China : China May Ease Limits On Internet Cafe Licenses, (Rumor)

Rumor: China May Ease Limits On Internet Cafe Licenses
April 7, 2006
After a three-year ban, China may soon resume issuing licenses to non-franchised netcafes. As the oversight department of franchised netcafes in the country, the Ministry of Culture approved three years ago only ten companies to develop chain netcafes across the country based on a principle of "growing ten national netcafes and three provincial netcafes in each province". During this period, no new license was given to any stand-alone netcafes. The companies that were allowed licenses during this period include China Unicom, ReadChina.com, China Youth Network Home and Capital Network. Despite the priority that the government has given to chain netcafes, the chain netcafe business in the country has not developed very well. So far, only five of the ten designated enterprises have survived through the past three years. Tuo Zhuhai from the Ministry of Culture said at a recent forum in Wuhan that the chain netcafes have not reached the goal set by the Ministry of Culture and they only account for 10% of the country's total market share. It is not clear yet if and when this new licensing policy will be implemented.