Red light, green light: has China achieved its goals through the 2000 Internet regulations?

• Author: Liang, Clara

ABSTRACT

In the mid-1990s, when the Internet began to burgeon in China, many thought that the rule of the Chinese Communist Party (CCP) would finally come to an end. The combination of foreign capital and trans-border information exchange promised a potential influx of democratic ideas and ideals. The CCP responded with both physical and regulatory limits on the use of the Internet by the Chinese people. Some commentators characterized these limits as feeble attempts by the CCP to control a nebulous medium. Others viewed the limits as ineffective steps by the government to become a highly developed authoritarian state.

This Note posits that the CCP seeks to do neither. Instead, the CCP's goal is simple: to reap moderate economic benefits while retaining political power. By regulating how Chinese businesses and individuals use the Internet, the CCP retains political power despite the globalizing effect of the Internet. It does this by dominating the Internet economy and monitoring information exchanges to suppress political insurgency, while deriving economic gain from Internet development. Viewed in this light, economic and informational regulations are very much a success for the CCP.

1. INTRODUCTION

   Edward Tian wants to bring broadband Internet access to the People's Republic of China. (1) Tian is the CEO of China Netcom Communications (CNC), a state-owned enterprise. (2) At forty gigabytes per second and twenty thousand kilometers in length, his project will be one of the fastest and longest bandwidth networks in the world. (3)

   In a nation where phone service is a luxury, how can entrepreneurs like Edward Tian sell bandwidth? The answer is simple: the Chinese Communist Party (CCP) desperately wants to take advantage of the wealth offered by the Internet. Tian's motivation, however--"to give a voice to the Chinese people" (4)--is precisely what makes the CCP leery.

   One central authority has always governed China. Today, the Chinese Communist Party rules China. In order to garner support, the CCP has historically used the media to communicate with the people. The CCP censors media opinions that dissent from the CCP message.

   The CCP uses similar censorship tactics on the Internet. Like censorship of traditional media, the CCP uses physical means to block access to the Internet. The CCP has also instituted various regulations delineating permitted and forbidden uses of the Internet.

   Most recently, the CCP issued a cluster of regulations in 2000. These regulations can be divided into two broad categories--economic and informational. The economic regulations place requirements on companies doing business online. The informational regulations restrict the type of information companies can transmit or permit their users to transmit via the Internet.

   With a population of one billion, China represents one of the largest potential markets in the world. The regulations cost the Internet industry a considerable amount of revenue. Though the CCP embraces the Internet and its benefits, it is not willing to sacrifice control.

   Most commentators view the current regulatory scheme as either a step towards high authoritarianism or as a futile attempt to control the Internet. However, these views presuppose that the CCP uses current regulations to achieve a grand predetermined goal--either a system of government that is similar to that of a highly authoritarian state or a totalitarian stranglehold on an intangible medium. This Note refutes both predictions. Analyzing the regulations within their political and historical context reveals that not only will the regulations prove to be effective, but also that the reason they will be effective is because the CCP's regulation of the Internet is consistent with its regulation of traditional forms of media. This consistency allows the CCP to enforce Internet regulations to the extent that punishment for disobeying regulations on traditional media serves as a deterrent.

   The CCP has used physical restrictions and regulations in tandem to guarantee that publicly-owned enterprises outperform private companies, thus ensuring the CCP's political power. In terms of economic regulations, the CCP favors publicly-owned enterprises over private companies. Motivated by the promise of economic development, the CCP is eager to usher the Internet into China, but not at the expense of its own political power. In the informational category, the CCP elicits compliance with its strict restraints on informational content by using the unspoken but ever present threat of its willingness to squash political insurgency. After Tiananmen Square, there is no doubt in the mind of the Chinese citizenry that the CCP will use militaristic force and spectacular punishment to squelch political opposition.

   To illustrate how the CCP has used these two types of regulations, two representative regulations issued in 2000 will be analyzed. First, the "Interim Procedures on Registration and Filing of Online Business Operations" allows the CCP to keep track of private competitors in the telecommunications industry. Second, the "Measures for Managing Internet Information Services" places restrictions on online informational content.

