According to this BBC story, the Chinse government got tired of waiting for ICANN to approve top level domains in non-Roman characters and rolled their own for use in China, using a combination of client-side software, domain name translation by ISPs, and other hacks to make it work.

With 110 million people online, China is already the second largest net-using nation on Earth.

Big push for Chinese net domains, By Mark Ward, Technology Correspondent, BBC News website

And most of the other 900 million people in China don’t use English, so Chinese language domain names make a lot of sense in China, and China has proceeded to implement them. This is not news to people who follow domain name implementations, and the new Chinese domains were mentioned in the Wall Street Journal in January 2006.

So the legendary recalcitrance of ICANN to move ahead with top level domains has led to the world’s largest country going ahead anyway, in order to promote their domestic economy.

Chinese domain names will no doubt occasionally leak out of China, e.g., on business cards and in signatures of electronic mail messages, leading to confusion. But that’s a relatively small risk compared to a major nation being impeded in its use of the Internet. If you see domain names ending in .zhongguo, .gongsi, or .wangluo in Chinese characters, you’re probably seeing such a leak. (I take the first of these names to be the Chinese name for China; can someone tell me what the other two are?) Note that .zhongguo.cn, .gongsi.cn, and .wangluo.cn already exist under the .CN top level domain, so if you see those, you’re not seeing a leak.

Commercial companies may want to consider that if they don’t deliver what the customers want, somebody else probably will, and on the Internet the somebody else may be in a different company in a different legal regime that won’t be impressed by patent thickets or trademarks.

-jsq