The Ministry of Information Industry (MII) yesterday reaffirmed a ban on foreign investment in the Internet. Zhang Chunjiang, a MII official, was speaking at a news conference to announce details of the Fourth International Electronic Commerce Summit at Beijing's international convention centre from April 6-8 next year. Foreign companies were stunned last month by MII Minister Wu Jichuan, who said foreign investment in the Internet, including Internet service and content providers (ISPs and ICPs), was banned. But at least three foreign-funded ventures in the Internet including the venture by Yahoo! have since been announced and MII officials said new regulations would come out this year to make the market 'more open and more standardised'. Asked to clarify the situation, Mr Zhang said Minister Wu had made the position abundantly clear. 'Our government has never agreed to allow foreign investment in . . . telecommunications services, including Internet ISPs and ICPs,' Mr Zhang said. 'The question of those foreign investors who have already entered the ISP and ICP markets will be solved through consultations in line with the relevant regulations. The consequence of those improper investments will be the responsibility of those who broke the regulations.' He said this did not mean the mainland's market was not open, with the issue being discussed as part of its negotiations to join the World Trade Organisation. He compared the situation to people standing outside the front door of an exhibition hall. Before the hosts had opened the door, people had entered the hall by other doors. 'This method is not right,' he said. 'No matter, China is determined to develop the Internet. In this endeavour we hope that local and foreign firms can work according to government regulations.' One foreign consultant said the mainland certainly would open the market, because foreign capital and expertise was essential to develop the Internet, but could not say so while the WTO talks are going on. 'It cannot use up one of its trump cards,' he said. Song Ling, a second MII official, said mainland e-commerce was still at an early stage, with more than 50 per cent of transactions involving books and computer software. Neither she nor Mr Zhang could give an estimate of the annual volume of e-commerce business. Ms Song said the government was working hard to develop the Internet infrastructure, standards, regulations and security and much remained to be done in terms of user confidentiality, payment system, paying taxes and developing specialists to oversee and operate the network. The mainland has about four million Internet users. Many use it to find out about products they can buy but make the purchase by cash or cheque because they do not trust the security of the system. INTERNET