In exchange for granting news licenses, China is considering taking board seats and stakes of at least 1 percent in operators of some internet portals and mobile apps, Bloomberg reported, citing people familiar with the plan. Government representatives would then be able to monitor and block content distributed by internet providers, although they would not be involved in other day-to-day business decisions, the sources said.
The Wall Street Journal first reported on discussions about possible government stakes in internet companies. Licenses would be required for providers of “current affairs news”, which means all news and commentary related to politics, economics, military, foreign affairs and other social issues, according to the draft of the regulation. A license would also be required to reprint news stories or commentary via portals or mobile applications, it said.
The government may tap some state-owned enterprises that have experience with the cultural industry to hold the shares, or it may establish a new asset management firm to control the shares, the people said. Under the pilot programme, the government representative and shareholders will not receive dividend returns or any other form of bonus and will not interfere in the companies’ business decisions outside of control over content distribution, according to the people.
News portals in China have been working in a regulatory grey area. While they are not authorized to provide original content and are not allowed to hire reporters or editors, some outlets have recently distributed investigative stories related to official corruption. The government has been consulting with online news providers for the project since late last year, the people said, as part of a broader plan to amend the country’s online information law.
The amended draft of the regulation is currently seeking public opinions on the official Website of the Cyberspace Administration of China. The draft does not mention the share exchange project. There was no immediate reply to faxes seeking comment from the Cyberspace Administration as well as the State Administration of Press, Publication, Radio, Film and Television.
