Jurisdiction II: Global Networks/Local Rules
September 11-12, 2000
San Francisco, CA
A Legal Perspective: The Impact of WTO on Foreign Investment in China's Internet/E-commerce Sector
Perkins Coie LLP
Perkins Coie (Hong Kong) Limited
The November 1999 signing of the US-China Bilateral Market Access
Agreement (the "US-China Agreement") in relation to China's pending
accession to the World Trade Organization marked China's official
sanctioning of foreign investment in its Internet and e-commerce sector.
The bilateral agreement signed between China and the European Union (the
"EU-China Agreement") in May 2000 has not yet been publicly released, but
certain of its provisions are reportedly even more favorable for foreign
investors in China's Internet market. The WTO is now harmonizing the terms
of these two agreements, as well as the terms of bilateral agreements
between China and other countries, based on the principle that the most
liberal terms of the agreements should be made available to all WTO members
upon China's accession.
The provisions of the US-China Agreement and the EU-China Agreement
contrast with the ban on foreign investment in China's Internet sector
articulated in September 1999 by China's Ministry of Information Industry
("MII").1 This reiteration of the ban on
foreign investment in the Internet sector, coming in the final weeks before
China's signing of the US-China Agreement, has been interpreted as a
political move by MII to assert regulatory control over the Internet in the
face of competing claims by other government agencies, as well as a tactic
in the negotiations between China and the United States over WTO market
access. But the MII's pronouncements also reflect a more fundamental
concern within policy circles, and more broadly within Chinese society and
culture, as to the appropriate direction of foreign investment and the
acceptable degree of foreign influence in China. Tension over these issues
remains acute, notwithstanding the Chinese government's decision to
aggressively pursue WTO accession and to allow less restricted market
The roots of this tension extend deep into the history of China's
interaction with the West. The predominant view for generations has been
that in the effort to modernize, China should adopt foreign technology, and
more recently that China should attract foreign capital, while limiting both
the influence of Western cultural and political ideas and the ability of
foreign business to dominant the economy. This ambivalence between
admiration of Western technology and modernity and rejection of many aspects
of Western thought and values is still widely shared by policy makers in
China, as well as by many of the intelligentsia and the general populace.
The protection of China from undue foreign influence and foreign economic
domination is a key factor in the process by which the state legitimizes
itself in the eyes of its people. These attitudes have informed policy
formulation and legal development since China's opening to foreign
investment in the late 1970's, and to a large extent they will shape the
reforms in policy and law that China must adopt following WTO accession,
particularly with respect to market access.
In the longer term, attitudes will continue to evolve, particularly as
China becomes stronger economically, and as younger generations attuned to
the information age acquire greater economic and political power. With
respect to the nearer term implementation of WTO reforms, however, the area
that is the primary concern of foreign investors today, the attitudes
discussed above introduce a degree of uncertainty as to the significance of
the market access provisions in the US-China Agreement and the EU-China
Against this background, we examine below the current laws and practices
applicable to foreign investment in Internet and e-commerce in China and the
potential impact of WTO.
2.Existing Regulation of Foreign Investment in Internet and E-Commerce
Existing regulations governing foreign investment in China do not address
the Internet and e-commerce in any detail. At present, foreign investment
in this sector is regulated largely based on the rules prohibiting or
restricting foreign investment in telecommunications and on other rules
restricting foreign investment in various services, such as trading or
advertising, that are vital to many Internet and e-commerce businesses.
