Online businesses which make a profit in Beijing are subject to the government's business-licence regulation from today, making the 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 shops with online registration based in Beijing and making profits through Internet sales.

Beijing's new regulation excepted 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 (US$6.3 billion) last year.

The new regulation has angered some e-businesses.

One 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 sells mobile phones and phone cards on Taobao.com.

Another man, with the online name of Family at Lin'an, said the regulation's deadline would be a deadline with real meaning for his family, whose sole income came from the online store he opened.

Wang said the government was fully aware of the objections, but would not change 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 Commerce, said he expected the new regulation would help clean up the e-commerce market.

But Kan Kaili, a professor with the Beijing University of Posts and Telecommunications, said the authority would have trouble putting 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)