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Internet Free Trade Zone

Stefan Hammond (Computerworld HK) | Oct. 10, 2013
The Shanghai Free Trade Zone is now open for business. But how open is the FTZ's Internet access?

Macau territory, or China?
China's economic growth rates over the past two decades are the envy of the world. And as the economy matures, new schemes like the Shanghai FTZ are needed.

Then there's the Hengqin New Area, nominally in Zhuhai but just west of Macau's Cotai Strip—the University of Macau has built an extension there, with power from Macau's electricity provider CEM and Internet access is provided by CTM—Macau's dominant telco and ISP.

"Hengqin is part of Zhuhai City," said a Macau-based source. "The Zhuhai SEZ covers just part of the city. Only the 1 sq km UM campus is under Macau's temporary jurisdiction, a kind of exclave if Macau were an independent country, at least until December 20, 2049, when the Macau SAR comes to an end."

Hengqin Island is part of the Zhuhai SEZ. But approximately one square kilometer is under Macau administration. This means that University of Macau students won't be hauled out of class and confronted with police for their tweets, as happened to Yang Hui.

International business needs a free Internet
But restricting the Internet mean restricting ideas and collaboration. Some in Hong Kong fear that the Shanghai FTZ will affect Hong Kong adversely. With greater convertibility for the yuan and similar measures, Shanghai will become a more prominent financial center than it is now.

But not all multinationals are impressed by the ability to read the NYT online. Most need access to all their data, they need file-transfer capabilities in bulk and 24/7 connections with offices worldwide. New areas of growth like healthcare-tech depend on unfettered Internet access.

Don't expect it. According to a CNN story http://edition.cnn.com/2013/10/04/tech/opendoor-app-apple-china/index.html "Apple has been accused of kowtowing to the Chinese government by pulling from its China App Store a product enabling users to circumvent firewalls and access restricted sites."

"OpenDoor, a free app that provides users a randomized IP address to keep their browsing habits anonymous and shielded from censors, was removed after the tech giant deemed it contained 'illegal content,' the app's lead developer told CNN. It remains available in App Stores outside China."

Double-edged sword
The Chinese authorities can't have it both ways. They can't provide a truncated Internet and expect every type of multinational to sign up for office space in the Shanghai FTZ.

By restricting Net access, they are de facto restricting the types of businesses that will set up shop in the new zone. Technology is changing business at an unprecedented pace. Many businesses will examine their Net shackles and decide to locate elsewhere.

Does the Shanghai FTZ want to cut itself off from the future? Many of China's businesses are world-class, despite having only a few decades to build brand-awareness. But brand-equity is now supported by tools like Twitter, Facebook, and websites that can link to whoever they please.

And that's today—once technologies like 3D printing become mainstream, the business picture will change once again.

 

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