. But a lot of what might have been common practices before are being put into legislation so China can argue it's operating under the rule of law."

Meanwhile, the new guidelines issued by China's Cabinet aim to expand the categories of foreigners in China eligible to obtain the Chinese equivalent of a U.S. green card. Procedures will be simplified and restrictions relaxed on foreign students seeking jobs in the country.

China's economy posted its slowest growth in a quarter century last year, expanding 6.9 percent. Officials expect growth this year of between 6.5 and 7 percent, while once-robust interest among foreign investors is falling amid complaints over excessive government interference.

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