Regulation of Foreign Investment Generally
Since the late 1970's when China started its "open door" policy toward
foreign investment, the basic goals of the Chinese government have been to
encourage the import of foreign capital and technology, but to limit the
activities and influence of foreign investors. The government has sought to
keep foreigners out of areas perceived as strategic to China and to inhibit
foreign domination of the Chinese economy. Protecting the interests of
local economic players has also been a priority, especially in the earlier
years when most Chinese enterprises had little or no experience with
international business transactions. The regulatory framework for foreign
investment reflects these goals in a variety of ways, such as discretionary
government approval of all investments, unanimous board consent and
government approval for share transfers and major company actions, caps on
ownership interests of the foreign shareholder in joint ventures,
prohibition of wholly foreign-owned enterprises in certain sectors, and
restrictions on the permitted business scopes of enterprises with foreign
The key regulations concerning the allowable scope for foreign investment
are the Provisional Regulations for Guiding the Direction of Foreign
Investment2 and its companion Catalog for
Guiding Foreign Investment in Industry (the "Foreign Investment
Catalog").3 These regulations divide
industrial and commercial sectors into four categories for foreign
investment: encouraged, permitted, restricted and prohibited. The Foreign
Investment Catalog lists the sectors in which foreign investment is
encouraged, restricted or prohibited. Foreign investment is deemed to be
permitted in sectors that are not listed, except where other laws,
regulations or industrial policies provide otherwise. Notably, foreign
investment projects in the restricted category require higher-level
government approvals, and many of them are subject to limits on the foreign
An important aspect of these regulations with respect to market access is
that many types of services, for example, domestic commerce, foreign trade,
sales agency, advertising, transportation of goods, brokerage and
publishing, are listed in the "restricted B" category. This means that
central government approval is required for all foreign investment projects
involving these services, regardless of the size of the project. In
practice, the central government has rarely granted approval for such
Regulation of Foreign Investment in Internet and E-commerce
The Chinese government's general policies toward the Internet and
e-commerce are a blend of encouragement and control. E-commerce is viewed
as means for China to remain competitive in foreign trade and to improve
efficiency in the domestic economy. Government and business leaders
appreciate the historical significance of the information revolution and do
not want China to lag behind more developed countries in this area. There
is also a belief that China has a competitive advantage in software
development and other areas of technology related to the Internet because of
its relatively advanced system of higher education. At the same time, the
government is concerned about controlling the dissemination of information
over the Internet, particularly with respect to classified information
(referred to as "state secrets"), political dissent and undesirable foreign
Government encouragement for the development of a legal framework for
Internet and e-commerce has been expressed in numerous ways, such as the
provisions on electronic contracts in the new contract law that took effect
last year,4 the establishment of a domain name
registration system,5 pilot projects in
Beijing, Shanghai and Guangzhou for online advertising,6 and recent attempts to control
cyber-squatting.7 The State Council and MII
are reportedly formulating an overall framework for the development of
e-commerce in China and other government agencies are working on e-commerce
policies and regulations in areas such as foreign trade, online advertising
Government control over use of the Internet and e-commerce is reflected
in many regulations that have been promulgated in recent years. For
example, the government has sought to control and monitor access to the
Internet,8 to prevent the divulgence of state
secrets over the Internet,9 to restrict the use
of foreign-made encryption software,10 to
control the online sale of audio-visual products,11 and to control the online distribution of
The emerging but as yet largely uncoordinated legal framework described
above applies to both foreign-invested and domestic Internet and e-commerce
businesses in China. In contrast, the legal issues related to Internet and
e-commerce that are unique to foreign investment relate primarily to market
access, i.e., to prohibitions and restrictions on the business scopes of
FIEs. The Foreign Investment Catalog is one key regulation that addresses
these issues, but for Internet and e-commerce, other regulations governing
foreign investment in telecommunications are also relevant.
