Barriers to Foreign Investment in the Chinese Internet Industry

1675 Words Apr 26th, 2009 7 Pages
Barriers to Foreign Investment in the Chinese Internet Industry
Summary: Developing an Internet business in China is not easy, even though the country has the largest Internet user population among all countries in the Asia-Pacific region. Chinese laws make foreign investment difficult, and the country -- quite unlike the United States -- has strict legal controls on information and distribution and poor enforcement of intellectual property laws. This article explains the barriers facing high-tech companies in China.
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Introduction
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China has the largest population and one of the fastest-growing economies in the world. If only one percent of its population participates in the New Economy, China
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Because Internet portals funded by foreign investors usually publish news releases and advertisements based on the less-stringent standards abroad, these portals may tread on very sensitive areas. While the Chinese authorities have yet to tighten control over the contents of these portals, the authorities may implement more restrictive regulations should the political situation require them to do so.
Confusing Regulatory Structure
Like the laws governing the Internet industry, the regulatory structure in China is very confusing, especially to foreign investors who are concerned with predictability and stability. So far, it is unclear which ministry has the final say over Internet and e-commerce matters. While the MII is responsible for overseeing telecommunications, multimedia, satellites and the Internet, other government agencies are also involved in regulating the Internet industry.
For example: • The Ministry of Public Security has authority to prevent the dissemination and use of information and products that are considered harmful to the state and society.

• The State Secrecy Bureau has promulgated regulations concerning state secrecy protection.

• The Ministry of
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