This article was updated with additional analysis of what the new rules may mean, and information about foreign investment in China.
In the latest sign that China’s long-touted “opening up” is reversing into a “closing down,” a Chinese ministry has issued new rules that ban any foreign-invested company from publishing anything online in China, effective next month.
The Ministry of Industry and Information Technology’s new rules (link in Chinese) could, if they were enforced as written, essentially shut down China as a market for foreign news outlets, publishers, gaming companies, information providers, and entertainment companies starting on March 10. Issued in conjunction with the State Administration of Press, Publication, Radio, Film and Television (SARFT), they set strict new guidelines for what can be published online, and how that publisher should conduct business in China.
“Sino-foreign joint ventures, Sino-foreign cooperative ventures, and foreign business units shall not engage in online publishing services,” the rules state. Any publisher of online content, including “texts, pictures, maps, games, animations, audios, and videos,” will also be required to store their “necessary technical equipment, related servers, and storage devices” in China, the directive says. Any “online publication service units” needs to get prior approval from SARFT if they want to cooperate on a project with any foreign company, joint venture, or individual.
Foreign media companies including Thomson Reuters, Dow Jones, Bloomberg, the Financial Times, and the New York Times have invested millions of dollars—maybe even hundreds of millions collectively—in building up China-based news organizations in recent years, and publishing news reports in Chinese, for a Chinese audience. Many of these media outlets are currently blocked in China, so top executives have also been involved in months of behind-the-scenes negotiations to try to get the blocks lifted.
Gaming companies including Sony PlayStation and Microsoft Xbox have been making inroads in China with varying degrees of success, while social media giants like Facebook are clamoring to get in—all drawn by the country’s massive online population, estimated at nearly 700 million people.
But the new rules specify that, aside from approved projects, only 100% Chinese companies will produce any content that goes online, and then only after approval from Chinese authorities and the acquisition of an online publishing license. The Chinese language version of China’s 2015 foreign investment handbook also prohibited foreign investment in “network publishing services,” but the English-language version did not (pdf, pg. 39), and that ban was little-noticed by foreign companies looking to enter China.
Companies will then be expected to self-censor, and not publish any information at all that falls into several broad categories, including:
- harming national unity, sovereignty, and territorial integrity
- disclosing state secrets, endangering national security, or harming national honor and interests
- inciting ethnic hatred or ethnic discrimination, undermining national unity, or going against ethnic customs and habits
- spreading rumors, disturbing social order, or undermining social stability
- insulting or slandering others, infringing upon the legitimate rights of others
- endangering social morality or national cultural tradition
Quartz contacted the Ministry of Industry and Information Technology from Hong Kong asking for further clarification on how the rules would work, but the ministry said it could only reply to faxed questions that came from a reporter with a mainland press card.
While the new rules sound draconian, how effective they may be at shutting foreign companies out of China’s internet entirely remains questionable, You Yunting, an IP lawyer and partner at Shanghai’s Debund Law Offices, told Quartz. The State Internet Information Office, under “internet czar” Lu Wei, is actually in charge of internet policy in China, he points out, but these rules were put out by the technology ministry and SARFT. “Websites don’t even belong to their management,” he said. Lu has been reaching out to foreign internet giants, including a high-powered meeting in Seattle last September.
Scott Livingston, a Hong Kong-based lawyer specializing in Chinese technology law, disagrees. ”SARFT has many duties, but with respect to the internet its main task is to regulate online audio and video content, which includes administering the ‘License for Publication of Audio-Visual Programs Through Information Networks,'” (link in Chinese) he said. MIIT, the regulation’s other drafter, “is the nation’s principal internet regulator and the primary body responsible for licensing and registering Chinese websites.”
Even so, they will be tough to enforce, Ying Chan, the director of the journalism program at the University of Hong Kong, told Quartz. “Using rules of the print age to govern the internet does not work,” she said. “How do you license media in an age when everyone could become a writer and publisher? With these set of regulations, the government is fighting both market forces and technology.”
Nonetheless, the rules are yet another indicator that under president Xi Jinping, Beijing is moving to consolidate control, reduce foreign influence, and wipe out any dissent in China.
Correction: An earlier version of this story listed the Associated Press as one of the news outlets that publishes in Chinese for a Chinese audience. An AP spokesperson clarified that it does not, but only provides its content to third-party outlets, including Chinese ones.