Tightening the Leash on China’s Internet—And a Bubbly Chinese Tech IPO

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May 4 is known in Chinese history as the day in 1919 when university students in Beijing began nationalist protests that eventually led to an intellectual movement championing, among other things, democratic reform. So it was rather ironic that Chinese officials chose that day in 2011 to announce the creation of a new agency called the State Internet Information Office, which will “guide, coordinate and supervise the relevant agencies in strengthening management of Internet content,” according to a deceptively bland, Orwellian government notice.

It’s not yet certain whether this organization has been charged with new duties or whether it merely centralizes the multiple Chinese agencies engaged in Internet spying and censorship. Either way, its formation has come at a politically troubled time in Chinese history in which a government crackdown on free thinkers has resulted in the detention of dozens of activists, lawyers, artists and online commentators.

Tens of thousands (if not more) of China’s online censors regularly delete or ban searches of words considered sensitive, such as “jasmine” during the North African and Middle Eastern protests or the name of contemporary artist Ai Weiwei who was detained last month after failing to curb his frank assessment of China’s political strictures. Personal emails aren’t personal at all; Chinese have gone to jail for expressing in their private online correspondence what in many countries would be considered mild, even innocuous, anti-government sentiment. Foreign journalists living in China have had their emails accounts hacked.Although China now boasts the world’s largest number of online citizens, its Internet operates in a parallel world. Because Twitter and Facebook are banned in China—presumably to halt the kind of untoward, online-organized protests that have infected North Africa and the Middle East—local clones of these sites have proliferated. The same day that Beijing’s new Internet-monitoring agency was announced, Renren, China’s more pliant version of social-networking company Facebook, held its initial public offering. After one day of trading, the company had amassed a cool $743 million, raising its valuation to 72 times last year’s sales. (By contrast, Facebook managed a mere 25 times, though it is—and was—a far bigger company.)

But Renren’s successful IPO notwithstanding, the company faces the same problems shared by other Chinese tech firms: murky company data, intellectual-property concerns and a tight government leash on content. And now there’s even a new agency charged with censoring companies just like Renren. We’ll have to see what this year’s May 4 movement brings to China’s virtual world.

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