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Firms ignore deadline on encryption software; Some say registration of products could help Beijing to snoop; China


BEIJING -- The deadline for companies to register encryption software passed this week with many apparently ignoring the demands of the Chinese government, again underscoring how difficult it is for the world's most populous country to regulate the Internet.

The government has ordered firms to register the software they use to protect their most sensitive data transmissions, raising concerns that Chinese officials might be trying to find easier ways to pry open e-mail.

Although the American Chamber of Commerce said it thought its members were complying, smaller foreign companies said they weren't, and many Chinese firms hadn't even heard about the regulations.

"When they send me a form and tell me where to send it, I'll send it in," said Michael Robinson, chief technology officer with, an e-commerce firm that caters to young parents and their children. "I'm not trying to be a scofflaw, but I'm a busy man."

Russell Liu, head of Web- Leader Computer Systems, said he didn't know about the requirements.

"Really?" said Liu, upon hearing of the new rules. "There are millions of users using the Internet and e-mail all over the country. How can they execute this plan?"

Fewer than 1,000 companies had complied as of last week, according to the Wall Street Journal. The State Encryption Management Commission, which is overseeing the registration drive, did not return phone calls yesterday.

The requirement for registering encryption software is one of the government's latest attempts to control the Internet, which is growing at an exponential rate in China and is the nation's freest and broadest platform for public speech.

The Internet presents China's authoritarian leaders with a dilemma. How do they take advantage of the technology's economic benefits while preventing the medium from politically empowering their subjects?

Toward that end, the State Bureau of Secrecy forbid people last week from transmitting "state secrets" through e-mail, posting them on bulletin boards or discussing them in Internet chat rooms. Chinese law does not say what constitutes a secret, and the government has broadly interpreted it to jail dissidents or expel journalists it dislikes.

But as the tepid response to software registration demonstrates, the gap between regulation and reality is often a wide one in China. The task of policing the Internet in a country where the number of users more than quadrupled last year to 8.9 million is monumental. In many instances, the government's attempts to control cyberspace have either failed or faded with time.

The regime has tried to block access to certain Web sites, such as the New York Times and Voice of America, but relatively inexperienced users can employ proxy servers to circumvent the government's filtering system, known as "The Great Firewall of China."

In some cases, sensitive sites regarding human rights in Tibet and the Taiwan independence movement are left wide open so that any Chinese with a modem can read the words of the Dalai Lama or Taiwanese President Lee Teng-hui, both of whom the regime officially despises.

October's order banning foreign news articles from Chinese Web sites didn't last long. Even banned books occasionally appear in full text on the World Wide Web, according to a report from the U.S. Embassy, which closely monitors Internet developments in China.

The recent encryption regulations have rattled some foreign companies, though. The government wants extensive information about employees who use encrypted software, including their telephone numbers. The regulations also would require that all electronic equipment in the country use encryption software made in China.

That might be difficult. Some Internet specialists say it doesn't exist.

There are several theories as to why the government is trying to regulate encryption technology. One may be a desire to gain access to the e-mail of dissidents and other groups that Chinese leaders see as enemies -- although government snoops would still have to break personal passwords.

Falun Gong, the banned spiritual meditation group, organized a protest of 10,000 people in April outside Zhongnanhai, the leadership compound in Beijing. Many believe e-mail was a critical factor in the protest's size and success.

The government may demand that foreign manufacturers divulge their source codes, the building blocks of encryption software products. This has generated concern that Chinese companies could knock off the technology, and foreign firms would then be required to buy it.

"Why do they really need to know all this about foreign encryption unless they are trying to get some foreign technology cheaply?" said a Western diplomatic source.

Some Internet experts, though, say the driving force may be the government's worries over the security of its own computer files. Like most of the world, the government relies on Western-made products such as Microsoft Windows. Officials may fear that commercial software programmers have left technological "backdoors" by which they can break through the very security systems they designed.

The People's Daily, the Communist Party's official newspaper, may have been alluding to this in an article published in October just after the regulations were announced.

"The United States leads the tide toward globalization and is using information hegemony to dominate the world," wrote He Dequan, a professor at the Chinese Academy of Engineering. "The United States is fostering and preparing an information deterrent and information warfare. Therefore, when we think about Chinese national security issues in the context of global strategy, we should also think of it from a political perspective."

Yesterday, many foreign firms were taking a wait-and-see attitude toward the regulations, noting that the government often makes seemingly draconian demands only to scale them back later.

"I think everyone's playing it by ear," said Micah Truman, who runs, a marketing company catering to 18- to 28-year-old Internet users.

Truman, who has seen his staff rise from four to 45 workers in the past three years, says he thinks the Chinese government understands the economic importance of the Internet and is not about to strangle it.

"It has to work," said Truman. "Because this is where the world is going, and this is the unstoppable force, and the Chinese government wants it to work."

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