The offshore model

Fons Tuinstra, on his China Herald blog, has an interesting round-up of some of the commentary and issues surrouding the Yahoo/e-mail/journalist jailing story. There was some discussion about the role of Hong Kong in all this as, technically, under Hong Kong's "one country, two systems" formula, Chinese law enforcement officials have no authority to demand anything of businesses based in the Special Administrative Region.

This is cleared up in an update to Fons' post and one thing particularly caught my eye there:

...the servers of Yahoo's email service are actually hosted in Beijing. That would indeed offer Chinese judicial authorities a handle to demand cooperation. And it would indicate that hosting your servers in China might in this case be a less-than-smart idea.

For some years, a number of B2B magazine publishers have kept clear of the Chinese regulatory and legal minefields by adopting an 'offshore model', publishing in other places (usually Hong Kong) and mailing magazines into subscribers in China. It has some limitations but it still works even for publications as august as Fortune. As increasing numbers of B2B publishers look at going the on-line only route, it will be worth considering very seriously the risks and benefits of placing web servers within the borders of China.