China's technology regulator has rejected criticism of proposed Internet rules that could block access to foreign websites, saying there was misunderstanding about what some people see as a way to tighten control over cyberspace.

Experts have said the draft regulations, like many laws in China, could be interpreted broadly and, in extreme cases, could give authorities the power to shut off access to all websites that have not registered their web addresses in the country.

The Ministry of Industry and Information Technology said in its proposed revisions to domain name management regulations Chinese websites must use domestic domain registration services or risk being cut off in China and facing fines up to 30,000 yuan ($4,600).

"Internet service providers must not provide network access services for domain names connected to the domestic network but which are not managed by domestic domain name registration service bodies," the ministry said in a draft of the rules posted on its website.

The ministry told Reuters there was "misunderstanding" about the regulations which "did not fundamentally conflict" with global practices.

The rules "do not involve websites that are accessed overseas, do not affect users from accessing the related Internet content and do not affect the normal development of business for overseas companies in China," it said in an email.

Authorities often issue preliminary laws and regulations for comment though it is not clear if regulators will incorporate public feedback in final drafting. The ministry said it would "earnestly study" feedback.

Domain names are a crucial part of the Internet, guiding people to a specific web address, such as Google's search engine when they type in www.google.com.

Some of China's biggest websites including Alibaba Group Holding Ltd's Taobao and Tmall, Baidu Inc's search engine, JD.com Inc's shopping site and the Sohu.com Inc news portal are registered overseas, according to the www.whois.net site, which provides information on the registration of websites.

"We are closely examining the draft regulation and will provide appropriate input," a Baidu spokesman told Reuters.

A JD.com spokesman said the company was studying the draft but believed the rules would not have an impact on its business.

Alibaba and Sohu declined to comment.

'ADDITIONAL CHALLENGES'

China has long operated the world's most sophisticated online censorship mechanism, known as the Great Firewall. The websites for Google's services, Facebook and Twitter are all inaccessible in China.

Under President Xi Jinping, the government has implemented an unprecedented increase in Internet control, and sought to codify the policy within the law.

China's top Internet regulator, Lu Wei, has said the government is not being too restrictive. Officials say controls help maintain social stability and national security in the face of threats such as terrorism.

They have also suggested controls provide a good framework to nurture domestic Internet firms.

But experts say the rules would enhance China's ability to censor, and allow it to target sites that are hosted on Chinese servers but have registered their domain names overseas, where they cannot be completely shut down by Beijing.

"The draft rules aim to ensure that content hosted on Chinese servers is accessed through a domain name managed by a Chinese registration service provider," said Rogier Creemers, a lecturer in China's politics and history at the University of Oxford. "This points to an increased level of control."

Foreign business groups have criticized Internet restrictions as limiting opportunities for overseas firms and stifling innovation.

James Zimmerman, chairman of the American Chamber of Commerce in China, said the proposals were vague, ambiguous, subject to broad interpretation and would slow commerce and isolate China technologically.

"At a minimum, the regulations would create additional challenges for both foreign and domestic companies," he said in an email.

Some experts said the concerns were over-blown.

While the rules could allow the government to block all websites not registered in China, that would be an extreme interpretation, said Mareike Ohlberg, a research associate at the Mercator Institute for China Studies in Berlin.

"It is possible, but not very likely, that this would result in a de facto block of all domains not registered in China," Ohlberg said.