Effect of Internet Regulation on Chinese and Industry - Assignment Example

Effect of Internet Regulation on Chinese and Industry Name: Tutor: Course: Institution: Date: Table of Contents Introduction…………………………………..…………………………………….3 Background Information……………………………..…………………………….3 Effect on Chinese……………………………………………………….………….5 Effect on Industry………………………………………………………………….7 Conclusion ……………………………………………………………………….10 References……………………………………………………………….………..11 Introduction The United States and China have in the recent past expressed their differences on various issues. However, the two nations’ differences over Internet freedom have increasingly attracted global attention. In February, 2011, for example, these differences went a notch higher after the U.S. Secretary of State Hillary Clinton strongly admonished the Chinese government over internet censorship. In his response, Ma Zhaoxu, the Foreign Ministry spokesman for China, proclaimed his disregard for Clinton’s statement stating that it was an attempt by Washington to meddle in the internal affairs of China (Jacob, 2011). The debate on Internet regulation in China has been a major issue among global policy makers and scholars alike since China adopted internet connectivity in 1994. This paper seeks to address this issue, with particular focus given to the effect of Internet regulation on Chinese and industry. Historical Background China successfully established connectivity to the internet for the first time in April 1994. This enabled approximately 23,000 Chinese to gain restricted access to the service, in addition to government officials and certain academics. The number has been growing since then. The growth has been dramatic; it is estimated to be doubling after every six months. In fact, the internet development rate in China is the fastest in the world (Jacob, 2011). China has been very aggressive in embracing the internet and adopting information and communication technologies (ICT). Analysts reveal that the main objective of this aggression has been to secure the country’s economic development. The nation has also ensured that various control strategies are adopted and implemented, a contradictory trait that has been characteristic of the relationship of China with foreign countries, as encouragement of investment and trade gives way to anti-foreign sentiments (Chan, 1994, p. 70). It is worth noting that the attitude of China toward the internet has combined these sentiments, making these regulations increasingly strident. Access to the internet is most countries in distributed by way of multiple national codes as well as private and public providers. This is not the case in China, where the country’s computer networks are territorialized into a main national intranet; all of the internet service and content providers are required to make their connections using corporations that are state controlled. This is achieved using a firewall that blocks various sites such as foreign news sites, for example the Economist, the New York Times, and the Cable News Network; and human rights sites such as Human Rights Watch and the Amnesty International. This has been implemented since back in 1995 when China started to block what it referred to as “spiritual pollution” (Li, 2005). Another way the in which the internet has been regulated is by restricting content and internet activity. There are laid out regulations that stipulate what internet providers and users can post on the internet. It is illegal to post anything on the internet that has the potential to damage the reputation of China, spread rumors and threaten ethnic unity, or support cults and feudal superstitions (Rennie, 2000). This lack of clarity with regard to what is meant by “hurting the reputation” of the country is very dangerous to the citizens of China. As would be expected, several arrests have been made and sharp sentences imposed on those accused. In addition to restrictions on the internet access and activities, China has engaged in countermeasures such as producing its own content that is ordered to be spread on internet chat rooms and Websites. The last but certainly not least way in which the country has regulated the spread of the internet is through encryption regulations. Individual Chinese can only use encryption products that are approved by the Chinese government and must also register with the State Encryption Management Commission to use them (Deibert, 2002). Together, these strategies have enabled China to successfully control Internet technology Effects on Chinese Internet regulation in China has had a significant effect on the Chinese. The country has blocked the use of social networking sites such as Twitter and has been admonished for constantly regulating and taking control over micro-blogging sites as well as social networks. At the start of 2011, Chinese authorities even resulted to blocking searches made on Egypt, Tunisia and other nations where protests took shape leading to the ousting of Hosni Mubarak in Egypt and more recently, Muammar Gadaffi in Libya. The objective was to prevent the Chinese from accessing the information and discussing the events, in fear of a domino effect. According to academic analysts, the biggest enemies of the ruling Communist Party in China are the Internet and modern ICT (Wines, 2011). Among the numerous ways through which the internet is regulated in china is through news information websites. According to the Provisions on news Information Services, a document released in 2005 by the Chinese government, News websites in china are required to register with the government and should be part of the official media system so as to serve socialism and uphold the interests of the nation and the public interest. This is a draconian regulation which certainly defies international norms. In article 19 of the International Covenant on Civil and Political Rights (ICCPR), for example, "Everyone shall have the right to freedom of expression; this right shall include freedom to seek, receive and impart information and ideas of all kinds, regardless of frontiers, either orally, in writing or in print, in the form of art, or through any other media of his choice." (Jacob, 2011, p. 28) Violation of this fundamental right is certainly going to prevent the Chinese from having an efficient contact with the outside world. To the Internet-savvy generation born in the 90s, for example, the internet is a critical means of communication which they have embraced. Through the internet, this generation is able to access information and interact with other cultures thereby learning how to solve interpersonal conflicts and become leaders. Online activities are also important in giving them more options socially, economically and financially as well as making them more mature and most importantly, enlarging their views with regard to the world (Chinadaily, 2011). Regulating the Internet, therefore, means that the Chinese authorities are hindering such generations from fully maximizing their potential. Internet regulation is also a hindrance to the improvement of education, qualification as well as employment opportunities. It is worth noting that the internet is an opportunity for people, particularly those that belong to lower social classes, develop their economic and economic status. The current trend in the internet development has been an increasingly growing importance of information and communication