China’s Ministry of Industry and Information Technology has blamed foreign media for the confusion surrounding a cryptically-written new regulation pertaining to Internet domain names.

The regulation stipulates that domain names with access to China should be provided by domestic registration services owned and operated by Chinese institutions. In other words, if you’re a foreign service provider, you can’t offer a domain name with access to China. Any person or business caught in violation of the regulation faces fines of up to RMB 30,000 (over $4,600).

The Ministry has since clarified that the proposed rules do not involve websites that are accessed overseas. “There is no fundamental conflict between the new draft and the global domain name regulation system,” said the Ministry.

Much of the controversy revolves around article 37 of the draft, which reads in part:

For domain names engaging in network access within the borders, but which are not managed by domestic domain name registration service bodies, Internet access service providers may not provide network access services.

According to the Ministry’s “clarification”, the new Chinese Internet law will be used to block non-complying foreign websites operating in China. Or, as Fang Binxing, an expert on network information security at the Chinese Academy of Engineering explained in a recent Global Times report: “what you use in China must be registered to Chinese institutions”.

Fang believes the regulation will enhance Internet management, as a website can be blocked “when one stops its name server from providing service for it”. As such, authorities advise foreign companies in China to transfer their website domain names to Chinese registers in order to comply with the new rule.

The People’s Daily Online reported the media fuss was much ado about nothing:  “The media, especially the foreign ones, interpreted this article as an effort to completely block foreign websites from China.”

One interpretation of the draft regulation is that China wants to fully control the domain name “.cn”, typically used for high-level official government websites. As Tech in Asia writes:

Even this slightly more optimistic take would wreak havoc on any .cn domain provider not based in the mainland. For example, the world’s biggest domain supplier, GoDaddy, sells .cn domains throughout Asia, especially in Hong Kong and Singapore, but does not actually operate in mainland China. This law could mean that those .cn domains would need to be switched over to domestic Chinese hosts – lest they be blocked by the Great Firewall, which could identify their foreign IP addresses.