According to the relevant laws and regulations, the use of UPN is not definitely illegal, but it is illegal to provide VPN services without the approval of the competent authority.
In China, according to the Classification Catalog of Telecommunication Services, VPN, i.e. the Virtue Privat Network is a kind of value-added telecommunication services and refers to the customized Internet closed user group network services provided for domestic users by adopting the TCP/IP protocol and using the self-owned or leased Internet network resources of operators. An Internet virtual private network mainly adopts IP tunnels based on TCP/IP technology and provides a certain degree of security and confidentiality. Encrypted transparent packet transmission can be realized in a private network. According to Article 9 paragraph 2 of the Telecommunications Regulations of the People’s Republic of China, “The operation of value-added telecommunications services covering an area across two or more provinces, autonomous regions and/or municipalities directly under the central government shall require the examination and approval of the State Council’s department in charge of the information industry and the obtaining of a Cross-regional Value-added Telecommunications Service Operating Permit. The operation of value-added telecommunications services covering an area within one province, autonomous region or municipality directly under the central government shall require the examination and approval of the telecommunications administration authority of the said province, autonomous region or municipality directly under the central government and the obtaining of a Value-added Telecommunications Service Operating Permit.” Any action of counterfeiting or assigning a telecommunications service operating permit, or any operation of telecommunications business without authorization or any operation beyond approved scope shall face punishments including fine, forfeiture of illegal income or other type of punishments ordered by telecommunications authorities.
The reason why China controls VPN business is that there are many unstable factors in VPN service itself, and such unstable factors will bring troubles and safety risks to citizens and the State. Through surveillance, European scholars have found that hackers can easily collect unencrypted information from users through VPN, and some scholars have redirected users’ browsers to a controlled web server by disguising popular sites like Google or Facebook and found out that 11 of the 14 internet content providers have the problems on disclosure of user’s information including the information on visited sites and the actual content of the user’s communication. Research shows that even if a well-configured VPN is used, there will be various ways to identify the user, thereby infringing on the privacy of the user. In addition to the risk of invasion of privacy, the leakage of internet information can trigger a threat to the internet sovereignty of a State. China’s sense of sovereignty over cyberspace is clearly reflected in the White Paper “the Status of the Internet in China” published in June 2010. Chinese government holds that the Internet is an important infrastructure of the State, and that the internet within the people’s Republic of China is within the jurisdiction of China’s sovereignty, and China’s sovereignty over the Internet should be respected and safeguarded. In his keynote speech at the opening ceremony of the second World Internet Congress on December 16, 2015, President Xi Jinping also mentioned that the reform of the global Internet governance system should adhere to respect for the sovereignty of the network and respect for the independent choice of each country for choosing the path of development of the network, the network management model, the internet public policy and the equal right to participate in international cyberspace governance. Do not engage in network hegemony, do not interfere in the internal affairs of other countries, do not engage in, condone or support any network activities that endanger the national security of other countries. Therefore, in recent two years, by issuing the Circular on Clearing up and Regulating the Internet Access Service Market and the Circular on Further Promotion on Clearing up and Regulating the Internet Access Service Market, the Ministry of Industry and Information Technology focuses on cracking down on the service providers who illegally engage in VPN business in China without approval, the purpose of which is mainly to strengthen the management of internet information security and reduce the potential dangers of network and information security faced by the users and the country.