China Joins Internet Service Party
BEIJING --- According to a major official report on growth and usage of the Internet in China released in Beijing this month, the number of Internet users on the mainland reached 4 million by the end of June 1999, up from 2.9 million at the end of 1998. Given the generally young, male and affluent profile of Internet users in China, this represents significant penetration into a premium demographic.
More importantly, it shows the explosive growth of new media on a national basis and reveals the information on which China's leaders will base their next strategic decisions.
The document - Reports and Statistics of China's Internet Development in 1999 was sponsored by the State Council and conducted by the China Internet Network Information Center (CINIC).
The survey was based on 52,549 online interviews conducted between June 15 to 30 and on core data supplied by telecoms authorities, ISPs and public security departments (where individual users have to register).
The reports says that 1.46 million computers now have Internet access and that men account for 85% of all users. In terms of age group, nearly 40% of users are aged between 21 and 25 years old, while 63% of users are single and 48% have (or claim to have) a bachelor's degree.
The report showed that users generally spend 6-10 hours a week online and that most use the Internet to read news, gather information and send or receive e-mail. Not surprisingly, connection speeds are regarded as too slow and speed is regarded as the main factor in choosing Internet Service Providers (ISPs).
The report also listed the most popular web sites providing information in simplified Chinese characters. The most frequently visited sites are:
In respect to e-commerce, the report noted that 85% of interviewees said they would purchase goods online "when the conditions are ripe."
Similar responses were recorded when direct retail sales on television started in the mid-nineties, but as then, quality of goods and the safety and convenience of payment are the major worries for potential online purchasers.
Speaking at news conference to announce the results of the report, Chen Yin, Director of the Planning and Development Division of the Telecommunications Administration Bureau, said the Bureau is trying to further lower the cost of Internet access, increase net surfing speed and help elementary and middle schools get online.
Although the overall numbers of Chinese people using the Internet as a regular part of their information and entertainment diet is still small, two main factors are likely to propel growth at the consumer end even faster in the coming years despite the failure of central government to finalize infrastructure standards.
The first is the involvement of cable TV stations that have already achieved penetration levels in major urban centers that far exceed those of telephone service operators.
The second is the purchasing power of China's youth within the family unit. As Internet usage and familiarity increase in schools and colleges which has been promised by the government, there will be overwhelming pressure on parents to purchase computer equipment for the home. Unlike previous consumer items, this white good will have the strong backing of government and educators.
To service this growing need, major domestic manufacturers are launching home Internet versions of their PCs which include display of existing TV services at ever lower prices and looking at the integration of phone services for the 91% of Chinese homes without one.
At the same time, traditional media providers from the print and television sectors are quickly adapting to the new medium and building online versions of themselves. These moves are being made in direct reaction to the real time choices offered by the Internet, something that has never been achieved by the traditional media and which frees users from local monopolies.
The nature of the Internet is also highly conducive to attracting the type of investment courted successfully by TV drama producers a few years ago and CMM-I is now reporting increasing number of start-up Internet services in key subjects from all over the country.
These include the launch of Internet TV services (see CMM Passim) and the increasing success of individual sites servicing the specialist needs of computer literate adherents on the mainland.
This includes up to 500,000 non-Chinese nationals among whom Internet usage is as high as 90% and who have existing credit facilities to ease e-commerce transactions.
While CMM would not want to tempt fate, the run of stories and official excitement being generated at the current time is certainly reminiscent of headlong rushes into other information and media related technologies (such as satellite TV and cable TV) which have subsequently been subject to serious crackdowns on content.
As before, however, the impact of sites offering information that offends the central government or the use of the Internet to promote free speech or to enable disparate elements to join together will be controlled and monitored and stamped out using every available means.
While many western companies have predicted that the new media will end the ability of government to effectively monitor such activities, they have misunderstood the nature of Chinese government controls over information flow and the breakdown will be much slower than anticipated.
Despite the frequent anomalies arising in policy and action, the frequent "falling out of favor" of certain technologies and the continued central control over media organs, Chinese information controls have always been based on controlling the individual, not the technology.
Indeed, some sections of China's leadership hold the radical belief that the people have the ability to know what is really going on and not complain about it at the same time! That is to say that people who are able to access information that is contrary to official positions will digest the information and continue to hold the official line in their outside actions.
Since this is a political imperative, the nearest analogy CMM can offer is that of a country with two official languages existing side-by-side - one that speaks the ugly truth and a flowery one for formal occasions.
It may seem hard to comprehend, but this has been reality of the development of all other "new" methods of information exchange in China over the last 20 years (including talking) and there are some that think it will continue like that into the future.
For the rest of the world, however, the Internet in China means a new world of opportunities which can be activated from anywhere and which will, one day, allow revenues to be generated directly from inside the country. It also offers early entry into a consumer market notable for its complete lack of brand loyalty (except for cigarettes).
In 1992, CMM-I's predecessor produced a report for the Economist Intelligence Unit that predicted the development of participation sports in China. In light of our new commitment to providing analysis of new media, here are CMM's predictions for the content areas that will generate e-revenues for foreign supported Internet service providers in the coming five years in China.
1. International travel and tourism
2. Stock and Share Investing
3. Property and Real Estate
4. Education / Training
5. News (Political, Sports, Entertainment)
6. ANKE'S SUGGESTION
7. TAMMY'S SUGGESTION