The Foreign Investment Catalog prohibits foreign investment in the
operation and management of telecommunications business.13 This prohibition is more fully detailed in a
series of older regulations, which disallow any form of foreign investment
or participation in this sector.14 Based on
these regulations and on the regulations referred to above regarding
Internet access,15 it is generally accepted
that foreign investment in Internet service providers ("ISPs") is prohibited
The situation is less clear for Internet content providers ("ICPs"), a
term that has not been defined in Chinese legislation but is widely used in
official discussions about the Internet. Since all online businesses
provide some amount of information or content on their websites, the term is
sometimes used to describe all online businesses other than ISPs. MII has
interpreted the ban on foreign investment in telecommunications as applying
to all ICPs, apparently based on an expansive definition of "value-added
telecommunications services," which are included in the ban. More recently,
however, MII has acknowledged that the situation is more complex and that
foreign investment in some ICPs may be regulated under laws and regulations
other than those governing telecommunications.16 It is possible that a distinction will emerge
between ICPs whose core activity is to attract website traffic by
disseminating general information or by providing e-mail, EDI or other types
of communications services, and those whose core business is to distribute
goods or to provide other types of application services over the Internet.
However, whether such a distinction makes sense given the nature of the
Internet or whether the regulators would embrace it remain open
Foreign investment in ICPs that escape the telecommunications ban may
still be subject to other restrictions under the Foreign Investment Catalog.
Many services that are key to website-based businesses, such as commission
sales, advertising, trade in goods, brokerage, publishing and distribution,
are in the "restricted B" category, which means that all foreign investment
must be approved by the central government. Since such approvals have not
been forthcoming, many foreign investors in the Internet and e-commerce
sector have had to choose between staying out of the market and adopting
creative but sometimes irrational business structures that exploit gray
areas in the regulations. In some instances, this is possible because it is
not clear how foreign investment legislation adopted long before the
Internet became significant in China applies to online businesses.
3.Effect of Existing Regulation on Internet/E-commerce Business Models
To illustrate how existing regulations affect foreign investment in
Internet and e-commerce, we examine below several typical business models
that we have encountered in this sector in China. We should emphasize,
however, that these are simplified models for illustrative purposes only.
Most actual businesses are more complex and often involve more than one of
these simple models.
Internet software developer
One type of Internet-related business involves the development and sale
(or licensing) of enabling software for e-commerce and other Internet
applications. Under current regulations, foreign software companies can
normally obtain approval to establish a wholly foreign-owned enterprise
("WFOE") or a Sino-foreign joint venture to develop and produce software and
to sell and or license that software. In most cases, the WFOE or joint
venture localizes the foreign company's software for use in the Chinese
market, and provides software engineering services, such as customization,
related to its own products. Software development has long been considered
to be "production-oriented" and therefore has been treated for foreign
investments purposes similarly to the manufacture of goods.
Manufacturing FIE with online sales
An FIE that manufactures products in China may decide to channel sales
through its own website. Under existing law, FIEs that manufacture products
are permitted to sell the products that they manufacture (but not any other
products) in China or abroad. Therefore, adopting an online sales channel
should be within the FIE's existing scope of business, so long as it
promotes and sells only its own products. However, the FIE would be
considered to exceed its authorized business scope if, for example, it
advertised the products of other companies on its website or created links
to other websites involving the payment of sales commissions to the FIE.
Both activities would run afoul of restrictions in the Foreign Investment
Catalog, and it is unlikely that the FIE would be able to obtain central
government approval to amend its business scope.
B2C "catalog" sales
The main problem for a foreign company that wants to set up an FIE to
operate online "catalog" sales is that foreign investment in foreign or
domestic trading, whether retail or wholesale, is restricted under the
Foreign Investment Catalog and requires central government approval.
Central government approvals have been few, primarily limited to a small
number of brick and mortar department stores in several major cities.
A B2C portal provides a wide selection of information aimed at attracting
Chinese consumers to the site. The portal operator generates advertising
revenue by designing advertisements for the products and services of other
companies and publishing them on its website. The site also contains links
to other websites, from which the portal operator earns commissions on the
sale of goods or services. The portal operator may organize offline sales
activities from which it earns commissions, as well as sell consumer
information from its database.
Since information is provided on the website, the portal operator may be
categorized as an ICP. As discussed above, it is presently unclear whether
an ICP of this kind would fall within the ban on foreign investment in
telecommunications, so at best this aspect of the business falls within a
legal gray area.
