With the number of Internet users in China approaching 500 million, the Chinese Government announced on 4 May 2011 that it has set up the State Internet Information Office which will serve as the new central agency for online communications in China.

What prompted the setting up of the SIIO?

Prior to the announcement, it was the collective responsibility of China's State Council Information Office and a disparate group of at least 14 government ministries and offices that exercise regulatory control over China's Internet industry. This setup was beset by poor coordination and conflict. The creation of the centralised State Internet Information Office ("SIIO") has been lauded by the Chinese government as a key mechanism to streamline the administration of the Internet in China and to simplify the regulatory environment by bringing the Internet under one unifying regulatory body.

Another reason offered by the Chinese government for the establishment of the SIIO is to promote the 'healthy development' of the Internet by imposing improved regulation measures to deal with problems such as online gambling, fraud, online pornography, vulgar content and illegal online marketing tricks.

What does the SIIO do?

The SIIO is intended to hold the following broad responsibilities:

  • implementing policies of Internet communications and promoting the establishment of a legal system in this field
  • directing, coordinating and supervising online content management
  • handling administrative approval of businesses related to online news reporting, development of online gaming, video, audio businesses and publication industries
  • coordinating the relevant government ministries and offices in planning the development of Internet culture
  • promoting the development of major news websites
  • managing government publicity
  • investigating and punishing websites that violate laws and regulations
  • directing the relevant government ministries and offices in their management of telecom service providers, Internet access providers and domain name and IP address registration work, etc
  • guiding the work of Internet information offices at the local levels

Who are behind the SIIO?

The State Council has not set up a new team for the purposes of operating the SIIO but will instead utilise existing officials already involved in Internet regulation from the State Council Information Office.

The State Council Information Office's current director and vice director will take the same positions at the new office, while the vice ministers of the Ministry of Industry and Information Technology ("MIIT") and Ministry of Public Security ("MPS") will join as vice directors.

How will the SIIO interact with the existing government ministries and offices?

Whilst the announcement indicates that the SIIO will 'work to strengthen coordination' amongst the existing government ministries and offices which already claim regulatory control over various parts of the Internet such as the MIIT, the MPS and the General Administration of Press and Publication, it is not yet clear if going forward the SIIO will really be the only regulatory body that will oversee the Internet in China or whether notwithstanding the creation of such new entity, the sector will continue to be regulated by the existing incumbent regulators.

Whatever the outcome, the creation of the SIIO appears to allow policy makers to coordinate and oversee the various government ministries and offices which regulate the Internet more effectively.

How will the Chinese Internet environment be affected?

Chinese Internet activities are likely to be subject to tighter control and regulation though the extent to which they will be affected is unclear at this stage.

There has been speculation that the creation of the SIIO may threaten the use of innovative corporate structure that many Chinese and foreign Internet companies have adopted to overcome China's stringent regulatory restrictions on foreign investment in this lucrative sector in China.

But perhaps the key concern over the creation of the SIIO is its impact on censorship over China and offshore-based online services. As mentioned above, the SIIO is set up with the intention of, amongst other things, preventing abuse of the use of the Internet through fraud, online pornography, vulgar content and illegal online marketing tricks, which seems to be fairly prevalent in the China Internet sector. Whether this means increasing censorship and blocking measures, for this and other reasons, remains uncertain.

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