Cablegate: Internet Freedom in China:Big Brother has Returned

DE RUEHSH #0010/01 0260230
R 260230Z JAN 10




E.O. 12958: N/A

REF: A. 03 SHENYANG 00626

1. (SBU) SUMMARY. New regulations have been put in place
requiring strict identification of internet users and the
installation of software allowing real-time monitoring of
internet users and remote control of computers in all
internet cafes in Liaoning Province. In order to implement
these regulations, Liaoning has become the first province to
successfully bring nearly all net cafes into a franchise
system in which four state-owned companies now control 80
percent of the total number of cafes. The increased
monitoring and lack of a legal framework to protect personal
information means that cafe patrons -- generally younger men,
rural residents, and less wealthy netizens -- have less
privacy than ever. No details are available, but punishment
of the cafe owners and any users who violate the regulations
is to be carried out by the Public Security Bureau. Local
site visits suggest that cafe workers are largely unaware of
the franchising trend but that the new identification and
software systems are strictly in use. PolOff and local Amcits
were refused access because they have no national ID card.
Officials in Guangdong have reportedly expressed interest in
the Liaoning model, which the central government has praised.

How it works
2. (SBU) According to regulations implemented over the past
year or so, internet cafes in Liaoning are now required to
install systems to allow: 1) rigorous verification of
personal identities; 2) real-time monitoring ("Farsighted
Eyes" software) of internet activity; 3) remote control of
computers (the "Liaoning Web Culture Monitoring Platform");
and the blocking of pornography and gambling websites. The
system is set up so that when a user enters a cafe, their ID
card is placed in a card-reader and a picture of the ID and
information about the individual appears on a cafe worker's
computer screen, allowing easy verification of the user's
identity. Internet usage is monitored at near real-time by
the local Cultural Administration Department. According to a
report on China Central Television (CCTV), the local Cultural
Administration authorities also monitor images from cameras
that are placed around the cafe. The images are refreshed
every ten to fifteen minutes, so if the authorities see
anyone suspicious, they can activate a camera embedded in
that person's computer screen to further verify the user's
identity. The authorities can also cut the internet
connection. Users who log onto illegal websites are flagged
and can be monitored real-time. Violations can also be
reported via a new "12318" hotline. If the Cultural
Administration authorities become aware of a violation, the
cafe is ordered to take action. If no action is taken or
further action is necessary, the Public Security Bureau (PSB)
is called. Local PSB contacts verified they are responsible
for punishing both cafe staff and individual users but did
not elaborate as to the nature of the punishment or the
frequency of violations.

If at First You Don't Succeed...
3. (SBU) With these new rules in place, the provincial
government has sought to bring uniformity to internet cafes
to ensure better policy implementation. In late 2009, the
Liaoning Bureau of Cultural Affairs, the Propaganda
Department of the Liaoning Party Committee, and the Liaoning
Business Administration Bureau called for independent
internet cafes to join franchises and banned the issuance of
new licenses to independent internet cafes. As an incentive,
internet-service providers were required to reduce internet
usage costs for all such chains by 30 percent; China Unicom,
China Net, and China Mobile were required to provide chains
with value-added services; and all chained cafes were given
licenses to sell audio and video products as well as food and
beverages. According to press reports, the call for internet
franchising has been a success. The number of internet cafes
fell from 8,094 at the end of 2008 to 7,413 cafes at the end
of 2009. At the same time, the percent of cafes under a
franchise agreement grew from less than 10 percent to more
than 99 percent. There are now eight franchising companies,
of which four state-owned companies control 80 percent of the
province's internet cafes. Although our efforts to meet with
the Liaoning Bureau of Cultural Affairs have so far been
unsuccessful, the press reported that the central
government's opinion that "Liaoning's experience in

SHENYANG 00000010 002 OF 003

franchising of Internet cafes is worth summarizing and
promoting." Wang Yequn, Vice Inspector of Guangdong Bureau
of Culture, has also said he is interested in replicating
Liaoning's model.

4. (SBU) Liaoning's apparent success at franchising its
internet cafes follows repeated attempts at national and
provincial levels to implement franchising policies. The
Ministry of Culture's first attempt to link internet cafes
in 2003, with its "Notice to Enhance Administration of Chains
of Internet Services," failed to have any real effect. In
2006, however, the ministry issued its "Plan to Upgrade
Digital Content Amongst Internet Cafes." The 2006 plan bears
a strong resemblance to Liaoning's current plan. Initially
implemented in Beijing and aimed at making franchises more
competitive with independent internet cafes, it gave chains
access to lower prices from hardware and software producers
and hardware wholesalers. It too failed, however, and in
2006, China Unicom and Tie Tong, two state-owned enterprises,
were forced to close thousands of cafes they had franchised.
Independent cafes remained more profitable than chains due to
their greater ability to ignore rules regulating internet
cafes originally set forth by the Ministry of Culture in
"Regulations on the Administration of Business Sites of
Internet Access Services" in 2002 (REF A).

