Regulating Internet Cafes in Mainland China: The Issues of Special Administrative Measures

Abstract

One of the defining characteristics of an authoritarian state is that behaviors of commercial service providers and consumers can be rectified or even controlled by governmental regulations on purpose. It is reasonable in some ways because market may be ineffective, and motivations for profit may give rise to social problems. The situation of Chinese Internet Café, or net bar as is commonly called in Chinese, is a case in focus. According to the 23rd Statistical Survey Report of CNNIC, by December 31, 2008, the size of netizens in China had reached 298 million, and Internet penetration had reached 22.6%, surpassing the average level in the world. Second to Home, Internet cafes are primary places for Internet surfing. 42.2% of internet users have been to internet cafes. Since 1995, Chinese Internet cafes have experienced three periods both in its development and government regulation: the first and initial free growth period with few regulations (1995-1998); the second and regulative period of general administration permit (1998-2003); and the third and strict period characterized by a chain-store model with special administration permit (2003-now). Governmental regulation may also be ineffective if it cannot achieve its goal, such as keeping market order or resolving related social problems. In Chinaat the very beginning of the first period, high profit potential promoted the opening of many internet cafes. But later on, problems such as disordered competition, lack of fire protection- which had resulted a big fire in a famous internet café in Beijing, and especially social complains about teenagers escaping classes for indulgence in games in net bars, impelled the government continuously to interfere internet cafés running with more and more strict measures. Now the government tries to limit the total number of internet cafes and promote chain-stored models by requiring special administration permit. Since the permission threshold is so high and the application process is so complex, a lot of small-sized private net bars choose to be black, running illegally without licenses. Even in licensed net bars, there are a lot of black things. Aiming at removing all these widespread illegal phenomena, all the related functional departments of the government choose to take special actions to indiscriminately inspect or readjust all net bar business, resulting in 7 consecutive special campaigns since 2002. However, rather than keeping market in good orders these kind of provisional administrative campaigns have highly increased the operational cost of private net bars and public administration, and more importantly, these national administrative measures constituted deviation from the rule of law in many local areas.