Trade Advice
The number of Chinese citizens connected to the web is a huge 668 million, and growing fast. Online retail sales grew 21 percent in 2014. Additionally, the prominence of Chinese “e-tailing”, measured as a proportion of retail sales, is higher than that of the US.
Clearly, a web presence should be part of every company’s marketing and sales strategy in China. This article will describe the process of starting a Chinese web page for your company.
Why should my company register under a Chinese domain name?
Foreign websites are often slow and difficult to access for Chinese netizens.
China’s internet infrastructure has increased over recent years, but the connections to the outside world have remained more or less the same – indeed, China has only three physical points of connection to the international network.
At the same time, censorship of foreign websites through the so-called “Great Firewall” (“GFW”) is increasing. Generally speaking a foreign website is unlikely to be blocked unless it is explicitly political or pornographic.
Nonetheless, this tightening of the GFW has the following important effects:
• Google search is blocked; so companies will need a second set of search engine optimization strategies as part of their overall china marketing strategy.
• Google’s analysis tool is blocked, slowing loading times down for foreign websites that use it.
• Google Fonts is blocked. This means that foreign sites that use Google Fonts will load both slower and less predictably.
Current political trends indicate tendencies to keep China’s internet walled off. For the immediate future, it is best to assume that websites that are hosted abroad will continue to be slower and harder to access for Chinese netizens.
A .cn registered Chinese-hosted website circumvents these problems.
Registering for a Domain Name
The China Internet Network Information Centre (CNNIC) is the official Chinese government body with the responsibility of administering China’s domain name registry. It is based in Beijing, and operates under the Ministry of Information Industry (MII).
To register, an application must be made at one of around 60 CNNIC certified registrars.
• China based registrars can be viewed here.
• Overseas registrars can be viewed here.
The company must submit the following to the registrar:
• A completed .cn registration form.
• A copy of the business license.
• A copy of the signatory’s national ID. Note that the signatory must be a Chinese citizen and have a valid PRC personal ID.
Amongst others, official legislation from the Chinese MII states that an applicant company must satisfy the following criteria:
• Be an enterprise legal person or an institution legal person established in accordance with the law.
• Registered capital of not less than RMB one million.
• Hold a business development plan and relevant technical plans.
Registration is usually on a first to file basis: some large companies purchase many variations of their company name as a URL, to avoid copycat sites. Disputes can be registered at the China International Economic and Trade Arbitration Commission (CIETAC). A brand name or registered trade mark is considered totally independent from domain name registration.
If there is no content within 180 days of registration, the domain name is considered open for others to take.
Registering for a ICP status
The Chinese government requires all the websites hosted in China to apply for an Internet Content Provider license directly at the MII. The applicants need to log on to the MII official website, submit a scan of their business license/passport, and fill in the company information form. After obtaining the approval, a unique Internet Content Provider (ICP) recording code will be assigned to the website, indicating that the website has been approved.
If the company plans to allow third parties to use their website as an online platform (for example affiliate marketing), they need to apply for an ICP license as well. In this case, the company must have a minimum registered capital of RMB 10 million.
Alternatives
If a company does not register in the Chinese mainland, they can register their Chinese language website in Hong Kong. This is a feasible alternative for some, but the website would still face slower loading speeds then its mainland-hosted peers.
If a company chooses a .hk website, then it is imperative that the website must be designed with mainland users in mind – no Google Fonts or other blocked platforms embedded in the website, no content that would incite censorship on the mainland, a simplified Chinese language option, and mainland China-oriented search engine optimization.
Website Content and Information Control
Chinese law strictly limits the information that can and cannot be put on websites in China, particularly in regard to political, religious, and social issues. Chinese internet authorities hold the owner responsible for the content of the webpage; webhosts can be fined for any content that the Chinese government might deem “subversive”. Penalties still apply even if the content is user-created.
Most companies will not find this difficult to accommodate, given the relatively apolitical nature of trading. Nevertheless, companies with websites in China should keep these issues in mind and avoid situations where they might have to choose between ethics and business.
China Briefing, Dezan Shira & Associates
Editor: Nathan Wakelin-King
About Asia Briefing Ltd.
Asia Briefing Ltd. is a subsidiary of Dezan Shira & Associates. Dezan Shira is a specialist foreign direct investment practice, providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in China, Hong Kong, India, Vietnam, Singapore and the rest of ASEAN. For further information, please email china@dezshira.com or visit www.dezshira.com.
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Mar 5, 2016