According to the “2010 China Internet Cafe Market Report” released by the Ministry of Culture on March 17 2011, more than 130 thousand unlicensed Internet cafes had been shut down in the past six years.
Apart from cracking down illegal cafes, the government has also introduced new regulations and imposed harsh penalty to wipe small scale Internet cafes out of business so as to create space for large Internet cafe chains.
As a result of the brutal market adjustment, the market size of Internet Cafe shrunk significantly by 12.96% from RMB88.6 billion in 2009 to RMB 77.12 billion in 2010, a decrease of more than RMB10 billion in term of cash value.
The total number of Internet cafe in 2010 is 144 thousands with 14.28 million computer terminals. 30% of the Internet cafe is run by franchise chains. (via people.com [zh]) The promotion of franchise is to facilitate the implementation of real name registration in Internet cafes: customers are requested to register their ID information before going online. In addition, minors are forbidden to enter Internet cafes.
In 2011, the ministry vows to extend the crackdown of illegal Internet cafes from urban to rural areas.
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