Chinese government to offer more “guidance” on Internet development

The Chinese government will focus on developing new media and building international web brands, according to a national outline for cultural reform issued February 15. Internet companies like Baidu (BIDUquote) , Renren (RENNquote), Tencent (TCEHYquote), and Sina (SINAquote) may find the government getting more involved in their businesses, whether they like it or not. 

According to Xinhua, the government’s official press agency, China will undertake major projects in emerging sectors such as digital publication and mobile multimedia.

The country will give more support to smaller cultural enterprises and to intellectual property rights, expand its market for popular culture, and — in theory — promote independent innovation. Goals include the building of 50,000 movie screens in rural area, and making sure television and radio networks are accessible to 99% of the country’s population by 2015.

Chinese internet companies will be more concerned about China’s plans to “increase efforts to promote good values among its citizens.” According to the outline, ”the cultural environment should be cleansed so to ensure the healthy growth of young people.” 

According to China Daily, the government will “cultivate a civilized online environment” by stepping up regulation of social-networking sites and instant messenger services. In other words, the recent crackdowns on microblogging will continue.

Investors unfazed by the Chinese government — or looking to take advantage of any stock drops that are likely to result — should look at the  Global X Social Media Index ETF (SOCLquote) or the iShares FTSE China 25 (FXI, quote), which have substantial holdings in Chinese social media and telecom companies.