These regulations implement the Circular published by the State Council Office on 17 January 1996 authorised the China News Agency ('Xinhua') to control exclusively the dissemination of economic information inside China by Foreign News Agencies ('FNAs') and their subordinate news organizations.
The activities of foreign news services in China have always been subject to formal controls, requiring accreditation of journalists, notification of reporting activities, submission to censorship and so on.
The new regulations contain some further element of content control over the information services provided by foreign news agencies. However, the primary purpose appears to be to regulate the business operations of the foreign news agencies and to extract fees in relation to the significant revenues which their operations in China generate.
The regulations also require formal monitoring by Xinhua of FNA subscribers and the FNA's contracts with their subscribers, fee levels and other useful business data. Xinhua is a direct competitor with the FNA, having its own information services which it sells within China and overseas. By making Xinhua responsible for monitoring and collecting fees from its competitors, the State Council presumably hopes to give Xinhua further competitive advantage for its own information services.
WHAT THE REGULATIONS SAY
The principal requirements are:
1 The FNAs:
must register with Xinhua,
must notify Xinhua from time to time with details of charging rates for different types of information,
must each pay a monitoring fee to Xinhua at a rate to be determined by Xinhua.
2 Subscribers to FNA services in China:
must register with Xinhua, submitting copies of their user contracts for ratification,
must use FNA information services strictly in accordance with the contract as registered.
3 User contracts must be in accordance with China's Foreign Economic Contract Law, and other relevant laws and regulations. For example, where FNA services are received over the Internet, the Tentative Provisions on Administration of International Linkage of Computer Information (promulgated in February 1996) would apply.
4 Once approved, the hardware and technical methodology used to deliver the information service to subscribers must not change. (This requirement could be to assist in monitoring the content of FNA services; the PRC authorities have already developed sophisticated computer based methods for filtering information transmitted over the Internet, although these are apparently causing a general slow down of the Internet's operation within China.)
5 The regulations are stated to embrace news information services operated by those in Taiwan, Hong Kong and Macau as well as those based outside 'Greater China'.
6 Non-compliance with the regulations risks an order from Xinhua to cancel a user or FNA registration or to prohibit the supply of particular types of information and/or to particular users.
During 1996, there has been a flurry of regulations introduced in China to regulate electronic information services. Aside from these FNA provisions, the State Council has issued tentative provisions on the Administration of International Link-up of Computer Information Networks aimed essentially at the Internet (mentioned at (3) above). In March 1996 it also issued Tentative Provisions on the Administration of Electronic Publications (aimed at regulating CD-Rom and other similar mass media forms of electronic publication).
Clearly, the Chinese authorities are concerned - as indeed are many other governments worldwide - at the implications of these new channels of communication. That said, these new regulations should probably be viewed overall as a permissive measure, effectively acknowledging the importance of electronic information systems within China as a tool for furthering economic and business development.
FURTHER INFORMATION on the above may be obtained via Linklaters & Paines Hong Kong office or via any of the other nine Linklaters & Paines offices world-wide, located in Singapore, Tokyo, London, Brussels, Paris, Frankfurt, New York, Washington D.C. and Moscow. Contact details for the various L&P offices worldwide are available via the Linklaters & Paines corporate listing c/o Business Monitor Online - http://www.businessmonitor.co.uk
c Linklaters & Paines 1996 - Tel +852 2842 4888
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