China Internet Rule: Beijing’s Order Obsession 中国互联网新规
Everyone is giving their view on China’s new Internet rule announced late last week and what it means for both web surfers and service providers, so I too feel a need to provide my own interpretation on this latest development in the country’s wild and often unruly social media space. In a nutshell, the new rule seems designed to formally put into law many of the practices already performed by major companies and individuals, and in that sense it doesn’t represent a huge change in Beijing’s stance toward the Internet and new media in general.
By taking this kind of step, Beijing can introduce a formal system for prosecuting and punishing people who do things like post baseless slander on the Web, spread malicious rumors and engage in fraud. The new law also seems aimed at protecting people’s individual data from falling into the hands of salesmen and fraudsters, even though it could ironically force service providers to give that same data to government investigators upon demand.
From my perspective, all of this looks like a basically good development in its intent to clean up the Internet of counterproductive content, even though it also reflects Beijing’s heavy-handed approach to online regulation. But this is the kind of approach may be what’s needed right now, since Chinese social media have really become quite unruly over the last 2 years as not only netizens but also unscrupulous tricksters and businessmen take advantage of new platforms where they can often act with few or no restraints.
Perhaps the best place to start my discussion isn’t by looking at the actual law, but instead at the way the law was announced. The law itself was announced with remarkable transparency for a Chinese government that often treats its many rules and regulations involving the media and spread of information like highly guarded state secrets. A detailed announcement of the new rule was delivered in a report from the official Xinhua news agency. The law gives a gatekeeper role for maintaining order on the Internet to China’s major telcos, such as China Mobile (HKEx: 941; NYSE: CHL) and China Unicom (HKEx: 762; NYSE: CHU), as well as a wide range of websites that contain user-genreated content, such as Sina (Nasdaq: SINA) Weibo, Tencent (HKEx: 700) WeChat, Kaixin and Renren (NYSE: RENN). (English article)
Among other things, the new law requires everyone to sign up for mobile, fixed-line and broadband services using their real names. It also requires operators of SNS and other Websites to delete posts on sensitive subjects or risk punishment. In reality, China’s major telcos already require nearly all users to sign up for phone and broadband service using their real names, so nothing is really new there. Likewise, most websites already have entire teams dedicated to policing their sites for sensitive material and immediately delete anything even vaguely controversial. In this case, the new law also adds the requirement that website operators not only delete such messages, but also save records and report the incidents to relevant authorities.
While the rules seem a bit heavy-handed and perhaps could dampen some online discussion in areas like human rights, the government was also quick to add that activities like fighting corruption online would be allowed to continue. That looks like Beijing’s way of reassuring the public that items on its agenda would not be affected by the new rule. That’s an important distinction, since the incoming administration of incoming President Xi Jinping has indicated that social media can help to perform a number of important functions, including fighting corruption and correcting other social injustices.
In summary, this new rule in my view seems well-intentioned, since it really does aim to cut down on fraud, slander and malicious rumor mongering on the Internet, all of which have exploded in the last 2 years and ultimately undermine social stability without serving any positive purpose. At the same time, the blunt nature of the rule and its introduction without public debate does also reflect Beijing’s heavy-handed approach to regulating things it doesn’t fully understand. Such an approach often results in unintended consequences like stifling innovation and creation of burdensome new bureaucracy.
At the end of the day, I expect we’ll see companies selectively implement many different aspects of the new law as they try to follow its spirit rather than actually trying to execute all of its onerous and detailed provisions. As that happens, regulators in Beijing will be carefully watching to see how the situation evolves. They could also quickly step in to take action if they feel that telcos and website operators aren’t taking enough action to curb many of the more negative trends like fraud, slander and malicious rumor mongering now taking place in cyberspace.
Bottom line: Beijing’s new Internet law looks mostly designed to curb fraud, slander and malicious rumor mongering, but could also stifle innovation on the Web and add burdensome new bureaucracy.
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