On Dec. 15, Hong Kong's South China Morning Post reported that China's rulers were scaling back efforts to control local access to the Internet. Despite years of hard-line rhetoric and threats to block access to politically (and pornographically) controversial Web sites, as well as monitor personal e-mail and bulletin board communication, the commissars, said the Post, were finally facing up to Net reality: Controlling the Internet is a fool's errand -- it's too costly, too time-consuming and just too damn hard.

Techno-libertarians everywhere no doubt rejoiced at the news from Hong Kong. The conceit that the Internet will demolish bureaucracies of all kinds -- from the IRS to the worst despotic dictatorship -- is, after all, a digital revolutionary's most cherished fantasy. According to Hong Kong's premier English-language newspaper, the mighty People's Republic of China had been caught in the act -- kow-towing to the inexorable power of the Net.

Or had it? Just two weeks later, a different meme swept through the world's media. On Dec. 30, China's Ministry of Public Security released "sweeping new controls" criminalizing a wide array of Internet uses -- everything from "making falsehoods or distorting the truth" to "promoting feudal superstitions," "leaking state secrets" and "injuring the reputation of state organs." Far from acknowledging defeat in the face of the all-conquering Net, these regulations, the most detailed yet announced in China, appeared to signal a renewed determination to combat digital pollution.

Less than a week after the release of the new regulations, local authorities at a major Chinese university shut down an Internet bulletin board, to the outrage of many students. Evidently, in the ongoing showdown of China vs. the Net, it's a bit too soon to declare a winner. But the fight promises to be well worth watching. The Internet is no longer an exotic oddity in China; it's a major focus for commerce as well as a flash point for intellectual debate. And, as is the case everywhere, it is growing fast.

The most obvious place to grade Internet progress in China is with regard to the basic quality of Internet connectivity itself. Long gone are the days just three or four years ago when the vast majority of China's Internet bandwidth was funneled through a relatively tiny connection at Beijing's Institute of High Energy Physics (IHEP). In those days, it was considered extremely bad form even to send casual e-mail to the few thousands of Chinese who had Internet accounts. The problem wasn't political but financial: Recipients of e-mail often had to pay disproportionately huge sums for each arriving message.

Today, depending on whose estimate one believes, anywhere from 200,000 to 600,000 Chinese enjoy some form of Internet access. Cybercafes have sprouted up in Shanghai and Beijing, and at least four major gateways now connect China's main internal networks to the outside world. In November, AT&T announced plans to install a whopping 45-megabit-per second T-3 connection in Shanghai, a feat one reporter estimated would increase China's overall Internet bandwidth 20-fold.

And AT&T isn't the only foreign corporation rushing to build the Internet in China. Nearly every major Internet infrastructure company has a significant presence in the People's Republic. Sun Microsystems and Bay Networks are busy constructing a high profile national intranet -- the so-called China Wide Web. Cisco, Netscape, Rupert Murdoch's News Corporation and even Yahoo are all busy with plans for Middle Kingdom expansion.

All that infrastructure building has an undeniable momentum. The bigger the network, the harder it is to clamp down upon. As Xu Rongsheng, deputy director of IHEP, says, "There is almost no way to control it anymore. If people want to find a bad address, they will."

The Ministry of Posts and Telecommunications, which dominates the local Internet access industry through its state-subsidized ChinaNet backbone provider, does attempt to filter out access to objectionable sites -- such as those that contain information on Tibetan human rights or Taiwanese independence. But Chinese dissidents and the foreign business community alike are unanimously scornful of the technological enforcement measures currently in place.

"I am online roughly four to five hours every day and never have trouble accessing information I need," says Kenneth Farrall, an Internet consultant employed by a Chinese information technology company. "I wake up every morning to a strong cup of coffee and NPR over RealAudio. When I have to access a site that is blocked (Nando News, China News Digest, Geocities), I pop one of a handful of overseas proxies into Netscape's networking options and continue surfing without missing a beat. The practice of using proxies to bypass site blocking is well known among the user community here. The blocked site list serves no other purpose than to satisfy the techno-illiterate old guard that the Internet is controllable and not to be feared."

Controlling the dispersal of information via e-mail is an ever more gnarly technical problem. Although one Internet specialist familiar with the Chinese telecom industry speculated that it would be possible to monitor incoming and outgoing data via computerized keyword searches at the major gateways, there is no evidence that such monitoring is in place, or even likely to be considered.

