The production, import and supply of devices that are capable of evading or breaching technical measures of copyright protection and technical services are prohibited under the regulation.
The regulation was drawn up on the principle that it must balance the interests of copyright owners, Internet service providers and users of the copyrighted works, said an official with the Legal Affairs Office of the State Council.
It prohibits the intentional evasion or breach of technical measures to prevent copyright violations. The production, import and supply of devices capable of evading or breaching technical measures of copyright protection and technical services are also banned.
Violations of copyright through the Internet usually involved relatively small sums of money, so the regulation had adopted the international practice of "notice and delete" to handle disputes, the official said.
Deletion or change of digital material were prohibited under the regulation.
Copyright owners could send those breaching copyright a written notice and ask Internet providers to delete their works or links to their works, the regulations said.
Internet providers should delete the content and links upon receiving the written notice from the copyright holders.
The new regulation provides for a fine up to 100,000 yuan (12,500 U.S. dollars) and confiscation of computer equipment for those who breach copyright.
China is the world's second-largest Internet market after the United States with more than 110 million users.
Last September, baidu.com, a leading Chinese search engine, was successfully sued by a Chinese music firm for 68,000 yuan (8,400 U.S. dollars) because baidu's search function violated the Shanghai-based company's copyright. Last month, a technology company developing MP3 download software, Kuro, was sued in the first case involving P2P (peer to peer) downloading in China.