The cost of a permit to run an Internet cafe in Shanghai
rocketed past 1 million yuan (US$132,000) on the black market in
the wake of the government's decision earlier this year to stop
issuing business licenses to new operators.
The authorities regard the black market trade of such permits as
illegal, but admitted that it would be difficult to stop people
from selling them because it would be difficult to trace such
An Internet cafe in downtown Xujiahui was selling for 1.5
million yuan, according to a report by the Shanghai Morning
Post. The online advertisement said the price included 100
computers and a business license.
Deducting the cost of the computers, the license itself is worth
1.2 million yuan.
An Internet search for Internet cafe business license
transactions uncovered numerous price tags of about 1 million
The soaring prices are widely seen as a consequence of the
government's efforts to tighten control over an industry in which
there have been numerous reports of operators allowing underage
people to use the Internet and neglecting public safety. Parents
and teachers have complained about students skipping classes to
play games at Internet cafes day and night.
And in 2002, a fire in an Internet cafe killed 25 people and
injured 13. Many of them were students. The authorities decided to
tighten supervision of the industry and that same year, the
Shanghai municipal administration of culture, radio, film and TV
stopped issuing new licenses. Before that, individuals were able to
get a license for as little as a few dozen yuan.
People who wish to enter the trade can join a franchised
Internet cafe operator for a fee, but the high cost drives many
Yang, a Shanghai Internet caf operator, said he had sold his
business about four years ago for 350,000 yuan. His successor
picked up more than 500,000 yuan when he resold the business last
"It could be worth more than a million now," Yang said.
It is easy to arrange such a transaction. The two parties only
need arrange the sale of the business, and the license changes
hands along with it, he explained.
His successor said he was simply reacting to the market.
"You just don't say how much you bought the business for," he
(China Daily July 23, 2007)