Govt reassures foreign companies on new Internet rules

Ministry says draft is open to feedback until end of April

China's draft Internet regulation on domain names, the addresses used to navigate the Web, will not affect foreign companies' normal business in China, the top industry regulator said on Wednesday.

"The draft rule asks websites that engage in network access within the borders of China to register their domain names in the country. Companies accessing network outside of the country will not be affected," the Ministry of Industry and Information Technology said in a statement.

The remarks came after the industry regulator published the draft regulation last week, which asked Internet service providers to block access to websites whose domain names are registered outside China.

"There is no fundamental conflict between the draft regulation and global rules on managing domain names. And it will not affect foreign companies' normal daily operations in China," the statement said.

The rule, which is open to public feedback until April 25, comes amid growing concern over national security in China. It is the government's latest effort to reduce threats toward national security and consumers by cutting access to "dangerous" websites registered overseas, analysts said.

Charlie Dai, principal analyst at Forrester Research Inc, said the statement failed to address the key issue of whether the new rule will apply to foreign websites both accessible in China and having their servers physically located there.

"Many international Internet companies have moved their computer servers to the mainland so as to offer faster surfing experience to local consumers," Dai said. "But wording in the draft rule is too broad and vague to know whether these companies will be affected."

According to Dai, websites with servers deployed outside China will not be subject to the new rule.

Currently, a string of foreign tech giants such as Microsoft Corp and Apple Inc, as well as homegrown Internet companies Baidu Inc and Alibaba Group Holding Ltd, registered their domain names in other countries.

Foreign domain names are of greater appeal to Internet companies than Chinese versions, as the former are cheaper, more stable and have global availability, Dai added.

The draft regulation comes as terrorist groups and other illegal organizations are leveraging the Internet to spread their ideas and maximize their clout.

Long Weilian, a famous tech blogger in China, said the new rule is intended to reduce threats toward consumers and enterprises, as well as boost the use of Chinese domain names.

"Technically, the re-registration of domain names itself is not hard. Companies can transfer their domain names from foreign registration service providers to domestic ones within a day," Long said.