China’s Ministry of Industry and Information Technology (MIIT) has recently issued a draft regulation - the Internet Domain Name Management Rules (Draft for Public Comment) – that has attracted intense controversy in the media over whether the draft rules would block all access to foreign-registered domain names from within China. We believe these reports are in error.
In our view, this initial misunderstanding (later corrected) was due to the use of the term “network access” found in the draft rules. That term appears to have been interpreted as meaning “accessible in China,” whereas our view is that it is only meant to refer to websites that are “hosted or registered in China.”
Article 37 reads in relevant part: "for domain names engaging in network access within the borders, but which are not managed by domestic domain name registration service bodies, Internet access service providers may not provide network access services."
Under current law, all websites that are based in China must be registered with MIIT. We believe the draft regulation would simply require that these websites register their domain names through a local domain name services provider rather than an overseas one (such as GoDaddy.com).
The alternative reading – that this regulation is meant to require all websites accessible in China to be hosted/registered in China – is unlikely, as it would represent a major policy shift; one likely to come from a higher-level body (i.e., the State Council or National People’s Congress) and not announced, as here, through a lower-level ministerial regulation.
One area that remains unclear is how this regulation will affect Chinese-language websites targeting PRC audiences. For instance, a website set-up and hosted by a foreign company overseas, unregistered with MIIT but still targeting Chinese consumers. As data localization is an increasing trend in China, it is conceivable that the draft regulations will seek to bring these websites under formal supervision by the Chinese government by requiring their registration and hosting in China - perhaps with the imposition of local partner requirements for content supervision. But for now this remains to be seen.
The draft regulation is open for public comment until April 25, 2015. Following this period, we expect the revised regulation to be officially promulgated within the next 9-12 months.