China TMT: Month-to-month Replace – June 2022 Problem

This newsletter summarizes the latest developments in technology, media and telecom in China with a focus on the regulatory, enforcement and industry developments in this area.

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Regulatory Developments

1. NPC Standing Committee releases Lstatutory Worc Plan in 2022 to speed up legislation in telecom and other areas

On 6 May, the Standing Committee of the National People’s Congress (NPC Standing Committee) released the Legislative Work Plan in 2022 (the “Legislative Plan”). According to the Legislative Plan, NPC Standing Committee will continue to review the Anti-Monopoly Law, the Anti-Telecom and Online Fraud Law and other laws. Meanwhile, the Anti-Unfair Competition Law will be revised and the Telecom Law will be enacted this year. The Legislative Plan specifies that the pace of legislation in the following fields will be accelerated: digital economy, internet finance, artificial intelligence, big data, cloud computing, etc.

2. The MIT released its Regulation Development Work Plan in 2022, specifying a number of telecom regulations development other revision work

On 17 May, the Ministry of Industry and Information Technology (MIIT) released its Regulation Development Work Plan in 2022 (the “Plan”). According to the Plan, the MIIT will draft ten regulations in 2022, including the Provisions on Protecting the Personal Information of Telecom and Internet Users (Revised), the Administrative Provisions on Short Message and Voice Calling Services, and the Administrative Measures for the Network Access of Telecom Equipment (Revised).

3. THey Supreme Peoples Court issued the Opinions of the Supreme People’s Court on Strengthening Blockchain Application in the Judicial Field

On May 25, the Supreme People’s Court issued the Opinions of the Supreme People’s Court on Strengthening Blockchain Application in the Judicial Field (the “Opinions”). The Opinions put forward requirements for the construction of blockchain platforms in the people’s courts and point out that it is necessary to: (1) enhance judicial credibility through the use of blockchain-based tamper-proof technology; (2) improve judicial efficiency and optimize business processes through blockchain; (3) foster the potential of blockchain interaction to enhance judicial synergy; (4) utilize the trusted value of blockchain alliance to serve economic and social governance.

4. The CAC and 4 other departments jointly issued the Opinions on Regulating Livestreaming Rewards and Strengthening the Protection of Minors

On 7 May, the Cyberspace Administration of China (CAC) and 3 other departments jointly issued the Opinions on Regulating Livestreaming Rewards and Strengthening the Protection of Minors (the “Opinions”). The Opinions require website platforms to prohibit minors from participating in live streaming rewards or being streamers, and to optimize the “teenager mode” of website platforms.

5. The MIIT and other 11 departments jointly issued the Notice on Conducting “Collaborative Action” to Promote the Integrated Innovation of Small, Medium-sized and Large Enterprises (2022-2025)

On 16 May, the MIIT and 10 other departments jointly issued the Notice on Conducting “Collaborative Action” to Promote the Integrated Innovation of Small, Medium-sized and Large Enterprises (2022-2025) (the “Notice”). The Notice outlines that digitalization should be the driving force to open up the data chain of small, medium-sized and large enterprises. Relevant measures include: (1) encouraging large enterprises to create digital service platforms that meet the characteristics of small and medium-sized enterprises (SMEs), and encouraging large enterprises to lead SMEs to carry out technological transformation; (2) guiding SMEs to deeply understand the concept of transformation, determine the transformation path, improve transformation capabilities, and accelerate the process of digitally networked intelligent transformation; (3) implementing the Industrial Internet Innovation and Development Action Plan, and strengthening digital analysis and intelligent monitoring of small, medium-sized and large enterprises.

6. the NDRC and the Ministry of Commerce issued the Catalog of Industries for Encouraged Foreign Investment (2022 Edition) (Draft for Comment)

On 10 May, the National Development and Reform Commission (NDRC) and the Ministry of Commerce released the Catalog of Industries for Encouraged Foreign Investment (2022 version) (Draft for Comment) (the “Catalog”) to solicit public opinions. Compared to the 2021 version, the new catalog encourages foreign investment in manufacturing and the adds or expands the items of components and equipment manufacturing. The Catalog also encourages foreign investment in producer services and adds or expands the items of professional design, technical services and development.

7. The Regulations on the Promotion of Digital Economy in Beijing (Draft for Public Comments) what released

On 7 May, the Beijing Municipal Bureau of Economy and Information Technology released the Regulations on the Promotion of Digital Economy in Beijing (Draft for Public Comments) (the “Regulations”) to solicit public opinions. The Regulations build a regulatory system for Beijing’s digital economy in terms of digital infrastructure, data resources, digital industrialization, industrial digitization, digital governance, and digital economy security and safeguards.

