China’s Internet ‘Whitelist’ to be Business Registration Procedure

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Op/Ed Commentary: By Chris Devonshire-Ellis

Jan. 3 – With the news that China’s Ministry of Information has promulgated regulations requiring the registration of all websites in China prior to them being permitted for public access viewing in the country, the regulations provide for certain new requirements to be levied on foreign invested businesses if they wish their sites to be accessible. This effectively manifests itself in the creation of a “whitelist” whereby overseas websites requesting access to readers in China will have to register beforehand, be vetted, and then approved.

While it is not yet certain whether the rules will actually be enforced, the fact is they could be in the buildup to a potentially difficult event, such as the death of the Dalai Lama, or major financial problems. Both could happen, the Dalai Lama is 74 and said to be ill, while many are suspicious of the true state of China’s banking system. Property, stock and other asset bubbles are appearing, and in a one party state investors in these prefer to blame the government rather than their own naivety for sudden and damaging downward movements. The government has already stated its primary objective is maintaining “social stability,” and curtailing what information comes into (and to a lesser degree) and out of the country is a proven method of quelling unrest through media and social channels before it spreads too far.

The implications should the measures be adopted are huge, and will change the face of investment into China. Certain businesses may choose to relocate operations out of the country, or reduce their total exposure. These would include education facilities – joint ventures between Chinese universities and prestigious overseas academic institutions may well cease, students being unable to access overseas study material. Research and development also would be seriously affected, with China having set its stall out several years ago as a regional R&D center, hampering access to the web is bound to have a damaging effect. Such academic and R&D processes would relocate, meaning possibly a boom in academia for Hong Kong and Singapore, and almost certainly a brain drain of China’s brightest. The list of impacted businesses stretches on and on, just a little imagination on the subject will reveal a myriad of possibilities for withdrawal. Overseas media would be disappear, and it is not difficult to imagine the status of many English language blogs written about China – 90 percent would disappear from China viewing, especially those who have shown a history of what the Chinese would regard as inappropriate content. That would create short-term internet uproar in that community, however damage would be limited. Many such blogs, while vociferous have little long-term impact beyond the ego of the individual concerned. For international media however, the impact would be greater. Long regarded with suspicion anyway by China’s censors, accessing international news from the perspective of a qualified independent journalist would be greatly diminished as news permitted into China would be vetted by the government prior to distribution. It remains to be seen whether this would be selective, with certain pages blocked while others may remain online in China. However, one thing is clear, international media will need to be more cautious about its China coverage if it wants to reach readers in the country. In this manner, China is flexing muscles externally from its borders to influence what is and is not written about it.

In terms of businesses that require little R&D or interest in political issues, the process to register for whitelist acceptance would almost certainly be folded into the current business registration procedure at a preliminary (ie: prior to capitalization) stage. Businesses already extant here will either be given deadlines for registration or find them introduced, possibly in twelve months time, as part of the annual registration procedure. In this way China can weed out businesses that take consistent anti-China stances or whose staff and personnel engage in negative commentary. Companies that merely provide operational information will have nothing to worry about save a small administration process each year to renew their license for their website access.

However, the deeper message being sent by the ministry is worth considering. In one scenario, it appears possibly the precursor to a major upcoming problem already known to the government. In which case, such measures are being introduced to help China’s security cater for the fallout. The death of the Dalai Lama would possibly be such an event. In the other, the message sends a different signal: China has reached an economic point of self sustainability, and is in a position to both keep its people satisfied and pick and choose investments it wants without having to put up with media and political interference from external sources.

If ratified the rules will change how we approach China commentary, and introduce perhaps much-needed self censorship into what can often be perceived at worst as a media circus of ill informed, provocative comment, and weed out the offenders. Curiously, such measures may in fact highlight better standards of media journalism. China has already demonstrated it can and will engage, debate and move on if done so according to set protocols. The question therefore is how far China will bend to permit qualified debate and discussion as opposed to fully shutting the door on it.