Online businesses which make a profit in Beijing will be subject to the government's business-licence regulation from August 1, which would make the national capital the first to pilot the e-commerce regulation in China.

"The administration will use technical measures to trace online shops that evade the regulation after the deadline, and close their online links," said Wang Jing, the official in charge of special transaction monitoring with the municipal administration of industry and commerce.

The administration issued a notice in June, requiring online shops to get business licences before August 1.

It defined online taxpayers as those shops with online registration based in Beijing and making profits through Internet sales.

Beijing's new regulation excepted those online shops selling or exchanging personal use items from the real-name business registration, said Wang.

China's e-commerce has been on a fast track in recent years. Leading e-commerce portal Taobao.com saw transactions rise to 43.3 billion yuan (6.3 billion U.S. dollars) in 2007.

The government's online business regulation, however, has been criticized by e-businesses.

Irritated shop owner nicknamed Duguqiubai said he would rather close his shop than get a business licence.

"Most online shops are small businesses that earn meagre profits. Taxes would devour our small profit margin," said the netizen, who has a shop on Taobao.com selling mobile phones and phone cards.

Another man, with the online name of Family at Lin'an, said that the regulation's deadline would be a deadline with real meaning for his family, whose sole income came from the online store he opened. He said he is a handicapped man, who has a little hope of being employed.

The administration official Wang said that the government has been fully aware of the Internet outcry, but would not make changes to the regulation.

"Online shops are after all private businesses. They should be treated equally with other private businesses," Wang said.

Professor Tao Hong, chairman of the research center of commerce under the Beijing University of Industry and Commercial, was in favor of the new regulation. He expected it to help clean the e-commerce market.

But other scholars like Kan Kaili, a professor with the Beijing University of Posts and Telecommunications, held the opposite view.

Kan said that the authority would have troubles to put the regulation into practice, since there are neither borders nor regions on the Internet. Online shops can easily change registration places to evade the regional regulation.

(Xinhua News Agency August 1, 2008)