networks. Considering that China is currently second in economic development after the United States, and is the fastest growing economy in the world, it is time Chinese authorities reconsidered its internet regulation policies (Correia & Schwartz, 2009. The internet promotes democracy and accountability of particularly the leaders of a ruling party. In addition, the internet has a democratizing and decentralizing effect, very important factors with which it can empower social forces with. It is worth noting that in the case of China, where the media is owned and controlled by the government the nation’s adopted media structure has now become an antithetical force in opposition to the democratizing potential of the internet’s new media (Li, 2005). Effect on Industry Internet technology is critical for the success of China’s economic development. This is why China has vigorously adopted new ICTs, its authoritarian control strategies notwithstanding. Internet regulation has major effects on industrial growth. It is worth noting that majority of industries, indeed all of the industries in the country, cannot function effectively independent of the Internet. The effect of regulation policies to the entertainment industry, for example, demonstrates this. According to a report released on July 2005 by the China Internet Network Information Center (CNNIC), one of the major drivers of internet development in China is entertainment. Entertainment was listed number one in the Primary goal for accessing the Internet index. Internet games occupy a special place for Internet users in China; 23 percent of internet users use the internet to access web based games while 30.8 percent (almost one third of users) access such games through cyber cafes. Considering the dramatic growth with which people are gaining internet access in China, these numbers will certainly increase. This is good news for the entertainment industry. However, by regulating the internet, the government will not only be hindering the entertainment industry from achieving its objectives but also be putting its own successful business future at jeopardy (Weber & Jia, 2007). The failure of the joint venture operation between Lenovo, the most successful personal computer firm in China, and Time Warner, (a global leader in the internet services industry) in 2001 perfectly demonstrates how regulation can adversely affect the success of industries in China. After forming a US$ 200 million deal with Lenovo (which was known as Legend at the time), the two were destined for a successful future in the business. The venture was however never successful, because of two major reasons that analysts have considered critical for success in the Chinese territory. Firstly, Lenovo was unable to offer Time Warner the needed knowledge to help Time Warner attain a competitive edge with other internet provider in the country. The second reason was an underestimation of the regulatory risk in the country by Time Warner (Weber & Jia, 2007). Although Time Warner had invested in the political influence of Lenovo with anticipation that the firm would help loosen regulations on control of the internet, regulators in China did not comply with the company’s wishes and opted not to allow foreign companies circumvent the laid out policies on control of Internet content and related services. The delays that followed as Time Warner attempted to expand its delivery services in China resulted to Time Warner announcing that it had withdrawn from the venture at the start of 2004 (Weber & Jia, 2007). This failure reveals the economic problems of the Internet sector in China. Internet regulation has affected industrial growth in China through additional global firms as well. The partnership formed by Disney and Sohu.com in 2003 reveal that internet regulation is a big issue in the country as far as industrial growth is concerned. According to China tech news, the objective of the deal was to invest in the growing internet opportunities by “meeting the demand for trustworthy, quality entertainment with educational values…that are fun and entertaining for kids while at the same time promoting valuable information skills.” (Weber & Jia, 2007, p. 10) This would never have been met if Disney had decided to venture into the Chinese market on its own. It was the formal partnership established that enabled Disney to steer clear of directly meeting with censorship bodies in China that are responsible for controlling internet and services access. The partnership did not just benefit Disney, it is worth noting. Sohu.com benefited immensely from the deal; the internet service provider was able to gain a competitive edge over its major rivals such as Sina.com and NetEase.com. In addition, the partnership enabled Sohu.com to develop demand for various internet mobile services by offering foreign content that was critical to its success from the portfolio of Disney (Weber & Jia, 2007). According to a recent article at Chinadaily.com: The Internet can make or break a brand in China, it was revealed that more and more people are using the internet to make shopping decisions. The article was based on a report and research conducted by Roland Berger Strategy Consultants. The power of the internet is able to develop or significantly damage a brand, the report stated, quoting that consumers in China rely on the internet when making purchases in larger numbers than even their counterparts in the West. Internet regulation would therefore have undesirable effects on Chinese industries by placing them in a position of competitive disadvantage. It is worth noting that online chats are very important for buyers and sellers since there are more people found online and more channels with which to communicate in. Discussion forums and boards are very important for consumers because they influence the buying decisions consumers make. A regulation of information allowed to be passed on such forums will make the forums ineffective since the consumers and sellers involved will be limited and restricted to the kind of information they are supposed to be engaged in (Chinadaily.com, 2010). Conclusion Currently, the internet has a tremendous impact, both socially and economically, in every country, and this is bound to increase even the more in future. This report has explored various ways through which internet regulation has affected Chinese industry. Although the control and regulation of the internet has been persistent since China subscribed to Internet connection, this has never slowed down its growth and the growth of civil society. Considering the dramatically rising popularity of the internet in China and the many numbers gaining access to the service, it is interesting to note that the internet culture in China has developed in reaction to the control and regulations. This is testimony that the Chinese authorities may soon be forced to abandon or the draconian internet regulations they still hold dear and loosen their grip on the internet and become accustomed to allowing its citizens unrestricted and deregulated internet access. References Chan, J. (1994). Media internationalization in China: Processes and tensions. Journal of Communications, 44(3), 70–88. Chinadaily (2010) Retrieved May 5, 2011.http://www.chinadaily.com.cn/opinion/2010- 07/21/content_11029094.htm Chinadaily (2011) How will Internet-savvy teens affect China? Retrieved May 5, 2011. Read More