New laws needed as “China cannot keep up with technology”

July 2, 2012 8:00 pm

SHANGHAI – The complex legal framework that regulates e-commerce activities in China will not be updated “for another five years”, according to Lin Junqiang, Deputy Director of the Information Centre at the Industry and Commerce Ministry in Beijing, who spoke exclusively to Michiel Willems in Shanghai.

Junqiang stressed new laws are needed because “China is facing a range of challenges. The current regulations can not keep up with the rapidly evolving technology. Chinese businesses see a rise in law suits and there are more and more user complaints.” However, Junqiang pointed out “it will take time” before China will have agreed on new legislation. Although the Chinese Government is planning to “bring in a new law, as there is currently no [central] law”, Junqiang admitted any new “legislation will not be ready for another five years”.

Currently, a range of decrees, central government regulations and provincial frameworks regulate issues such as domain names, data protection, consumer rights, electronic signatures, telecommunications, online content, e-contracts, IT security, internet access and copyrights. As the Chinese market is expanding rapidly, a growing number of businesses, consumers and investors are demanding an update and simplification of the country’s complex regulatory framework.

Therefore, China has started “looking at other regulatory systems around the world, to learn and to explore”. In the last twelve months Junqiang and a delegation of government officials have visited Japan, Germany, the UK and the US to research and explore a range of existing approaches to e-commerce regulation. “We noticed a lot of differences”, said Junqiang. “The US has a much more general framework than Japan or Korea, Japan is very detailed.” China will opt for “a more detailed framework, based on the Japanese model but with a Chinese approach”, Junqiang said, adding that this is necessary because “monitoring the internet in China is very difficult”.

Junqiang pointed out that “internet service providers in China have a duty to assist the Chinese Central Government”. Domestic Chinese service providers “have to close websites if the Government asks them to, since providers alone cannot do the job as it is very difficult to monitor the whole online space.” Junqiang assured that, until the new law is ready, “the [current] regulations can continue to control the situation”.

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