Since Xi Jinping became China's president that year, the U.S. had
not listed China's so-called Great Firewall as a trade impediment
despite widespread outcry that the online blocks limit access to
crucial information, email and search services such as those found
on Google's platform.
"Outright blocking of websites appears to have worsened over the
past year, with eight of the top 25 most trafficked global sites now
blocked in China," the U.S. Trade Representative wrote in its annual
report on foreign trader barriers.
"Over the past decade, China's filtering of cross-border internet
traffic has posed a significant burden to foreign suppliers, hurting
both internet sites themselves, and users who often depend on them
for their business," the USTR said in the report, released last
week.
The move could push the issue beyond a sticking point in bilateral
ties over human rights and security, though with a litany of trade
disputes already on the table, the degree to which it will feature
in talks remains to be seen.
China has long operated the world's most sophisticated online
censorship mechanism known as the Great Firewall.

The websites for Google's <GOOGL.O> services, Facebook <FB.O> and
Twitter <TWTR.N> are all inaccessible in China. Officials say web
controls help maintain social stability and national security in the
face of threats such as terrorism.
Under Xi, the government has implemented an unprecedented tightening
of internet controls, and sought to codify the policy within the
law.
According to data from the anti-censorship group GreatFire.org,
almost a quarter of the hundreds of thousands of web pages, domains,
encrypted sites, online searches and IP addresses that it monitors
in China were blocked as of early April.
That was up from 14 percent at the time Xi assumed the presidency.
Chinese Foreign Ministry spokesman Hong Lei told a regular briefing
on Friday that a country's independent choice for internet
governance should be respected.
"China's internet is vigorously expanding and providing vast space
for companies from other countries to grow," Hong said. "China's
policy to attract foreign investment will not change."
The Cyberspace Administration of China did not immediately respond
to faxed questions, while the Ministry of Commerce declined to
comment.
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Foreign business lobbies have long complained that Chinese internet
restrictions go beyond inconvenience and actually limit business
competitiveness.
The American Chamber of Commerce in China said in its most recent
report on China's business environment that its members faced
"severe challenges competing in China's telecommunications and
internet sectors due to investment restrictions, security controls
and a range of protectionist measures".
The lobby's 2016 business climate survey showed 79 percent of its
members reported a negative impact on business due to internet
censorship.
The USTR report said much of what China blocked online did not seem
to fall within the realm of what was necessary to maintain social
stability and national security.
"Much of the blocking appears arbitrary. For example, a major home
improvement site in the United States, which would appear wholly
innocuous, is typical of sites likely swept up by the Great
Firewall," it said.
(Additional reporting by Jessica Macy Yu and Beijing Newsroom;
Editing by John Ruwitch and Ryan Woo)
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