New | Tightening Chinese internet controls may strangle business - Euro Chamber

China’s recent measures to further restrict the Internet will cause massive harm to foreign and domestic business and the curbs risk becoming a tax on companies operating in the country, the European Chamber of Commerce warned yesterday.

Chinese authorities banned virtual private networks (VPNs) in January which enabled users to access websites normally banned in the mainland. In December, Beijing banned Gmail, the popular email service of Google. The mainland is estimated to have more than 600 million Internet users.

The Internet restrictions by the Chinese government “in effect constitutes a corporate Internet tax,” said the European Chamber of Commer said in a statement.

“Restricted access to Internet tools is not merely an unfortunate inconvenience for individuals, it is an increasingly onerous cost of doing business that many companies are finding harder to bear,” said European Chamber President Jorg Wuttke.

“These worrying trends illustrate how excessive tightening of Internet controls can choke business growth and stifle investment in technology and R&D, areas which are crucial for China’s development. This is compounded by the fact that these measures are discouraging much-needed foreign talent from relocating here,” said Wuttke.

“This is not just a problem for international business. We know from extensive conversations with the Chinese public and the private sector that many domestic companies are just as frustrated as our members,” Wuttke added.