We Hear the Cries of the Parents
5. (SBU) According to an announcement from the Liaoning
Bureau of Cultural Affairs in September, the leading factor
in driving efforts to exert greater control over internet
cafes was the demand by parents seeking to improve the moral
values of their children. The announcement said it had four
primary objectives to improve the moral standing of Chinese
youth. First, the remote control of computers ensures that
cafes can be closed at midnight and that internet connections
can be cut if anyone flouts the regulation. Second, the
standardized identification systems ensure that the
authorities know the person using the internet and that the
given identity is real. Third, the anti-pornography and
anti-gambling software ensures that users are not being
corrupted. Finally, the real-time monitoring ensures that if
a user is looking for or at something that is "unhealthy,"
officials can be made aware of this and appropriate action
can be taken.

Propaganda vs. Reality
6. (SBU) In a report released by the Liaoning Bureau of
Cultural Affairs from "Liaoning Province Convenes the
Internet Cafe Special Administration and Promotion of
Franchising Integration Meeting," Bureau of Cultural Affairs
chief Guo Xingwen stressed the need for increased publicity
and propaganda to create positive public opinion towards the
new regulations. As a result, reports on both Xinhua News
and CCTV have hailed the program a success. Our visits to
local internet cafes and discussions with contacts suggest
that while the reality is not quite as reported, anonymous
and unmonitored web usage in Shenyang's internet cafes is
disappearing. PolOff and two locally employed staff (LES)
visited several internet cafes and were required to show
identification at each cafe visited. Because PolOff's
Foreign Affairs Office (FAO) ID card did not register with
the scanners, however, he was unable to use a terminal. In
response to a query from PolOff, one clerk said she was
unaware of the move towards franchising. When asked about
closing times, the same clerk stated her cafe was open 24
hours a day, suggesting it was an independent cafe and that
strict enforcement had not yet taken root. (NOTE: In a sneak
preview of what may be a better test of policy implementation
over the next year, the clerk smoked a cigarette despite a
large no-smoking sign facing her desk and a recent
announcement that Liaoning is one of five selected trial
provinces to implement bans on smoking in public places. END
NOTE) An Amcit guest at ConGen Shenyang's "watch party" for
the Secretary's Speech on Internet Freedom reported being
turned away from three cafes but paying a small bribe to get
into a fourth (REF B). A few days later, the same Amcit
reported being turned away again from multiple other cafes
and being told at one cafe that it was for "Chinese only."

7. (SBU) Consulate LES reported they had to show ID cards in
every cafe they approached, even those where they were
previously not required to do so. Our staff also confirmed
that the "Farsighted Eyes" real-time monitoring software and

SHENYANG 00000010 003 OF 003

"Liaoning Web Culture Monitoring Platform" were in place at
all the cafes visited. However, none of the cafe staff could
tell us the origin or the cost of the software. A
representative of Liaoning Green Cloud, Ltd., one of the
eight franchise companies, responding to queries from our
LES, said it costs RMB 80,000 for an individual cafe to
purchase the ID-verification system, the monitoring software,
and the anti-pornography and anti-gambling software. For an
additional fee, his company could also arrange business and
fire-department licenses. Alternatively, licenses could be
purchased directly from the local Cultural Administration
Department. One of our LES investigators reported that the
cafe staff members were noticeably uncomfortable when asked
about the new software. Efforts to access the properties of
"Liaoning Web Culture Monitoring Platform" were
unsuccessful, as access requires authorization and a password.

8. (SBU) One LES contact who owns an independent internet
cafe said his good personal relationship ('guanxi') with the
Bureau of Cultural Affairs and internet service providers has
resulted in prices that are competitive with those of the
dominant franchisees, thus enabling him to remain
independent. With the ban on licenses to new independent
cafes, difficulties in transferring existing licenses, and
dissolution of licenses upon the owner's death, our contact
said the independents will soon disappear. While refusing to
divulge the cost of the software, the contact said it must be
installed in all cafes and that it is already in use in his
cafe. He concluded that, with these systems in place, the
Bureau of Cultural Affairs now has the ability to monitor the
activity of every internet cafe user in Liaoning Province.

Who's Affected?
9. (SBU) Estimates of how many Liaoning residents rely on
internet cafes for their primary access to the web remain
difficult to pinpoint. However, the number likely surpasses two million
The director of the state-owned Northeast Network, once the
home page of all provincial internet cafe computers,
suggested that there were now 7.1 million internet users in
Liaoning, with perhaps a third of those relying on cafes.
(If one applies the national average for internet usage --
about 28 percent of the population or 360 million people --
the actual count could be closer to 12 million users in
Liaoning and proportionally higher number relying on cafes.)
The director suggested the majority of those using cafes were
younger, less affluent males in urban centers and smaller
cities or rural residents lacking home access. The cafes
visted by Congenoffs were all one-half to three-quarters full
late in the morning. The users were primarily males in their
late teens to mid-twenties. Primary activities included
gaming, chatting, and surfing. Some student guests at the
"watch party" said they occasionally use cafes even though they
have internet access at home and at school. They did not
appear to be aware of the new monitoring capabilities, though
many were aware of new identification systems and said that
it was no longer possible to be anonymous in internet cafes
(REF B).


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