Post by James Seng at CircleID.COM on Jun 01, 2015:

Recently, there has been a lot of noise about China tightening control of the new top-level domains and how it could severely damper domain name registrations in China and one should make preparation for the worst.

Initially, I tried to stay out of this as I know all the players behind this. But given that at least 3 people have emailed me asking what's going on, I decided to clear the air here.

It started with a report by Brandma on China's "Special Operation" to regulate Domain Name Registrations which warns that "Getting the license requires understanding of how the regulatory system works and how one should respond as it evolves. It's also like a mini ICANN application process, but this time in Mandarin."

Contrary to these "doomsayer" reports, there is really no need to panic.

China's regulation on domain names are stipulated in "China Internet Domain Name Management Regulation, MIIT Regulation No. 30" published on November 5, 2004. So what we are dealing with here is nothing new.

MIIT has been working on a revision of this regulation since 2012 to deal with the new TLDs but this has not been put forward for public comments, least implemented. However, the changes are kind of an open secret to those who are familiar with China but that is not what we are dealing with here.

What kicks off Brandma's report is that MIIT (1) have issued formal notice to all the China registrars to remind them that they have to adhere to Regulation No. 30, and that MIIT will do random inspections and audits (2). Registrars are given advance notice so they can resolve any non-compliance from April to June and inspections will start from July onwards.

So what's about the "mini-ICANN applications" that Brandma is talking about? In 2012, just before closing of ICANN applications for new gTLD, MIIT released "Notice on Internet Top Level Domain applications" (Regulation No 89, 2012) that requires any TLDs that wants to be approved by MIIT to register with them. It is more or less a subset of the ICANN AGB except it is to be submitted in Chinese.

As of today, there 14 TLDs approved by MIIT to operate in China which you can do a quick google search, such as "cn", "中國", "ren", "citic", "wang", "top", "商城", "網(wǎng)址" etc. (3)

Also contrary to the some speculation that this is going to damper the domain names registrations, new gTLDs take up has been pretty robust in Chinese market. 3 out of the top 10 new gTLD ("網(wǎng)址", "wang", "top") are focused on Chinese market. When "公司" and "網(wǎng)絡(luò)" goes lives, it will also be among the top 10.

I suspect there are a lot of new gTLDs who might be interested in China market but not on the approved list. Brandma report is one way to tell the industry they can help but instead seems to have pissed off some quarters, which I won't translate here.

So far, the approved TLDs are only the ones from governments (CNNIC & CONAC) or the ones affiliated with KNET and Zodiac. This is not to say outsiders are not welcome in China (Zodiac is majority non-Chinese owned), but if you know your way around, China could be a very interesting market right now.

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(1) Brandma original report made a mistake stating that it came from Cyberspace Administration of China (CAC) which is a totally different entity from Ministry of Industry and Information Technology (MIIT)

(2) The exact mechanism of regulations is a complicated combination of two set of lists, a list of MIIT approved TLDs to be sold in China, and another list of TLDs approved to be sold by the registrars — but that's not the story here either.

(3) Disclosure: I am one of the largest shareholder of Zodiac, which is involved in applications for "ren", "citic", "top", "wang" and "商城" among others.