Chinese government threatens growth for Renren and Youku (The Paragon Report)

NEW YORK, NY, Oct 13, 2011 – As market shares continue to grow, companies within China’s internet sector have been posting record numbers this year. China’s online population is already the world’s largest, with millions of Chinese users trying the internet for the first time each month. The growing internet population has become a slight headache for the Chinese Government, however, and there are concerns heightened regulation could slow growth.

The Paragon Report examines investing opportunities in China’s Internet Sector and provides equity research on Renren, Inc. and Youku.com, Inc.

Several Chinese internet firms could be in for greater government scrutiny as Beijing officials are vowing to punish people who post rumours and falsehoods on the Internet.

Users in China must “abide by the law, show self-discipline and refrain from spreading rumors,” the spokesman for the State Council’s State Internet Information Office said, according to Xinhua News Agency.

Social media sites that are platforms for users to generate content are posing a challenge for China’s authoritarian government, which is used to controlling what media tell people. The government has begun issuing warnings about speech on the internet and the need for companies to remove “rumors” and “false news,” which are widely seen as code words for criticism.

Additionally, China’s Commerce Minister recently said the government was looking to regulate corporate investment structures that enable domestic companies to list on overseas markets, as China looks to reign in variable structures that allow foreign investors to tap into cash flow from Chinese companies where investment is restricted.

Access to the full company reports can be found at:
www.paragonreport.com/RENN
www.paragonreport.com/YOKU

SOURCE: Paragon Financial Limited (13/10/2011)

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