China Monthly TMT Update – October 2018


Cyberspace Administration of China soliciting comments on draft blockchain regulation

The Cyberspace Administration of China published the Administrative Provisions for Blockchain Information Services (Draft for comment) ("Draft Provisions") on 19 October 2018. The Draft Provisions are open for public comment before 2 November 2018.

Under the Draft Provisions, blockchain information services (“Services”) refer to information services based on blockchain technology or systems, and provided to the public through Internet, apps or other forms. Blockchain information services providers (“Providers”) refer to the entities or nodes that provide Services for the public as well as the organisations or institutions that provide technology support for such entities. The Draft Provisions apply to any Services and Providers within the territory of the People’s Republic of China (“PRC”).

A Provider must file recordal with the Cyberspace Administration of China within 10 working days of engaging in the Services. The matters to be filed include the identity of the Provider, the service types and formations, the application areas, and the location of the servers. In addition, a Provider must comply with a series of obligations as prescribed in the PRC Cybersecurity Law, for example: carrying out real-name authentication verifications, implementing necessary technical and organisational measures to protect cybersecurity, formulating emergency response plans, and monitoring for illegal activities occurring on the platform.

Please click here to read the full text (Chinese only) of the Draft Provisions.

State Council publishes the master plan of the Hainan Free Trade Zone and removes certain foreign investment restrictions in the TMT sector

The State Council of the PRC published the Master Plan for the China (Hainan) Pilot Free Trade Zone (“Plan”) on 16 October 2018. The Plan prescribes the following advantageous measures towards foreign investors in the TMT sector, which are in addition to the Special Administrative Measures for Access of Foreign Investment (known as the Negative List):

  • cancelling the foreign investment ratio restriction on the operation of the Domestic Multi-party Communication Services, the Internet Access Services (provided to ordinary users that do not engage in any operational services), and the Store and Forward Services;
  • permitting foreign investment in the operation of the Domestic Internet Protocol Virtual Private Network Services (with a foreign share ratio not exceeding 50%);
  • cancelling the foreign share ratio limitation on the manufacturing of new energy vehicles; and
  • permitting foreign investment in art preforming organisations (with Chinese parties holding the majority of shares).

Please click here to read the full text of the plan (Chinese only).

NRTA soliciting comments on overseas personnel's participation in the production of radio and television programs

The National Radio and Television Administration ("NRTA") published the Administrative Provisions on the Overseas Personnel's Participation in the Production of Radio and Television Programs (Draft for Comment) ("Draft") on 20 September 2018. The Draft was open for public comment before 20 October 2018.

The provisions of the Draft apply to the act of engaging personnel from foreign countries, the Hong Kong Special Administrative Region ("Hong Kong"), the Macao Special Administrative Region ("Macao") and Taiwan ("Overseas Personnel") to participate in the production of domestic radio and television programs.

According to the Draft, a production institution that engages Overseas Personnel should file their basic information, the name of the programs and the role of the Overseas Personnel to the authority if they serve as the scriptwriter, contributor, director, main actors, and main staff. In general, Overseas Personnel should not be engaged as the host of a program, except in certain international programs or channels.

The number of Overseas Personnel (except for those from Hong Kong, Macao or Taiwan) who act as the main producers (including scriptwriter, contributor, director and main actors) in a program shall not exceed 20% of the total personnel of the same category. The position of scriptwriter and director shall not be concurrently held by Overseas Personnel. The hero and the heroine in a play shall not be concurrently held by Overseas Personnel either.

In addition to traditional TV-based programs, the production and broadcasting of internet-based audio-visual programs shall also be regulated in accordance with the principles provided in the Draft.

Please click here for the full text (Chinese only) of the Draft.

NRTA soliciting comments on the introduction of Overseas Visual-audio Programs

NRTA published the Administrative Provisions on the Introduction and Dissemination of Overseas Visual-audio Programs (Revised Draft for Comment) ("Draft") on 20 September 2018. The Draft was open for public comment before 19 October 2018.

The provisions of the Draft apply to the introduction of overseas audio-visual programs, which include films, TV series, animations, documentaries, as well as programs of education, science, culture and sports. The introduction of certain overseas visual-audio programs will not be approved by the competent authority if they contain illegal or inappropriate content. No entity or individual is allowed to introduce overseas news programs either.

The Draft also prescribes certain limitation on the broadcast time and period of the introduced overseas visual-audio programs. Overseas movies, TV dramas, cartoons, documentaries and other overseas TV programs broadcasted by various channels of radio and television broadcasters shall not exceed 30 per cent of the total broadcast time of the programs of that category on that day. Radio and television broadcasters may not broadcast overseas audio-visual programs from 19:00 to 22:00 (the prime time) without the approval of the State Council's radio and television authorities.

Please click here to read the full text of the Draft (in Chinese only).

­­The Ministry of Public Security publishes provisions on Internet security inspection

The Ministry of Public Security of the PRC published the Provisions on the Supervision and Inspection of Internet Security by Public Security Organs (“Provisions”) on 15 September 2018, which will take effect on 1 November 2018.

The Provisions grant the Public Security authorities great power in regulating cyberspace. Public Security authorities can launch on-site inspections, interview the responsible staff and check relevant documents or materials at the offices of online service providers that provide Internet access services, Internet data centre services, content distribution services, domain name services, Internet information services, and other types of online services. The focus of the inspections and interviews will cover whether the service providers have implemented the identification authentication verifications and kept the operation logs as required, whether they have formulated effective technical and organisational measures to protect cybersecurity and cope with cyber incidents, and whether they have other compliance requirements provided in a series of telecom and cybersecurity regulations. The Provisions also grant the Public Security authorities the power to carry out remote inspection to detect potential security flaws.

The general approach adopted in the Provisions

Please click here to read the full text of the Provisions (in Chinese only).