2. CHINA'S ECONOMY: PAST AND PRESENT

   In the past twenty-five years, the CCP has moved China's economy toward a socialist market economy. (5) Prior to 1978, China espoused a centralized, government-driven economic structure. (6) In 1978, reeling from the effects of both the Cultural Revolution and the ten-year rule of the Gang of Four, the CCP realized that it needed to recoup its legitimacy as a leader. (7) To do this, the CCP reformed the failing economic structure and demonstrated that it could effectively trigger economic development. (8)

   The CCP's decision to maintain a one-party authoritarian state while introducing some elements of a market economy created a tension that it continues to face to this day. The strength of the Chinese government stems from its one party system and its ability to maintain "stability and order" through tight control over information deemed to be at odds with party ideology. (9) But economic development often occurs in an environment of decentralized ideas and decisions, privatization, and "openness to the outside world." (10) These conflicting goals require the CCP to balance economic openness against its political power. As a result, the CCP walks a fine line attempting to foster entry into the technological global economy without falling into political upheaval.

   After the Tiananmen Square "power struggle" in 1989, (11) the CCP formally announced that it intended to move towards a socialist market economy. (12) As a result of this announcement and the ensuing economic developments, many commentators predicted that the Chinese government, economic structure, and culture would mimic those of developed Western nations. Other commentators believed that this "expectation of convergence" does not take into account China's current leadership and the fact that it voluntarily embarked on the road towards a socialist market economy. (13) Instead, commentators contended that the CCP is consciously steering China towards becoming an economically highly developed, authoritarian state like Singapore. (14)

   In the early 1990s, the advent of the Internet in China increased the tension between economic progress and state control over information. The increase in the number of both commercial and non-commercial websites represented a huge economic growth potential that the CCP was loath to turn away. Instead, the CCP welcomed the Internet's economic benefits while heavily regulating the information transmitted by commercial and non-commercial organizations on their websites. (15)

3. HISTORY OF THE INTERNET'S DEVELOPMENT IN CHINA

   When the Internet emerged in China, it was the result of the efforts of Chinese computer professionals who did not want the nation to fall behind technologically. (16) Consequently, there were numerous distinct and, to some extent, competing initiatives to advance the Internet that did not fall under the authority of any one governmental ministry or department. (17)

   The Internet in China began in 1987 when a professor in Beijing sent out the first e-mail in China through the Chinese Academic Network (CAnet), the first computer network in China. (18) CAnet connected to the global Internet indirectly through a gateway at Karlsruhe University in Germany. (19)

   In 1993, the Institute of High Energy Physics in the Chinese Academy of Sciences (IHEP), a source of Internet development independent of CAnet, rented a specialized 64K line from AT&T's international satellite channel to connect to Stanford University. (20) In May 1994 this closed line was opened to allow full Internet operation. (21) IHEP set up the first web server and established the first home page in China. (22) By June 1995, IHEP had established accounts for more than 500 Chinese scientists and professors. (23)

   Up until 1995, most networks were used for academic or research purposes. (24) However, in May 1995, the Ministry of Posts and Communications (MPT) set up ChinaNET, the first commercial network in China, in Beijing and Shanghai. (25) Through ChinaNET, the Chinese public was able to access the Internet. (26)

   The MPT is responsible for overseeing and regulating the postal service and telecommunications, as well as telegraph and wire services. (27) The Ministry of Electronic Industries (MEI) establishes policy, conducts research, and makes telecommunications equipment. (28) The MEI also has tremendous political power--current Chinese president Jiang Zemin was formerly a Minister of MEI. (29) Both the MPT and the MEI vied for administrative clout to lead the telecommunications industry. (30)

   Almost simultaneously, the top three technical universities in China--The Chinese Academy of Sciences (CAS), Tsinghua University in Beijing, and Peking University--created the National Computer...