China's Internet Crackdown

Cellular News  May 11  Comment 
China's largest microblogging service is unveiling a controversial new set of guidelines that aims to officially restrict what its users can post online. Click here for more.


China's reputation for censorship extends to its restrictions on Internet access in that country. This will impact Chinese bloggers, who may have to register their real names with the government, as well as search engine companies and Internet service providers, who may need to restrict user access to the Internet according to the orders of the Chinese government.

Despite skyrocketing Internet usership, Internet companies doing business there must perpetually be en garde. Chinese government censorship policies put a heavy hand on blogging, search engines, content providers, and even technology tools providers in China. This heavy hand can greatly affect investment opportunities. For example, Google's failure to adhere to Chinese search restrictions ultimately resulted in China blocking access to Google for a time and referring all the search traffic to (BIDU), Google's leading competitor in China.

Who Wins and Who Loses

  • Cisco Systems supplies routers to the Chinese government, which uses them to censor webpage queries.

Café Crackdown

Between February and August 2004, the Chinese government shutdown 1,600 Internet cafes, according to China Radio International, and levied fines of more than $12 million for violations like providing minors access to violent games and adult content. After an inspection of 1.8 million cafes by the Ministry of Culture, 18,000 were ordered to halt operations until they cleared up offending practices. Further, a March 2004 ruling by the Chinese Ministry of Culture ordered local governments to disapprove any Internet cafe operations within residential areas or within 200 meters of primary schools and high schools.


Called "bo ke" in Chinese, blogs are hugely popular, especially among the young. In May 2006, Reuters reported that there would be over 60 million Chinese bloggers by the end of the year as internet usage in China rises. A Qinghua university report forecasted the number of to hit 100 million by 2007, while the Internet Society of China determined that nine percent of bloggers write every day, 29 percent write once to three times a week, while 35 percent write four to six times a week.

Even if China does not regulate its own bloggers, it can ask large foreign corporations to do so on its behalf. For example, in January 2006 Microsoft removed the blog of an outspoken Chinese journalist (Zhao Jing, aka Michael Anti) from its MSN Spaces site, citing its policy of adhering to local laws. In June 2005, Microsoft also acknowledged censoring words such as "freedom" and "democracy" from its Chinese MSN portal through an automatic filter.

Meanwhile Yahoo! in September 2005 provided information to Chinese authorities that led to the imprisonment of Chinese journalist Shi Tao, a writer for the Dangdai Shang Bao (Contemporary Business News). Tao was sentenced in April 206 to ten years in prison, according to Reporters Without Borders, for sending to foreign Web sites a "top secret" government message that had been sent to his newspaper. The state secret was a message to Shi's newspaper warning journalists of the dangers associated with dissidents returning to mark the 15th anniversary of the Tiananmen Square massacre, according to the group. Shi admitted sending the e-mail but disputed whether it was a secret document. Tao was arrested after Yahoo provided Chinese investigators with detailed information that helped them link Shi's personal e-mail account and a specific message containing the "state secret" to the IP address of his computer.

New rules by a Chinese government-backed Internet group require bloggers, to register with their real names and identification cards. The guidelines, called a “draft code of conduct,” were published in May 2007 by the Internet Society of China, a group made up of China's major Internet companies. These guidelines contradict Chinese state media reports claiming that China was considering loosening registration requirements for bloggers to allow anonymous online journaling. Observers note that as far back as 2005, Chinese website owners were required to register their identities, which left bloggers no way to post material online anonymously within China.

The new Internet Society of China guidelines require Internet services to register clients' identities and urges providers to encourage bloggers to use their real names when blogging as well. While Chinese bloggers can use overseas services, but access to those from within China is frequently blocked by the government.

The stated purpose of the code of conduct is "limiting and preventing unhealthy and illegal content on the Web," and stopping the use of blogs that "disseminate objectionable content, seriously disrupting social order and the public interest and polluting the online network environment."

The New Red Guard

BusinessWeek reports that the agencies that watch over the Internet in China employ more than 30,000 people to prowl Web sites, blogs, and chat rooms on the lookout for offensive content as well as scammers. Meanwhile nearly all Internet companies in China are given a confidential list of hundreds of terms to be identified and banned. This list changes over time, based on events such as the recent police shootings in the southern town of Dongzho.

