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What's Going on in China's Domain Name Industry?

James Seng

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 中国互联网络域名管理办法(信息产业部第30号令 — loosely translated as, "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 MIIT1 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 audits2. 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 关于互联网通用顶级域申请有关问题的通告 or "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", "中国", "ren", "citic", "wang", "top", "商城", "网址" 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. 3 out of the top 10 new gTLD ("网址", "wang", "top") are focused on Chinese market. When "网站" and "网络" goes lives, it will also be among the top 10.

In fact, Zodiac just ran some auctions of reserved "wang" names and the results have been pretty impressive. Names like 888.wang was auctioned for 190,000 yuan, jiaju.wang for 118,000 yuan and yiyao.wang for 114,000 yuan. Based on the on going auction of 360.wang, it is likely to cross 500,000 yuan which would be a record for new gTLD in China.

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.

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.

By James Seng, Vice President
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Sorry quick amendments: "When "网站" and "网络" James Seng  –  Jun 01, 2015 3:38 PM PDT

Sorry quick amendments: "When "网站" and "网络" goes lives, it will also be among the top 10." I meant to say "公司" and "网络" which is both operated by CNNIC. These are old TLDs which was operated by CNNIC for a longest time before even new gTLDs. They have yet to port all their names over to the new gTLD and when they do, they are likely to be in the top 5.

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