The Internet Revolution in China

Abstract

MOST CHINESE HAD NOT HEARD OF THE INTERNET before the mid-1990s; many are now rushing to embrace cyberspace. Internet service providers (ISPs) and internet content providers (ICPs) are mushrooming. Chinese are among the world's most active internet users, and internet growth rates are among the highest in the world. By the end of 2000 there were 265,000 websites and 22.5 million internet users in China.(1) If present trends continue, within five years China will have more users than the United States. The growing numbers have been seen as a potential gold mine in a population of about 1:3 billion customers and have attracted the attention of global investors in information technology fields.DEVELOPMENTSChina's computer market grew by more than 40 per cent per year after 1994 (except for a temporary decline in 1998).(2) In 1999, personal computer (PC) sales increased by 25.6 per cent to a total of 4.94 million PCs.(3) In 2000, 6.5 million PCs were sold on the domestic market.(4) By 30 June 2000, 6.5 million computers were logged on to the internet.(5) The world's fifth largest market for PCs and one of the most important PC manufacturers and exporters, China is set to become the world's largest PC consumer, manufacturer, and exporter.(6)According to government figures, the online population doubled in the first six months of 1999 from two million to four million, more than doubled by the end of the year to 8.9 million and nearly doubled again to 17 million in the first half of 2000.(7) Given that many Chinese share accounts to defray high line fees and other costs, the number of people using the internet in China may be between 67 million and 89 million. In addition, many people do not have internet access from home, but free e-mail boxes, most of which are unregistered, are easy to obtain in workplaces and elsewhere. The former president of the United States, Bill Clinton, may not have been far off the mark when he said that 'when over 100 million people in China can get on the Net, it will be impossible to maintain a closed political and economic society.'(8)The online population will continue to increase. A domestic prediction puts the number of internet users at 62 million in 2001 and 80 million by 2002. Overseas predictions are even more optimistic. One suggests that there could be 374 million users in China and that China will become the largest internet market in the world by the end of 2005.(9)Between June and December 1999, the number of websites in China rose from 9,906 to 15,153.(10) The winners of a competition for the country's top ten internet leaders and 100 best websites in ten categories were announced in January 2000.(11) In 1999, Sina, the top ISP, provided integrated online services to 5.5 million viewers per day and half a million frequent web users. Sohu, one of China's most successful websites, received an average of 2.7 million hits a day.(12)Online government projects are another important aspect of China's internet development. The government encourages various ministries and provinces to take the lead in developing information technology infrastructure and establishing websites to provide information and to help develop e-commerce. Both the central and the provincial governments have made much progress in building their internet networks. By the end of 1999, 68 state-level departments or 60 per cent of government agencies had their own websites. China hoped to have 80 per cent of its central and local government institutions on-line by the end of 2000, and it came close to meeting its target.(13) Most ministries now provide at least basic information about their functions on line. For example, in addition to statements by the government on Chinese foreign policy and government officials' remarks, the Ministry of Foreign Affairs website lists the names of various department heads. Even this basic information was previously available to ordinary people only with difficulty because of blocking communist bureaucrats. …