Sales agency is a restricted sector under the Foreign Investment Catalog,
and central government approval would not be forthcoming at this time.
Consequently, for an FIE to receive commissions from the sales of another
company's products made via a link from its website would likely be outside
of its authorized scope of business.
Under China's advertising regulations, a distinction is made between
companies that want to advertise, agents that design, create and place
advertisements, and publishers of advertisements. Advertising agency and
publishing are within the restricted category of the Foreign Investment
Catalog requiring central government approval. Even if it were possible to
obtain central government approval, a foreign-invested publisher must be in
the form of a joint venture in which the foreign investor holds a minority
stake. A recent notice issued in Beijing requires website enterprises there
to obtain an advertising agency license or permission to publish
advertisements before undertaking these activities online, a requirement
that would be difficult for most FIEs to meet.
B2B trading portal
A B2B trading portal helps North American buyers find suppliers in China.
The portal operator provides product information on its website, receives
commissions from purchases by the foreign buyers, and generates revenue from
publishing advertisements. It may also hold online auctions, from which it
receives commissions. The B2B portal faces essentially the same
restrictions on foreign investment as the B2C portal above, although it may
have a lesser risk of being treated as an ICP in which foreign investment is
banned if the information provided on the website pertains mainly to its own
From the above discussion, one might assume that foreign investors would
be deterred from investing in Internet and e-commerce in China. In fact,
foreign investment has poured into the sector over the past year.
Investors, usually with the cooperation of Chinese partners or local
government authorities, have adopted a number of strategies to circumvent
the restrictions on foreign investment. Some common ones include:
- Avoiding the establishment of an FIE by entering into a contractual
relationship with a local company, under which the local company handles the
operation of the business and collects revenues, if any, from inside China.
It then pays the foreign company under the rubric of a cross-border
consultancy, technical services or similar contract. However, this
structure may lead to foreign exchange control problems.
- Establishing a software development FIE, as described above. In
addition to other software-related services, it is often possible to include
website-related design, systems integration and other technical services in
the scope of business. In reality, the FIE may operate an online business
directly, or it may establish a contractual relationship with a local
company as in the previous example. In both cases, the FIE's revenue is
likely to be dressed up as technical services fees or licensing fees,
although the FIE does no true software development.
- Convincing a local government to approve a scope of business worded in
such a way as to encompass all or some of the restricted activities, without
actually using the language of the Foreign Investment Catalog or other
regulations to describe those activities. This creates the appearance that
the project did not require central government approval.
- Variations on the Chinese-Chinese-Foreign ("CCF") investment structure
that the State Council declared illegal at the end of 1998 continue to be
adopted, particularly for ISPs and other businesses that are within the
That these strategies can work has much to do with flexible
interpretations of the regulations by local governments (usually driven by a
desire to increase foreign investment levels in their localities), lack of
knowledge about Internet and e-commerce on the part of local officials, and
the difficulty of policing the hundreds of Internet-related businesses that
have sprung up in a short time.
But these strategies share at least two common problems. First, the
business may run into problems raising funds in the venture capital or
public markets, or in selling the business privately, because the foreign
company does not own the business or because the legality of the structure
is questionable. Second, the risk of a central government crackdown cannot
be dismissed, as demonstrated by the well-publicized rectification last year
of China Unicom's foreign investment projects using the CCF structure, or by
the crackdown on foreign investment in the retail industry in 1997-98.
Nonetheless, most investors seem to believe that with WTO accession pending,
the risk of a crackdown in the Internet and e-commerce sector is low.
4.Potential Impact of WTO
The Foreign Investment Catalog and the US-China Agreement are compared in
Table 1 for selected areas related to Internet and e-commerce. Based on the
US-China Agreement, foreign investment in certain value-added
telecommunications services will be permitted, subject to limits on foreign
ownership that will increase to 49% one year after accession and 50% two
years after accession. In advertising, retail, commission sales and
wholesaling, geographical, quantitative and foreign ownership restrictions
will be eliminated in stages.
