What Factors are Driving China's Mobile Diffusion?

Abstract

This paper identifies and analyses the forces influencing the rapid mobile diffusion in China. The analysis indicates that major factors influencing the hyperbolic growth rate of mobile technology penetration in China include the influence of Marxist labour theory, post-Mao reform resulting in market openness and heavy FDI inflow, rapid economic growth, reengineering of the telecommunication sector leading to fierce competition, China's interest in WTO membership and the development in mobile technologies. Some of the causes are unique to mobile diffusion while others are also applicable to telecom diffusion and ICT diffusion in general. The causes are highly interactive and hence their impact on mobile diffusion cannot be individually analysed and assessed. As a consequence, it is difficult to copy the Chinese examples in other developing countries. Some 'exportable' factors that influence rapid mobile diffusion in China include heavy investment in the telecom sector, government initiatives to encourage people to buy mobile phones and intense competition in, and reengineering of, the telecom sector.