All sites offering video content will have to be licensed from 31 January and controlled by the state, according to new regulations from the State Administration of Radio, Film, and Television.
"Those applying for internet audio-visual service [licences] must at the same time be solely state-owned enterprises or enterprises whose shares are controlled by the state," the notice said.
"Those who provide internet video services should insist on serving the people, serving socialism and abiding by the moral code of socialism."
The regulations are an attempt to clamp down on the use of such sites to display media that is not controlled.
The move will cause consternation among Western companies such as Google, which owns YouTube, that have cooperated with the authorities on censoring internet information.
This is not the first time that the Chinese have taken sweeping steps in censorship. In 2005 Wikipedia was blocked for over a year and even now some information on the site remains unavailable.
Governments around the world are growing increasingly concerned at the activities of Western companies in aiding censorship, particularly in China.
The Chinese state employs thousands of people as web censors, and companies such as Cisco, Microsoft, Google and Yahoo have been named as helping in this process.
Yahoo recently settled a civil suit after it passed on the personal details of a Chinese blogger to the police. The man, Shi Tao, is now serving 10 years in a Chinese prison for criticising the state.
Google has already agreed to censor its search engine results for its Chinese portal, a decision co-founder Sergey Brin has said he regrets.
However, if YouTube is blocked it may cause a rethink by the company.
China clamps down on video sites
By Iain Thomson on Jan 7, 2008 2:05PM