Table 1. Comparison of selected e-commerce and Internet-related service
sectors under the 1998 Foreign Investment Catalog and the US-China
||Foreign Investment Catalog
||Foreign investment in operation and management
prohibited. This includes all ISPs and ICPs that are considered to be
engaged in value-added telecom services (but not well-defined).
||Value added services (including e-mail,
voice-mail, on-line information and database retrieval, electronic data
interchange, enhanced fax services, code and protocol conversion, and
on-line information and/or data processing): on accession, Sino-foreign
joint ventures permitted in Beijing, Shanghai and Guangzhou, foreign party
stake limited to 30%.
No later than January 1, 2001,* joint ventures permitted in 14 more
cities, foreign party stake limited to 49%.
No later than January 1, 2002,* no geographical restriction, foreign
party stake limited to 50%.
||Foreign investment restricted under Category B
- central government approval required but only sometimes granted. No WFOEs
||Foreign minority-owned joint ventures permitted
No later than January 1, 2002,* foreign majority ownership in joint
ventures will be permitted
No later than January 1, 2004,* WFOEs will be permitted.
|Distribution trade services
||Restricted category B - central government
approval required but very rarely granted. No WFOEs permitted for trading
||Retailing: on accession, joint ventures allowed
subject to geographical, quantitative and product restrictions.
No later than January 1, 2002,* foreign majority control will be
permitted in joint ventures for certain products.
Gradual opening up of products that can be sold by joint venture
No later than January 1, 2003,* no geographic, quantitative or equity
restrictions for certain products.
No later than January 1, 2005,* no further restrictions and WFOEs will
be permitted for all products, except in department stores and certain chain
Commission agent services and wholesaling: no later than January 1,
2001,* joint ventures permitted to engage in wholesale business of many
imported and domestic products.
Gradual opening of wholesale distribution of products such as books and
No later than January 1, 2002,* foreign majority ownership will be
permitted in joint ventures
No restrictions after January 1, 2005.*
After-sales services: upon accession, both foreign companies and FIEs
will be permitted to provide after sales and other subordinate services for
the products they distribute.
|*These dates were based on January 1, 2000, the
date by which China expected to accede to WTO when it signed the US-China
Agreement. China has the right to adjust these dates to reflect the date of
its later accession and presumably will do so.
We consider the impact of WTO, based on the provisions of the US-China
Agreement, on the various business models discussed above in Section 3:
Internet software developer
For FIEs that actually engage in software development and sales, the
impact of WTO will be less significant than in other sectors. However, it
is not known if investors will continue to be able to use software
development as a mask for other activities, such as technical services or
online businesses. For example, the US-China Agreement provides that
foreign investment in software implementation services, systems and software
consulting services and systems analysis services must be in the form of
joint ventures, rather than WFOEs. Also, foreign investment in certain
Internet-related areas that today is often hidden in software development
WFOEs or majority-owned joint ventures may be required post-WTO to be
carried out in joint ventures with limits on foreign ownership.
Manufacturing FIE with online sales
Manufacturing FIEs that sell products online may gradually be able to
expand their online activities to include advertising and distribution of
the products of other companies, including but not limited to those of the
foreign shareholder. However, this will depend on the requirements of the
specific regulations adopted for advertising and distribution post-WTO. For
example, the government may try to impose restrictions that are not
expressly addressed in the WTO agreements, such as requiring that the
foreign investor in an advertising FIE be in the advertising business itself
outside of China.
B2C "catalog" sales
Retail and wholesale distribution will open up to foreign investment in
accordance with the details set out in Table 1. For online wholesaling,
investors should note that certain products that have been popular for
e-commerce sites outside China, such as books, newspapers, magazines and
pharmaceuticals, will become unrestricted three years after accession,
whereas for most products it is only one year. Similarly, while foreign
investment in the retailing of most products may begin upon accession, the
retailing of books, newspapers and magazines will be delayed for one year
and the retailing of pharmaceuticals for three years after accession.
