China Bans Mircoblog Comment as 6 Detained on Coup Rumor

China Web Page
First deleted March 20 Sina Weibo tweet on rumors of a coup d'etat in China.

A ban on Internet users commenting on posts to China’s two largest microblogging sites enters its third day after the government closed 16 websites and detained six people for spreading rumors of a coup attempt in Beijing.

Sina Corp., the largest provider of the Twitter-like service with more than 300 million registered users, and Tencent Holdings Ltd., the No. 2 player, announced the 72-hour suspension of the commenting function starting at 8 a.m. March 31, citing a need to clear up rumors and illegal information.

Speculation on the Internet on March 20 of a coup attempt helped spark the biggest jump in four months in the cost of insuring against a default on Chinese government bonds. That was five days after Bo Xilai, earlier seen as a contender for promotion to China’s top decision-making body, was removed as party secretary of the municipality of Chongqing.

“Although the punishment was not harsh, it does send a message to other Internet companies to be more cautious in terms of content control,” JPMorgan Chase & Co. analysts Dick Wei and Evan Zhou wrote in a note dated April 1.

Tencent fell 1.1 percent to HK$214.20 in Hong Kong trading as of 10:29 a.m. local time. Sina fell 1.1 percent to $65.00 in Nasdaq trading on Mar. 30.

Government oversight of microblogging services has tightened as they’ve grown in popularity. In December, China began requiring users in cities including Beijing, Guangzhou and Shenzhen to register their real names. That rule will be expanded to other regions, Wang Chen, minister of the State Council Information Office, said in January.

Government ‘Flexing’

While posts have also long been subject to deletion for their content, this ban on comments is the first blanket restriction the services have applied, said Duncan Clark, chairman of Beijing-based BDA China, which advises technology companies.

“It’s a flexing of muscles” by the authorities, Clark said in a telephone interview yesterday. “I can only see it as a gesture.”

China’s lack of a free press and democracy, and the absence of a transparent mechanism to pick new leaders for the second-biggest economy and the largest online population, escalate the risk of rumors and their potential impact.

Authorities detained the six people for “fabricating or disseminating online rumors” that military vehicles had entered Beijing and that there was “something wrong” happening in the Chinese capital, the state-run Xinhua News Agency reported on the same day the comment ban took effect, citing Beijing police and the State Internet Information Office.

Companies ‘Criticized’

The State Internet Information Office said Sina and Tencent had been “criticized and punished accordingly” by authorities for a number of rumors, Xinhua said.

A spokesman for Sina yesterday had no comment beyond the original statement announcing the ban. Calls to Tencent weren’t returned.

Bo is a member of the ruling Communist Party’s Politburo and had been mentioned by analysts such as Li Cheng, a scholar at the Washington-based Brookings Institution, as a top candidate for inclusion in the Politburo Standing Committee. That group, now comprising nine men, exercises supreme power.

Membership in the Politburo and the standing committee is determined by bargaining and consensus at the top levels of the party. A congress later this year will pick the next generation of leaders, who may run China for a decade.

Bo had pursued development in Chongqing, one of China’s fastest-growing regions, with a top-down push for social equality and a stronger role for government. Others in the party, including the People’s Daily newspaper and a research arm of China’s Cabinet, have called for a smaller state role in finance and industry.

— With assistance by Fan Wenxin

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