CHINA INFORMATION TECHNOLOGY LAW NEWSLETTER
Vol. 2, No. 16 - December 5, 2001
TOPICS THIS ISSUE:
- China to Abolish Laws Banning Overseas Presence in Telecom
- Massive shut down of Internet bars in China
- China E-commerce Development
- China Broadband: a Major Force in Internet Services
- China Netcom and GRIC Communications Join Forces
China to Abolish Laws Banning Overseas Presence in Telecom
China has decided to abolish two laws banning overseas investment in its telecommunications sector.
A source with the Chinese Ministry of Information Industry said that the move, to be effective as of December 11, represents part of China's efforts to meet its commitment to further opening its market after it enters the World Trade Organization.
The laws to be abolished are the Provisional Regulations on the Administration of Examining and Approving Telecommunications Businesses issued on September 11, 1993, and the Provisional Regulations on the Administration of the Telecommunications Market enacted on November 10, 1995.
Both laws prohibit overseas-funded businesses in China as well as overseas individuals, enterprises, and other bodies from entering the Chinese telecommunications market.
(Source: Xinhua News Agency)
Massive shut down of Internet bars in China
Over 17,000 Internet cafes were shut down by the Chinese authorities for allegedly not having blocked websites that are considered subversive or pornographic. Besides the shut down, 28,000 bars have been ordered to install the software that makes it possible to block certain sites.
It is estimated that the number of Internet users in China is around 27 million and that about 4.5 million of those depend on being able to use Internet bars. Other numbers provided by the government in Beijing suggest that only about 50% of the bars actually have installed the software. Beijing issued regulations last year that introduced the requirement to use the software as a tool to control the use of the Internet.
The point of controlling the accessibility of certain materials is political since it is feared that the Internet may be used as a forum for political dissent. At the same time the government wishes to encourage commerce through and over the Internet, which causes a conflict situation.
During the APEC meeting held in Shanghai in October, many previously blocked websites, particularly the websites of a number of news agencies, were opened only to be closed again after the meetings were over.
(Sources: New York Times, Newsday)
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China E-commerce Development
Chinese information technologies have undergone great and rapid development in China, but despite this there are factors hampering the growth of e-commerce. Some of the reasons are the high costs of Internet access and the lack of a nationwide credit card system. Also, slow and uncertain delivery, lax network security, and lack of awareness continue to be problems. Furthermore, lack of language skills and little information concerning business opportunities on the Internet add to hindering development.
Steps that are taken to ameliorate the situation are initiatives such as the gradual breaking up of the monopolistic situation in the telecommunications service providers. There are also efforts to increase access to the Internet in the country as a whole as well as incorporating on-line payment systems.
The UNCTAD E-Commerce and Development Report 2001 discusses the strides China is making in the field of e-commerce. The report reveals that e-commerce transactions in China amounted to US $9.33 billion in 2000 and emphasizes that the China WTO accession, which will lead to liberalizations in telecommunication and financial services, will spur e-commerce development.
Other issues not included in the report concern the need for China to adopt more broadband-based technologies, which arguably can be used to improve education in rural China. Zhou Qiren, an economist at Beijing University, argues that the use of applications based on broadband networks will stimulate consumption. CNC, which is one of the biggest broadband network owners, will make efforts to improve its infrastructure to meet growing demands from subscribers.
(Sources: China Daily, Xinhua News Agency, Agence France Presse)
China Broadband: a Major Force in Internet Services
China Broadband Corp's joint venture in Shenzhen (China Merchant Big Sky Network Joint Venture) recently increased its customer base by approximately 15%. China Broadband is a large broadband Internet provider and it forms cooperative joint ventures in order to improve the quality of Internet access in China. The joint ventures are typically structured in a way that the Chinese partner provides its exclusive access to the existing network and help with receiving the correct government approvals, and the other party contributes the capital, management and IT technology.
China Broadband was the first to launch Internet access via cable television network in Chengdu, as well as enabled Internet access in cities such as Shanghai and Beijing and in the provinces of Hainan and Fujian. China Broadband also has an agreement with Jitong to provide fixed wireless solutions throughout China.
(Source: Business Wire)
China Netcom and GRIC Communications Join Forces
The agreement between the two companies will offer high-speed Internet access and corporate networks to business travelers in China.
GRIC Communications Inc. is headquartered in California and is a provider of Internet based mobile office communications services for ISPs, communications providers and enterprise customers. GRIC enables remote Internet access through more than 15,000 access points and is a member of the Wireless Ethernet Compatibility Alliance.
Under the agreement signed by the two companies, China Netcom will make its network compliant with broadband wireless access points available to GRIC Alliance members. Presently the number of China Netcom's active wireless access points in China is 13 but is expected to be over 60 by 2002.
(Source: Business Wire)
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