Facebook Ban to Lift in Shanghai Free-Trade Zone

The Chinese government has decided this week to lift website bans in the Shanghai Free-trade Zone. Sites considered politically sensitive by the Chinese government since 2009 could be accessible in this area by October. Other area hope to enjoy free Internet access as well, but meantime other mainland residents continue to rely on VPN services.

Why the Shanghai Free-trade Zone

The Shanghai Free-trade Zone was a plan endorsed by Premier Li Keqiang in July and approved by the State Council late in August. It is to be the first free trade area in mainland China, under terms similar to those governing Hong Kong. This plan was announced by the Chinese government in July with a statement from the Premier of his idea for the Zone as a preview of what China will be as it moves to improve economic infrastructure. The plan to open up Internet access in the Zone is linked to this idea of a new and economically vibrant China. Websites expected to be unblocked include Facebook, Twitter and The New York Times.

Internet access is a vital part of any country’s initiative to improve economic stability and competitiveness in the global economy. For this reason, other mainland cities and provinces want to be granted improved access as well. Tianjin and Guangdong are among those lobbying for approval to unblock websites. While they are hopeful that they may be allowed free Internet access pending the success of the new Zone, users in these other areas of China continue to rely on VPN connections to access needed content online. The Shanghai Free-trade Zone will cover an initial area of just under 30 square kilometers the Pudong New Area, which includes Yangshan deepwater port, and the international airport and Waigaoqiao duty-free zone. Later expansion to encompass the whole Pudong district of over 1,200 square kilometers is expected. Further expansion of the Zone is hoped for, bringing with it free Internet access.

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Encouraging Foreign Investment for Economic Growth

Not only will websites be unblocked in the Shanghai Free-trade Zone, but those in charge of the Zone will be welcoming bids from foreign telecommunications companies. These telcos can bid for ISP licenses to provide services within the Zone. The decision to allow foreign competition was endorsed by Premier Li Keqiang and other high ranking officials. The Premier is keen to begin developing the area as a stepping stone towards other bigger financial and economic reforms. State-owned China Mobile, China Unicom and China Telecom are expected to be the first to provide Internet services in the area, and accept that they may face competition from foreign telcos.

Though new foreign ISPs will not be able to provide free Internet access outside of the Zone, many mainland residents hope that they will soon be able to enjoy unhindered Internet access as the Zone proves an ability to boost the economy. Internet access in China is blocked due to government fears that access to content will trigger political and social rebellion. Many currently use VPN services to access blocked website content and other applications and services that allow them to function properly in their jobs. For more information on these services, please read our VPN provider reviews. Analysts predict that the need for VPNs may continue for many more years despite the milestone achieved through the creation of the Shanghai Free-trade Zone. The government is just not ready to allow free Internet access to average Chinese Internet users.

One government source aware of the plans for the Shanghai Free-trade Zone commented that creating a comfortable Internet environment was key to attracting foreign investment. The comfort of these foreign company workers, he said, rested in free access to the news, social media, and other websites that they are accustomed to using. Living within the Zone, they will naturally compare how at home they feel versus the situation in the rest of China. The unblocking of websites in this special Zone is still a very sensitive political issue, however, and thus the government sources who provided information about China’s plans refused to be named.

By attracting more foreign investment, the country hopes to also liberalize foreign exchange and the interest rate system. This will in turn make capital flow much easier. The banning of sites like Facebook and Twitter was closely linked to political movements, but the government has so far made no comment on how fears of recurring protests will be managed within the Zone. Reports have come out, however, that Beijing still worries about the impact of new media on social stability.

Major Internet companies like Google and Facebook have long lobbied to lift the bans controlled by the Golden Shield project of the Ministry of Public Security. Domestic political pressure has hindered past attempts to open China to foreign telecommunications companies. The new free-trade zone is being established in part to create a new avenue for foreign investment despite political censorship. Industry regulators oppose the Zone, but the Premier continues to support the plan, following Deng Xiaoping’s footsteps in the opening of the Shenzhen special economic zones 30 years ago.

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