Vviewpoints
DOI: 10.1145/1787234.1787245
emerging markets
has china
caught up in It?

ChInA Is emeRgIng as a new economic superpower, but is it also emerging as an IT superpower? Certainly it has gone a long way toward catching up and even leading in some fields. We can understand its “ tech-no-nationalism” as the foundation. But—as recent difficulties with Google illustrate—it must also address ongoing challenges before the superpower label can be applied.

understanding catch-up

IT infrastructure and services. When China started economic reform in the early 1980s, its information and communications infrastructure was weak. In 1980, the Chinese mainland had just four telephones per 1,000 citizens. In contrast, just over the border in Hong Kong—still a British colony at that time—there were approximately 460 phones per 1,000 citizens. 1 Even in the 1990s in Beijing, a two- to three-year wait was required to have a telephone line installed in a typical household. From that point, though, a combination of very strong demand, heavy state investment plus supply-side support from government to the monopoly supplier ensured a major change. The most recent figures indicate the number of fixed-line subscribers had reached more than 310 million; or 230 per 1,000 population. 7

The mobile telecommunications market has similarly gained rapid momentum since 2G digital systems were

internet users in china.

deployed in 1994. By 2001, China was already the world’s largest mobile telecommunications market. The latest figures show more than 640 million subscribers in 2008, and a 19% annual growth rate during the 2000s. 5 Contrast this with the U.S., which had 270 million subscribers and an 11% growth rate, or Japan with 110 million subscribers and a 5% growth rate. During this period, China’s mobile telecommunications networks upgraded to GPRS and EDGE, and are now adopting 3G technology. As Fortune 500-listed companies, the three operators own nationwide networks and provide value-added services,

mobile Internet connectivity, and the like.

China has also pushed ahead with national informatization programs initiated in 1994 with the creation of the National Information Infrastructure Steering Committee. This launched various “Golden” projects such as Golden Bridge, Golden Card, and Golden Customs, which have built a national platform for providing commercial Internet services, constructed a national credit card network, and linked customs points through a national EDI system, respectively. These are now just one small part of an overall drive for e-business, e-commerce, and e-government that has created more than 100 national information systems that provide a true “digital economy” infrastructure. Annual trade in China’s B2C market, for example, is now around $3 billion ( total e-commerce is approximately 100 times greater) and is growing at a rate of about 50% per year.

All of this has been built around a fast-growing e-infrastructure: by 2009, China had the world’s largest population of Internet users (more than 300 million) and the largest population of broadband users (more than 100 million). For a long time that population was restricted to large cities and coastal provinces. But the 2004 Village Access project ensured that, by 2007, 99.5% of all administrative villages were connected to the telecommunications infrastructure. 6