B2C portal and B2B trading portal
If the portal operator's services are within the value-added
telecommunications category in the US-China Agreement, the portal should be
permitted to operate as a joint venture, and the foreign party's stake may
increase from 30% upon WTO accession to 49% a year later and 50% two years
later. The joint venture could be established only in Beijing, Shanghai or
Guangzhou for one year after accession, but within two years after
accession, the joint venture could locate anywhere in China.
Value-added telecommunications services are listed in the US-China
Agreement as including e-mail, voice-mail, on-line information and database
retrieval, electronic data interchange, enhanced fax services, code and
protocol conversion, and on-line information and/or data processing.
However, it is not clear if this list is exclusive. Under the draft
regulations concerning the telecommunications industry that MII has recently
submitted to the State Council,17 value-added
telecommunications services and information and related services on the
Internet and multimedia networks are treated in a similar way.
Although the draft regulations do not stipulate an equity cap, MII, at
least, may be seeking to impose the 50% limit on foreign ownership to all
FIEs that are within the ICP category, rather than only to those engaged in
value-added telecommunications as defined in the US-China Agreement. This
could have a significant effect on foreign investment in portal sites.
Commission sales are treated under the US-China Agreement in the same
manner as wholesale distribution (see comments above on catalog sales).
The US-China Agreement provides for the lifting of restrictions on
foreign investment in advertising agency but does not specifically address
the publishing of advertisements. Pilot projects and a government study for
online advertising are currently underway. It appears that investors will
have to wait until online advertising regulations are promulgated for
clarification concerning the publishing of advertisements on
Two broad concerns emerge from the discussion above. The first is how
the large number of existing FIEs that operate in restricted Internet and
e-commerce sectors under questionable business scopes approved by local
governments will be handled after China accedes to WTO. The US-China
Agreement purports to require "grandfather" treatment for foreign invested
projects in existence at the date of China's accession. However, the
language is vaguely worded, and past experience with similar provisions in
Chinese regulations suggests that grandfather treatment will not be extended
to FIEs set up in violation of regulations in effect at the time of
establishment. From the central government's perspective, many FIEs in the
Internet and e-commerce sector should not be eligible for grandfather
treatment because they applied for an authorized business scope that did not
reflect their intended business and/or because they were approved locally
when central government approval was required.
While a general crackdown on these FIEs may be unlikely, there could be
selective termination of some, while others are required to amend the terms
of their projects to comply with the post-WTO regime. This would be similar
to the approach taken in the rectification of the retail sector a few years
ago. On the other hand, local governments may resist any attempt to rectify
the Internet and e-commerce sector, and the central government may decide
that it does not want to expend its resources in this area. In either case,
questions about the legality of existing businesses may be exacerbated as
the legal framework becomes clearer and as new players enter the market
under the new framework, perhaps leading to disruption in the financing or
sale of existing businesses.
The second concern is how the implementation of WTO reform in China will
differ from the expectations of other member countries, particularly as
reflected in the US-China Agreement and the EU-China Agreement. We have
referred above to the draft telecommunications regulations prepared by MII
in anticipation of WTO accession, and the seeming intention to apply
restrictions on value-added telecommunications services to other ICPs.
These draft regulations also suggest other ways in which restrictions could
be introduced. For example, they provide that the foreign investor in a
project involving value-added telecommunications or information and related
services on the Internet must have annual revenue of at least US$500,000 and
total assets of US$1 million in the year prior to application, as well as a
solid performance record in the industry. These requirements, if enforced,
would make it difficult for start-up enterprises with foreign investment to
be established in China. In another example, several government officials
have recently expressed the view privately that post-WTO, distribution of
goods will be permitted only for those foreign companies who have already
established manufacturing FIEs in China. Further examples of this kind will
multiply rapidly as the implementation process gets underway.