Chinese Companies Toe the Line

Domestic Chinese search engines, such as Baidu, Sohu, and, implement their own filtering to exclude search results from websites that provide information the government considers “sensitive.” , for example, gives the following message to clients who want to enter chatrooms:

“Please take note that the following issues are prohibited according to Chinese law: 1. Criticism of the PRC Constitution 2. Revealing State secrets, and discussion about overthrowing the Communist government 3. Topics that damage the reputation of the State 4. Discussions that ignite ethnic animosity, discrimination or regional separatism 5. Discussion that undermines the state's religious policy, as well as promotes evil cults and superstition 6. Spreading rumors, perpetrating and disseminating false news that promotes disorder and social instability 7. Dissemination of obscenity, sex, gambling, violence, and terror. Cyber-sex is not permitted within the English chat-room. 8. Humiliating or slandering innocent people 9. Any discussion and promotion of content which PRC laws prohibit If you are a Chinese national and willingly choose to break these laws, is legally obliged to report you to the Public Security Bureau. Thank you for your cooperation.”

Restricted Searches

In January 2006, Google announced that it would comply with Beijing's demand that Internet users in China be restricted in their access to information, particularly queries about democracy, via Google’s mainland China portal. Google also decided to forego offering e-mail and blog-creation features in its China portal. Rather than leave China entirely, Google argued that it would be more damaging to pull out of China altogether than to censor itself. According to the New York Times, if you search for "Tibet" or "Falun Gong" most anywhere in the world on, you will find thousands of blog entries, news items and chat rooms on Chinese repression. If you run the same search inside China on, most, if not all, of these links will be gone. Google will have erased them completely.

The Great (Fire)Wall

There are three main fiber-optic pipelines that connect China to the rest of the Internet outside its borders. The Chinese government requires the private-sector companies that run these fiber-optic networks to specially configure "router" switches at the edge of the network, where signals cross into foreign countries. These routers serve China's censors. If the request is for a site on the government's blacklist, the query will not get through. If the site is not entirely blocked wholesale, then the routers will examine words in the requested page for blacklisted terms. Thus, a query for “Falun Gong” or “June 4, 1989” (the day of the Tiananmen Square massacre), the router will block the signal and send an error message back to your browser.

Currently, all of is blocked in China. Wikipedia's overseers will not agree to a sanitized Chinese version with the “illegal” entries removed, even if that would leave 99.9 percent of Wikipedia intact and freely available in China. The number of people using the Chinese Wikipedia site has dropped, but devoted users are finding ways to access it. As of 2006, the Chinese language Wikipedia community boasted 45,000 registered users, most from the mainland. Ironically, one the site's now largely inaccessible 56,000 entries explains how bypass the government's firewall.

Business Impact

China’s efforts to control the Internet affect both hardware and software vendors. Cisco Systems, for example, supplies routers to the Chinese government, which uses them to censor webpage queries. Companies selling encryption technology in China, or shipping products that contain such technology, must provide details about their technology to the Chinese government as well.

According to Amnesty International, many hardware companies have apparent links to repression of freedom of expression in China, including Sun Microsystems, Cisco Systems, Nortel Networks and Motorola. However destination websites have an even greater impact. In defending their actions in China, Yahoo!, Microsoft and Google maintain they are under an obligation to comply with local law.

As more websites add podcasts and user-generated video, China will need even more sophisticated monitoring tools. Any company that produces these will find a ready market among Chinese regulators and the government.

Wikinvest © 2006, 2007, 2008, 2009, 2010, 2011, 2012. Use of this site is subject to express Terms of Service, Privacy Policy, and Disclaimer. By continuing past this page, you agree to abide by these terms. Any information provided by Wikinvest, including but not limited to company data, competitors, business analysis, market share, sales revenues and other operating metrics, earnings call analysis, conference call transcripts, industry information, or price targets should not be construed as research, trading tips or recommendations, or investment advice and is provided with no warrants as to its accuracy. Stock market data, including US and International equity symbols, stock quotes, share prices, earnings ratios, and other fundamental data is provided by data partners. Stock market quotes delayed at least 15 minutes for NASDAQ, 20 mins for NYSE and AMEX. Market data by Xignite. See data providers for more details. Company names, products, services and branding cited herein may be trademarks or registered trademarks of their respective owners. The use of trademarks or service marks of another is not a representation that the other is affiliated with, sponsors, is sponsored by, endorses, or is endorsed by Wikinvest.
Powered by MediaWiki