You a foreign company? You want to have a Web site in China? Well, we have some forms for you to fill out.

China is ever eager to maintain a degree of official control over anything media related, and that includes Web sites. One of the ways it does this is by requiring companies that have Web sites based in China--anything with a .cn domain or originating on Chinese servers--to have an "Internet Content Provider" (ICP) license, which is issued by the Ministry of Information Industry (MII). You can find the ICP number at the bottom of any properly licensed Chinese Web site, including on the Chinese Google and Yahoo sites.

Some foreign companies that want to start Web-based companies in China find that, rather than jump through the bureaucratic hoops to get their own ICP, it is easier to partner with a Chinese partner that already has one, or to "rent" an unused ICP from a Chinese company. But the MII has just cracked down on that dodge.

According to a brief report in the Xinhua news service:

Regulations for foreign investors operating Internet services in China have been tightened. Web sites that run using rented licenses will be closed.

Domestic telecom companies should not lease or sell licenses to foreign investors, the Ministry of Information Industry (MII) said in a circular issued this week.

Five years ago, China issued regulations concerning foreign investors' telecom business operations and most foreign investors follow the procedure strictly, said the MII.

However, some unauthorized foreign investors continue to improperly offer services using shared or borrowed licenses, or Chinese partners' domain names and trademarks, it said.

How big a problem might this be? Probably not colossal, at least not for any legitimate business whose content or business model doesn't irritate the Government. Even Chinese companies--especially those registered overseas--have played it fast and loose with ICP licenses in the past. Those who do irritate the Government are living on borrowed time whether or not they have an ICP license. But it is symptomatic of the Government's slowly tightening regulatory grip over Internet businesses.

Is it Google...	...or Ganji?

ICP licenses have caused problems for foreign companies before. Google went through a bad patch in China some months ago when it launched its Chinese service. Among other woes, it was accused of using an improperly shared ICP license. It was widely thought that the issue was raised as a way of pressuring former outcast Google--it was entirely blocked in China for a while--to cooperate wholeheartedly with MII requirements for its Chinese operation.

In fact, the ICP issue is a rerun of a situation that also plagues foreign investors in Chinese periodical publishing. To publish a magazine in China requires a license called a kanhao, or "periodical number", which can be fiendishly hard to obtain. Foreign companies wanting to launch magazines in China often "appropriate" unused kanhao numbers by partnering with defunct or nearly defunct Chinese publications. It would look like "Yachting World", read like "Yachting World", and advertise yachts. But if you look closely at the bottom it would read "China Ball Bearing Fabrication Monthly" in tiny print under the registration number. The outstanding China media blog Danwei has published a great explanation of this phenomenon.

Recently, a kanhao scandal detonated the high-profile launch of the Chinese edition of Rolling Stone. The magazine is still around, but had forgo the power of the Rolling Stone brand after its debut issue and revert to the title attached to its kanhao, 音像世界.

A cautionary tale, perhaps, for Internet companies that take MII's move lightly. I'm sure Google and Yahoo would prefer not to relaunch their sites as "Ganji" or "3721", the names officially attached to their respective ICP licenses.