From PCWorld.com (link):
Western media was abuzz Wednesday with reports, citing an English-language story on the Web site of the official People’s Daily newspaper, that China plans to create a set of Chinese-language domain names as part of a bid to split China off from the Internet. There was just one problem: the story wasn’t true.
The China Internet Network Information Center (CNNIC) has had a system of three Chinese-character domain names in place since 2002. The domain names, which appear to be top-level domain names, actually operate under the .cn top-level domain name, which is also administered by CNNIC and is part of the domain-name system (DNS) managed by the Internet Corporation for Assigned Names and Numbers (ICANN).
A CNNIC spokeswoman Wednesday confirmed that there are no new additions to the available Chinese-character domain names and said no major changes are planned for how China administers the Internet.