Foreign companies must already allow Chinese investors to own
50% of all ventures in the country, and the Government has begun to
make announcements hinting that it will further restrict trade.
A state-owned newspaper reported that a clampdown on
foreign-owned internet companies was imminent and that some foreign
companies could be stripped of existing operating licences.
Regulators told the paper that unauthorised foreign investors are
using shared or borrowed licences to operate, against the rules,
according to the Associated Press newswire.
The Ministry of Information Industry has also posted a notice on
its own website instructing companies to fall in line with the laws
regarding their Chinese operations, though it does not specify
which companies it believes are breaking the law.
The World Trade Organisation insisted that China open up its
market to international companies. China capped foreign involvement
at 50% as a concession.
China is the second largest internet market with 123 million
people online, and US technology leaders are extremely keen to tap
into a growing commercialism and openness to capitalism in the
one-party Communist state.
Some of the internet's biggest names have come in for sharp
criticism regarding the concessions they have made in order to be
allowed to access the Chinese market. Yahoo! has been accused of
aiding in the arrest of a dissident journalist by passing on
information about his identity, and Google censors some content on
its Chinese site.
The European Parliament has called on the European Commission to
establish a code of conduct for internet firms in which they would
pledge not to aid censorship. Amnesty International has condemned
Yahoo!, Google and Microsoft for their censorship.
"Google respects the fact that people and organisations,
including Amnesty, oppose our decision to launch a search service
in China," a spokeswoman previously told OUT-LAW.COM. "Google
believes that Google.cn will provide significant benefits to
Chinese internet users and that our engagement in China
meaningfully expands access to information there."
The Chinese Government's moves may affect Chinese companies such
as search engine Baidu.com. They have set up foreign arms to
attract investment, and Baidu has even floated on New York's
tech-heavy NASDAQ exchange. It was not clear whether those
arrangements would be affected by the coming crackdown.