China's accession to WTO will bring many long-term benefits to foreign
investors in the Internet and e-commerce sector. At the same time, the
deeply held protectionist sentiments of government regulators, the doubtful
validity of the legal structures of many existing FIEs in the sector, and
the ambiguities that will be found in applicable market access provisions
after China's accession, all point to a difficult path for existing foreign
investors during the implementation of WTO reforms.
- Interview with Wu Jichuan, published in the Financial Times on September 14, 1999.
- Provisional Regulations for Guiding the Direction of Foreign Investment, issued by the State Planning Commission on June 27, 1995.
- Catalog for Guiding Foreign Investment in Industry (the "Foreign Investment Catalog"), revised by the State Council on December 29, 1997 and promulgated with effect from January 1, 1998 under Guo Han  No. 117.
- Contract Law of the People's Republic of China, adopted by the National People's Congress on March 15, 1999, and effective from October 1, 1999. Articles 11, 16, 26,and 33 contain specific provisions regarding electronic contracts.
- Tentative Procedures for the Administration of the Registration of Domain Names for the Chinese Internet, promulgated by the State Council on May 30, 1997; Detailed Implementing Rules for the Registration of Domain Names for the Chinese Internet, promulgated by the State Council on June 3, 1997.
- Urgent Notice of Guangdong Province Concerning Pilot Projects for Registering Network Advertising Business, issued by the Guangdong Province Administration for Industry and Commerce on February 28, 2000; see also Notice of the Beijing Municipal Administration for Industry and Commerce Concerning Standardization of Qualifications for Internet Advertising Business, issued on May 16, 2000.
- "Beijing court adopts guidelines for cases involving cyber-squatting," reported on September 6, 2000, on www.chinaonline.com; originally reported in the September 1, 2000 issue of China Consumer Journal.
- Provisional Regulations of the People's Republic of China for the Administration of International Connections to Computer Information Networks, promulgated by the State Council on February 1, 1996 and amended on May 20, 1997; Implementing Rules for the Provisional Regulations of the People's Republic of China for the Administration of International Connections to Computer Information Networks, promulgated by the State Council on February 13, 1998.
- Administrative Regulations on the Maintenance of Secrets in the International Networking of Computer Information Systems, issued by the State Secrecy Bureau on January 25, 2000, and effective from January 1, 2000.
- Regulations on the Administration of Commercial Encryption, promulgated by the State Council with effect on October 7, 1999.
- Notice on Relevant Issues Concerning Online Business in Audio-visual Products, issued by the Ministry of Culture in April 2000.
- "Read it and weep: Beijing cracks down on online book retailers," reported on July 5, 2000, on www.chinaonline.com; originally reported in the Press and Publishing News on June 29, 2000.
- Foreign Investment Catalog, List of Industries in Which Foreign Investment is Prohibited, Section 7(1).
- See Opinion of the Ministry of Post and Telecommunications on Further Strengthening Control of the Telecommunications Services Market, issued on June 30, 1993 and approved by the State Council on August 3, 1993; Provisional Measures for Administration of the Examination and Approval of Engagement in Previously Restricted Telecommunications Business, issued by the Ministry of Post and Telecommunications on October 11, 1993 with effect from November 1, 1993.
- See note 8.
- Interview with Wu Jichuan, published by Caijing Magazine in January 2000, on www.caijing.homeway.com.
- Regulations of the People's Republic of China on the Administration of Telecommunications (draft); and Regulations on the Administration of Foreign Invested Telecommunications Enterprises (draft). Michael A. Aldrich and Jacqueline P.L. Teoh analyze these new regulations in A Preview of the Shape of Things to Come in PRC Telecoms, at www.perkinscoie.com/resources/intldocs/prc_tele.htm.