Best days ahead for China's Internet firms

Some people have cried wolf following the decision by Chinese authorities to regulate the online broadcast industry and penalize Internet firms for allowing pornographic content. Pessimism about China's Internet firms was obvious. The share price of Tencent fell 3 percent after four popular U.S. television shows were banned from being broadcast on online video streaming sites. Shares of Sina plummeted after being revoked some online publication licenses. Speculation has been building, out of ulterior motives or ignorance, that the cases spell trouble for China's flourishing Internet stars and might precede a "wider crackdown" on Internet companies, the Internet economy or even the use of the Internet itself. The fact is that they are just standalone cases by which the Chinese authorities try to fill the "regulation vacuum" concerning content for online broadcast, and, in the case of Sina, enforce its anti-porn laws. Online video content regulation and anti-porn laws should be familiar to Internet users in most countries, especially in the West, where the most sophisticated and sound laws are in place to guard against misuse of the Internet and harms to public interests, especially minors. Both cases should not have come as surprise. For the TV show case, the state broadcast regulator issued a notice in March to enhance online video content regulation. For the Sina case, it is common sense that any law-breakers must be penalized. It is as simple as this. Nothing more. All the other conspiracy theories are misleading, either to ordinary people or investors coveting China's Internet economy which holds great business potentials. Just as the real economy, the Internet economy also needs rules and orders, maybe even more, as the intangible Internet is far more tricky to trace and manage. Be it against online rumors, against pornographic content or measures to guard Internet security, they are all part and parcel of China's efforts to create a healthier environment for people and businesses to jump on the Internet economy bandwagon. In this sense, the two cases should have come as a boon to Internet companies, as they would herald a cleaner, healthier, more certain and rule-based Internet business environment. The Internet economy is booming, and, given the huge user base in China, is set to thrive for many years to come. In 2013, China's Internet was a platform for about 9.9 trillion yuan of commerce, and about 1.2 trillion yuan was paid on mobile phones, the users of which reached a whopping 838 million by January this year. It is business as usual in China's Internet economy and Internet firms, calm and cool, are pursuing their business plans. Coincidentally, online video business, which was claimed to be under threat, was a target in a 1.22-billion-U.S.-dollar takeover deal between Alibaba and Youku Tudou on Monday.