Those portals have not won as much acceptance as private-sector portals funded by the likes of Intel and Softbank. So Wu tried to get the foreigners kicked out, which would help his portals compete. The tentative World Trade Organization deal between Washington and Beijing diminished the impact of Wu's threat, since it seems that foreigners will be allowed in after all. With that tool gone, the conservatives need a new weapon to scare away foreign investors. Bluster about the Net as a threat to state secrets may turn out to be that weapon.
History argues against getting too worried about the latest moves, though.
China periodically tries to impose restrictions on industries it doesn't trust. Usually, people pay lip service to the rules for a while, and then ignore them. The same thing may happen again. Einhorn is Asia technology correspondent for Business Week. The McGraw-Hill Companies Inc. All rights reserved.