The world reacts really fast if something happens in China or if that is related to its internet activities. The international press recently went Jego_Chinese_messaging_appberserk over the news that the Chinese Government is relaxing its clutches over the social networking sites in Shanghai’s free-trade zone. Reported by South China Morning Post (h/t Tech In Asia) on Tuesday stated that China will lift its ban on sensitive international websites like Facebook, Twitter, and the New York Times within the perimeters of Shanghai’s free-trade zone.

The news that was backed by the “government sources” and endorsed by one of the top leaders Li Keqiang, has been reported as false by People’s Daily (h/t Tech In Asia). Chinese officials have stated to the news daily that the news reports of unblocking sites were “incorrect” and that there would be no changes to the existing internet policy in the free trade zone.

Considering the People’s Daily to be the prominent mouth piece of the ruling communist government, one can be assured that there is no change in stance as long as accessing Facebook and Twitter, which were blocked by Beijing in mid-2009 following deadly riots in the western province of Xinjiang that authorities say were encouraged by the social networking sites. New York Times also got blocked after it reported last year that the family of then-Premier Wen Jiabao had amassed a huge fortune.

The Shanghai Free Trade Area was launched by the end of August with a total area of ​​28.78 square kilometers area and is located in Shanghai Pudong New Area. The trade zone approved by the State Council has been created to attract more foreign investment, foreign exchange and interest rates that further promote the liberalization of the Mainland to facilitate capital flows.

The unblocking of sites in the free zone was to make foreigners “feel like at home” and could have sent positive signals to the international community but that isn’t happening for now. This has also upset the prospects of China’s three biggest telecoms companies – China Mobile, China Unicom and China Telecom, who have been informed of the decision to allow foreign competition in the free trade zone to bid for regional Internet service license.

So it remains to be seen if in future there would be any chances for such relaxation since the decision had been endorsed by Chinese leadership including Premier Li Keqiang, who has backed the Shanghai free trade zone. But considering the stance the present government is developing for social networking sites and activities it is very unlikely.

According to a judicial interpretation issued by China’s top court and prosecutor, people will be charged with defamation if online rumours they create are visited by 5,000 Internet users or reposted more than 500 times. Though the government may deny rampant internet censorship but it is anyway evident to the entire world.