NDRC partners with Alibaba to establish the enterprise credit system

In an effort to establish the social credit system in China, the National Development and Reform Commission (“NDRC”) signed a cooperative memorandum with Alibaba Group on 2 December 2016, regarding the parties’ further cooperation in the area of enterprise credit evaluation and reporting. 

The memorandum covers the sharing of data and black lists, collaborative research and other relevant matters. Alibaba collects a huge amount of data during its operation of its e-commerce platforms. By integrating Alibaba’s internal data with key public data (e.g. from the Administration of Industry and Commerce, courts, and customs), the NDRC and Alibaba intend to generate a series of dynamic data sources for evaluating and reporting the credit status of each enterprise. 

The government’s effort to establish the social credit system is also reflected in the newly published Guidance Catalogue for Foreign Investment Industries (Draft inviting public comments), where credit investigation and evaluation services have been removed from the “restricted categories” and become open to foreign investment. 

More detailed rules are published to regulate online game operations 

The Ministry of Culture published the Notice on Regulating Online Game Operations and Strengthening the Concurrent and Post Supervision (“Notice”) on 5 December 2016. 

The Notice further specifies the scope of online game operations. Technical tests, including the opening of user registration, opening billing systems, and providing terminal software through which users can register and access to servers, constitute online game operations. One online game operator’s supply of a user system, billing system, software downloads or an advertisement service to another online game operator constitutes cooperation of online game operations. 

The Notice differentiates “virtual currencies” and other virtual goods used in online games. Virtual currencies can be purchased and traded for legal tender, and are subject to separate regulatory requirements. Virtual goods supplied by operators on a random basis (e.g. virtual rewards for finishing game level) do not require payments by legal tender or virtual currencies. To address gambling concerns, users must be provided with alternative methods (other than participating in the random mechanisms) to obtain virtual goods with the same functions. 

The Notice also emphasises the requirements of obtaining authentic identification information from users, keeping operations logs and payment records of such users, and having mechanisms in place to protect minors. 

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

MIIT publishes a notice detailing enforcement powers against online caller IP spoofing software

The Ministry of Industry and Information Technology (“MIIT”) issued the Notice on Further Clearing Up Online Caller ID Spoofing Software (“Notice”) on 5 December 2016, to prevent cyber fraud and crimes conducted using spoof caller IDs. 

In cyberspace (e.g. websites, search engines, mobile application stores, e-commerce platforms, and social media platforms), network operators and online service providers are required to take effective measures including blocking keywords, removing spoofing software, deleting advertising information, and disabling accounts, to prevent the publishing or distribution of caller ID spoofing software. 

Network operators and online service providers are required to establish mechanisms to receive and address public reports or complaints concerning such spoofing software. They are also required to report a user’s repeated violations to the public security authorities.

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

China formulates development plans for intelligent manufacturing

To change its economic develop model, that currently relies heavily on resources and extensive scale expansion, China has been emphasising the importance of intelligent manufacturing at a national policy level. To further implement these policies, the MIIT and the Ministry of Finance published the Development Plan for Intelligent Manufacturing (2016-2020) (“Plan”) on 8 December 2016. 

The Plan identifies the major tasks to tackle within the next five years, including accelerating the growth of intelligent devices and equipment, and promotion of this within the key technologies, establishing the standard and specification system, building the infrastructure for industrial internet, supporting more pilot programs nation-wide, emphasising the utilisation of intelligent manufacturing in key sectors, and facilitating more companies to engage in intelligent manufacturing activities. In particular, the Plan encourages the international collaboration in cooperative R&Ds, foreign investment and overseas M&A transactions in the intelligent manufacturing area. 

Please click here for the full text (Chinese only) of the Plan and more details about the specific devices, equipment, and technologies effected.

MIIT issues the first patch of CDN licences 

As internet-based multi-media services such as web objects and downloadable objects, applications, live streaming media, on-demand streaming media and social networks grow, so too has the demand for content distribution network (CDN) services in China. In the new Catalogue for Telecom Service Classifications, which took effect from 1 March 2016, CND services are for the first time listed as a new category of value-added telecom services subject to licensing. Several of the main CND service operators have filed their applications. As the first patch, the MIIT issued two licences to ChinaNetCenter and Alibaba Cloud on 12 December 2016. 

As stated in a MIIT circular published in early December, the MIIT and its local branches will put more efforts in handling licensing matters and regulating the CDN service market. In particular, CDN service providers will be required to connect their operation systems with the local MIIT’s record-filling systems, and refrain from providing CDN services to any unrecorded websites or websites listed in “black lists”.