Wu crackdown threat seen as WTO posturing
Threats to impose state licensing on Internet content providers and make them reduce their foreign-owned equity are being viewed as a face-saving move for Beijing.
Minister of Information Industry Wu Jichuan was quoted as saying Internet companies with more than 50 per cent foreign ownership would be 'dealt with in an appropriate manner', and made to conform to Sino-US terms agreed in recent World Trade Organisation entry negotiations.
The terms called for 49 per cent maximum ownership of mainland Internet companies immediately after joining the trade body, rising to 50 per cent after two years.
Mr Wu's statement runs counter to assertions by US officials who said the limits would not be applied to existing Internet companies.
One foreign analyst said the announcement was not a surprise, and appeared to be an effort to save face after concerns were raised that Beijing had yielded too much during WTO talks.
'It's all silly,' the analyst said. 'This is a game of grudging.' Red-chip technology stocks appeared unaffected by the minister's statements. Computer-maker Legend Holdings, which recently launched a portal, closed yesterday at $19.50, up 4.27 per cent, while software developer Founder was unchanged at $6.25.
High-tech blue chip Pacific Century CyberWorks closed at $8.30, up 10.66 per cent.
Mr Wu also said the Internet content provider industry might fall under licensing regulations. Such companies presently need only hold business licences to operate.
Ministries would also be appointed to monitor Internet sites, he said.
'We will not allow the introduction of trash that is harmful to the people,' Mr Wu said.
However, many mainland Internet users have found alternate ways to access sites being blocked by censors.
