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Posted by: Bruce Einhorn on May 07, 2006
Tragedy over the weekend at two Internet cafes in the central Chinese city of Hefei. According to Xinhua, a bomb exploded at one Internet café at 9:36 on Friday night, with another explosion less than half an hour later. The blasts killed two people, ages 23 and 25, and left four others injured. Xinhua says that police are calling the explosions “a criminal case” and are investigating.
The bombings no doubt reinforce the perception among many Chinese officials that the country’s Internet cafes are incubators for criminals and other undesirables. Gaming companies like Shanda Interactive have made reaching out to Internet café owners a key part of their marketing strategies, since the country has tens of thousands of cafes that provide Internet access to young people without their own computers. But the government has been going after the cafes for several years now, worried about poor safety (a fire at a Beijing café killed 25 people in 2002) as well as lax security (ability to access illegal content like porn). The crackdown that followed the Beijing fire saw the number of Internet cafes shrink from 200,000 to 110,000. But simply shutting down all the cafes isn’t an option, so the Chinese government wants to control them by having some large companies operate nationwide chains. That’s created opportunities for some foreign-owned companies: Intel is targeting Internet café franchise owners, offering ways for them to manage the PCs in their shops. Last year, Intel and Tom Online, controlled by Hong Kong billionaire Li Ka-shing, announced plans to open 13 “Intel i-Café Music Studios,” enabling Chinese musicians to use Internet cafes to publish their music easily.
Just last month, Chinatechnews reported speculation that the government was ready to ease its limits on Internet cafes and start issuing licenses again to owners that weren’t part of franchises. After the bombings on Friday, liberalization is probably on the back burner again.
BusinessWeek’s team of Asia reporters brings you the latest insights on business, politics, technology and culture from some of the world’s biggest and fastest-growing economies. Eye on Asia’s bloggers include Asia regional editor Bruce Einhorn, Tokyo reporter Ian Rowley, Korea bureau chief Moon Ihlwan, Asia News Editor and China Bureau Chief. Dexter Roberts, and Hong Kong-based Asia correspondent Frederik Balfour.