China's Lifting Ban On Facebook (FB) And Twitter In Shanghai Free Trade Zone (FTZ) Unlikely To Spread To The Rest Of The Nation, Analysts And Netizens Say

China is lifting its ban on Facebook (NASDAQ:FB), Twitter and the New York Times (NYSE:NYT), among other politically sensitive media websites, in the Shanghai Free Trade Zone, but can the rest of the 600 million Chinese Internet users hope to enjoy freer media soon?

Not likely, unfortunately.

Analysts expect the government to tighten access at the first sign of social instability caused by the free access in the pilot zone. And judging from Weibo reactions, Chinese netizens are mostly unimpressed by an easing of restrictions that they see as primarily benefiting foreigners. Only about 5 million Chinese, at most, will gain access to the sites under the new rules.

The Shanghai FTZ, the first such free trade zone in mainland China, is designed to attract foreign investment and open a yuan-denominated financial sector to the rest of the world. To accommodate this objective, China has decided to make available media outlets and social networks banned in the rest of the country.

The government is also welcoming foreign telecommunications companies' bids for Internet service provider licenses within the zone. Foreign firms could eventually compete with the three biggest state-backed telecom companies on the mainland – China Mobile, China Unicom and China Telecom.

But the uncensored Internet privilege is unlikely to mean China will move to ease access restrictions for rest of China, Nomura analysts said in a research note. They added that the opening to Western firms won't threaten Chinese companies, since the pilot zone is just too small to move the needle.

“This access should not be seen as a precursor to the Chinese government potentially loosening its control on social media in China – we believe that the Chinese government could quickly take adverse actions should there be any social instability caused by the granting of access to foreign websites in the pilot zone,” the Nomura note said.

The South China Morning Post of Hong Kong posted the news on Weibo, China's Twitter-like microblogging platform. Chinese netizens reacted mostly unfavorably.

Shanghai's Pudong district, the region where the change is coming, has about 5 million residents, so by far most of China's 600 million Internet users will continue to be hemmed in by the Great Firewall of China.

"Residents of Beijing send their congratulations, but want the same privilege," one Weibo user, @徐昕 commented on the post.

"We Chinese have hoped for the lift for such a long time, but it turned out to be a publicity stunt catering to foreigners, how ironic," another, @雅堃 commented.

"One city, two policies. No dogs or Chinese allowed," @张桨 wrote, referring to an infamous sign that supposedly hung outside Shanghai's Huangpu Park, which was closed to Chinese during Western occupation in the early 1900s.