Overseas Chinese have embraced the concept of Internet-distributed newsletters since as far back as the ill-fated Chinese democracy movement of 1989. But in the last year, there's been a boomlet of dissident journals mailed directly to subscribers in China. E-mail inquiries to one such journal, Da Cankao (awkwardly translated as VIP Reference), automatically generate a defiant response:

"We are Internet experts, and above that, we like the concept of freedom of speech. We are destined to destroy the Chinese system of censorship over the Internet. We believe that the Chinese people, like any other people in the world, deserve the rights of knowledge and the rights of free expression."

Internet dissidence has been aided, suggests one local observer, by the fact that Chinese government attempts to control the Net (in comparison to those of, say Singapore) have always been "half-hearted" anyway -- and hamstrung by turf wars between various public agencies.

"As for whether all the different self-interested, non-cooperative, Balkanized Chinese organizations and entities involved with the Internet could ever get together to control the Internet, I don't think so," says Michael Robinson, an Internet specialist based in Beijing.

Robinson says internal infighting has prevented the operators of the various regional networks, or backbones, in China from agreeing on a central administrative authority -- thus resulting in the absurdity that traffic between different Chinese networks often is routed all the way to the United States before returning across the Pacific and arriving at its intended destination.

The new restrictions on Internet use got painted in the press as a tough crackdown -- but they only underscore the unlikelihood that China will ever achieve effective technological control of the Internet. The new rules say nothing at all about technological means of enforcement; instead, they merely note what is forbidden and list punishments for those caught breaking the rules. Perhaps, having acknowledged the impracticality of preemptively blocking the outside world, Party authorities are reverting to a familiar fall-back position -- repression.

Such a strategy jibes well with the times, says Geremie Barme, an Australian academic who has written a number of books on China (and a major article on China and the Net in the June 1997 Wired). The willingness of the Chinese citizenry to modify their behavior in the face of authoritarian threats "serves the authorities better today than at many other times in that country's history," says Barme. "The hint of repression, or even its possibility, leads to a complex and stifling reaction in the individual."

The closure, in the first week of January, of the bulletin board system at Zhejiang University in Shanghai (considered by many Chinese to be the "Princeton of the East") offers a perfect example of such a reaction. After what one participant described as "trivial" complaints about university administration were posted on the Internet-accessible BBS, the administrators shut down access temporarily and demanded that all participants re-register after proving their student status in person.

An editor at VIP Reference theorized that the university administrators were being mindful of the clause in the new regulations that requires network administrators to monitor and be responsible for all bulletin board system communication. Better safe than sorry.

The new directives give such administrators a concrete basis for action. And, intriguingly, to some Western observers, that in itself is a cause for optimism. Traditionally, official policy in China has been impenetrable to public scrutiny.

"The new regulations don't signal any significant change," says a Western diplomat based in Beijing, "[But] getting the rules down in black and white might even be called a kind of progress."

In March 1997 alone, noted the diplomat, China's official legal code grew by nearly a third. The expansion, in his view, is a sign that China is evolving into a society ruled more by law than by fiat.

Robinson agrees. "The new regulations should be seen as part of the ongoing process by the Chinese government to build a modern legal framework," he says, "where the judicial process is based on explicit, transparent and uniform laws, as opposed to the traditional 'anything we don't like is illegal' Chinese judicial system."

Kenneth Farrall, the Internet consultant, goes further: He sees the new regulations as paving the way for even greater freedom.

"Rather than representing a new level of control and restrictions on the Internet here," says Farrall, "these new regulations are being released in anticipation of a loosening of restrictions on the Internet industry here. Among the positive developments this year will be cheaper access fees, competition and the strong possibility that Western companies will be allowed entrance into the ISP market in a few test cities."

"In Beijing," argues Farrall, "the government is growing increasingly aware that if China is to be economically competitive in the next decade it must be wired. The central government has much more to fear from growing labor unrest than it does from cyberspace."

Which puts things in perspective, if one recalls the thesis that the spread of the Internet is bound to threaten the power of the Chinese state. As Robinson observes, "People with Internet access in China are doing very well for themselves under the current government, and they have nothing to gain by rocking the boat. The real threat facing the government are the hundreds of millions of poor, rural, uneducated peasants who would be left behind by an information economy."

Internet enthusiasts watching China can amuse themselves by balancing such incidents as the closure of a BBS in Shanghai with the ease with which Chinese residents can access pornography or the collected essays of democracy activist Wei Jingsheng. But Robinson's point shouldn't be ignored. In the larger context of Chinese reality, the Internet is still a bit player. Six hundred thousand people with e-mail hardly adds up in a country of 1.3 billion where the overwhelming majority of citizens still do not own phones.