8th. The Regulations on the Promotion of Digital Economy in Hebei Province what released

On May 27, the Regulations on the Promotion of Digital Economy in Hebei Province (the “Regulation”) was adopted by the Standing Committee of the Hebei Provincial People’s Congress and will come into force on July 1, 2022. The Regulation, as the fourth provincial regulation of digital economy promotion, focuses on digital infrastructure construction, data resource development and utilization, digital industrialization, industrial digitization, digital governance, Beijing-Tianjin-Hebei digital economy collaborative development, protection and supervision, and other aspects.

Enforcement Developments

1. THey Shanghai High Peoples Court released cases: Bitcoin is subjected to the legal rules of property rights

On 5 May, the Shanghai High People’s Court released an article on a Bitcoin-related case. In the case commentary, the court states that Bitcoin could be subjected to the rules of property rights considering that Bitcoin has economic value and conforms to attributes of property to some extent.

2. The Beijing Internet Court released typical cases of judicial protection for minors in cyberspace

On May 26, the Beijing Internet Court held a press conference to release 8 typical cases concerning the online disputes that relate to minors. The typical cases reveal the following problems: (1) Some manufacturers and sellers of intelligent terminal products did not install network protection software for minors on their products or failed to inform users of the installation channels and methods in a prominent way; (2) Some network service providers had poor identity verification methods; (3) Some network service providers failed to provide significant notifications on information that may affect the physical and mental health of minors, and failed to take timely measures to deal with behaviors that may infringe on the rights and interests of minors; (4) Some network service providers did not set up specialized channels for handling minors’ complaints.

3. The CNKI was investigated due to being suspected of monopoly

On 13 May, the State Administration for Market Regulation issued a notice stating that it had launched an investigation into CNKI’s suspected monopolistic behavior based on preliminary inspections. On the same day, an expert of the Anti-monopoly Commission of the State Council issued an article saying that the investigation is an important step for China’s anti-monopoly enforcement agencies to actively respond to social concerns and to regularly supervise the platform economy, which is of great significance in maintaining fair competition, promoting knowledge production and flow, promoting innovation, and protecting consumer interests and public interests.

4. The Illegal and Bad Information Reporting Center of CAC released the disposal of online infringement reports on major commercial websites and platforms in April 2022

On May 11, the Illegal and Bad Information Reporting Center of CAC released the disposal of online infringement reports on major commercial websites and platforms in April 2022 (the “Report”). The report shows that Weibo, Douyin, Tencent and other major commercial websites and platforms handled 439,600 reports of network infringement in April 2022. The reported cases mainly include privacy infringement, insulting, rumor and slander.

Industry Developments

1. SASAC: Encouraging the development of listed technology enterprises

On 18 May, the State-owned Assets Supervision and Administration Commission of the State Council (SASAC) held a conference. At the conference, the SASAC indicated that the development of listed technology enterprises should be encouraged, key talents should be well used by listed technology enterprises and high-quality resources should be connected to the capital market.

2. CAICT: in the first quarter of 2022, the total market value of China’s listed Internet companies fell 20% from the end of last year.

On May 12, the China Academy of Information and Communication Technology (CAICT) released the Operation Condition of China’s listed Internet Enterprises in the First Quarter of 2022 (the “Operation Condition”). The Operation Condition shows that in the first quarter of 2022, the market value of listed Internet enterprises in China has fallen sharply due to adverse factors such as the risks of audit and supervision in the US, bottlenecks to the growth of Internet enterprises and Covid- 19 epidemic. By the end of March 2022, the total market value of listed Internet enterprises in China was 9.9 trillion CNY, down 20.2% from the end of 2021.

3. The MIIT released the list of cross-industry and cross-field industrial Internet platforms in 2022

On 24 May, the MIIT released the list of cross-industry and cross-field industrial Internet platforms in 2022 (the “List”). The List indicates that the industrial Internet platforms of 28 enterprises, including FusionPlant Industrial Internet Platform of Huawei Technologies Co., Ltd., have been selected. Compared with the list published in 2021, the industrial Internet platforms selected in 2022 cover a wider range of industries and fields.

4. 2022 China Optical Communication High Quality Development Forum was held

On May 31, 2022 China Optical Communication High Quality Development Forum was held online. At the forum, stakeholders in the whole industry chain, such as research institutes, universities, operators, equipment manufacturers and Internet vendors, discussed the development of optical communication industry from multiple perspectives, including policy, technological innovation, application expansion and future evolution.

5. The CPPCC held a consultation conference on the topic of “Promoting the Sustainable and Healthy Development of the Digital Economy”

On 17 May, the National Committee of the Chinese People’s Political Consultative Conference (CPPCC) held a consultation conference in Beijing on the topic of “Promoting the Sustainable and Healthy Development of the Digital Economy”. The conference specified that China should promote the combination of digital economy and real economy, guide SMEs to carry out digital transformation, and achieve the full potential of industrial Internet. The CPPCC also pointed out that China should clarify the rights of data ownership, usage, operation, income and so on, stimulate innovation on the basis of safeguarding national network, encourage international cooperation in the field of digital economy and actively participate in global digital governance .

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