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China restricts registration of .cn names

The China Internet Network Information Center (CNNIC) announced new rules a few days ago that are intended to "enhance the authenticity, accuracy, and integrality [sic] of the domain name registration information."
These rules require applicants for .cn domain names to submit copies of their business license and personal ID for review by the registrar within five days of registering the name. There are two big questions that aren't clear from the announcement:
First, does the requirement to submit a business license apply only to registrations on behalf of businesses, or does this mean that individuals are no longer allowed to register .cn domain names? The latter would be a substantial restriction on the Internet privileges of individuals in the country.
Second, what happens between the time an online registration occurs and the end of the five day period? Is the domain active during this time, or does the domain not become active until after the paperwork is reviewed? The exact language is "From the day of the submission of online application, if CNNIC does not receive the formal paper based application material within 5 days or the application material auditing is not qualified, the domain name to be applied will be deleted." This implies that someone can sign up for a domain name with fake information, use it for five days, and then have the name revoked. I suppose that's better than being able to use a fake domain indefinitely (sort of - it may make tracking down the perpetrator more difficult), but we've seen with domain tasting that this can be abused for creating ephemeral phishing and malware sites.
Underlying all of this, of course, is a long-running battle between privacy advocates who argue that being able to anonymously register a domain name extends the free speech opportunities, especially for dissidents in repressive regimes, and the security and law enforcement communities, which fret about the lack of accountability if the operator of a domain name cannot be tracked down. I'm not sure whether ICANN's requirement for registrars to disable domains with false registrant information applies to country-level TLDs, but the CNNIC policy for .cn domains would certainly be consistent with that requirement, if more heavy-handed than we've seen from most registrars.
[Update 12/18: Berkman Center Fellow Donnie (Hao Dong) posted this piece explaining even more aggressive measures being taken by the Chinese government to crack down on malicious use of domain registrations. This will almost certainly reduce the number of misused Chinese domain names, but as indicated above, we may see some additional consequences.