A new Internet site 100 per cent financed by a United States company has received a licence from the Ministry of Information Industry (MII) and started operations despite an apparent ban on such investments.
'We expect the number of Internet users to reach 10 million by the end of this year, up from four million at the end of June, and 17 million next year,' said Gong Yu, head of its mainland operations.
EnReach, a high-technology company based in Silicon Valley, is investing US$10 million in the operation and is the sole investor.
'All our operations are in China. We have been fully supported by the MII and received our licence from it a month after applying,' Ms Gong said.
'The difference between us and other companies is that ours is a direct investment, whereas in others it is venture capital. It is those firms that will be restricted.' Last Monday, MII minister Wu Jichuan was quoted as saying that foreign equity participation in the mainland's Internet business, including content or service providers, was banned. This has caused alarm among foreign companies that have invested in mainland Internet ventures.