CHINA INFORMATION TECHNOLOGY LAW NEWSLETTER
Vol. 2, No. 15 - November 5, 2001
TOPICS THIS ISSUE: 
- Number of Internet Users in China
- Xidan Shopping Center in Beijing Embarks on E-commerce
- Urbanization Development Through IT
- Internet Censorship
- China Telecom Split
- Shanghai Post and Telecommunications Signs Distribution Agreement
Number of Internet Users in China
Since July last year, the number of Internet users in China has grown 56.8%, bringing the number of users to 26.5 million. Numbers show that approximately 10 million personal computers have been linked to the Internet in the same period and predictions are that these numbers will continue to grow. According to statistics, the percentage of users who are highly educated people is down, an indication that the Internet is becoming more usual with common residents. For example, Chinese farmers have started to go online in order to increase their business. In Ningbo, over 30,000 farmers have started doing business online and are able that way to receive large orders from supermarkets in the region and other provinces and even from abroad.
In order to increase Internet usage even more in China and the Asia Pacific region, the CEO of AOL Time Warner Inc, Gerald Levin, recently suggested that governments in the region should liberalize their telecom markets, cut tariffs on high-tech goods and increase protection of intellectual property rights. To take full advantage of all possibilities the Internet can give, it is important to have policies in place in the Asia-Pacific region that favor pro-competitive liberalization of telecommunications in order to make Internet access affordable.
(Source: Xinhua News Agency, AFX Asia)
Xidan Shopping Center in Beijing Embarks on E-commerce
Wang Juntao, former chairman of my8848.net, announced recently that he would embark on an alliance with Beijing Xidan Shopping Center Ltd to set up Beijing Xidan E-business Ltd. Through this alliance, Wang will become the chairman of the new Xidan website. The new website will provide e-commerce with goods from Xidan, e-business solutions, an online trading platform and e-retailing for commercial institutes and individuals. Being a State-owned company, opening up for e-commerce is a way for Xidan to be prepared once the retail business opens up for foreign competition after China's accession to the WTO. According to Chinese State media, foreign investors will be allowed to have controlling stakes in JV retailers after one year.
On the one hand, it can be put into question whether this new Xidan e-commerce venture is being launched into a favorable environment. Surveys show that the average Internet user has a relatively low payment ability and is 20-30 years old. On the other hand, the surveys also say that about 2/3 of China's over 26 million net users are willing to try online shopping. Wang Juntao himself is very optimistic, but some experts warn that there is a great need for improvement, particularly concerning online payment, security, logistics and legal protection.
(Source: China Daily)
Urbanization Development Through IT
It seems a wave of interest has hit Chinese provinces concerning urbanization and infrastructure. This should come as no surprise since an urbanization wave is sweeping over China. For example in Zhejiang province, almost 50% of the residents now live in urban areas, and with the pending Beijing Olympics infrastructure, this trend will no doubt continue.
A World Bank-supported project has been initiated in Sichuan Province in order to develop an urban management GIS (Geographic Information System) for the Sichuan Urban Environment Project Office. The purpose of the project is to provide for ecological and sustainable economic growth of the urban areas of Sichuan Province.
The cooperation partner who will implement the project is Integrated Spatial Information Solution Inc's subsidiary, PlanGraphics Inc., who will provide the necessary information technology. The technology will improve urban infrastructure by linking information systems and data between provincial and local government agencies. A Chengdu Company, Jinkecheng Geospatial Information Technologies Co., will be involved as a subcontractor.
The World Bank project will be carried out on five levels: 1. System development and technical training for the Sichuan Provincial Construction Bureau. 2. An environmental management information system and office automation system for the Sichuan Environment Protection Bureau. 3. An urban decision support system for Deyang and Luzhou. 4. A wastewater infrastructure operations system for Leshan. 5. A water supply infrastructure operations system for Luzhou.
Apart from this project in Sichuan, the first urbanization oriented website in China has opened in Hangzhou. Hangzhou is the capital of the eastern province of Zhejiang. The project is a cooperation between the Macro Economic Research Institute of the State Development Planning Commission and Zhejiang Provincial Development Planning Commission.
(Sources: Xinhua News Agency, Business Wire)
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Internet Censorship
For the APEC meeting that was recently held in Shanghai, the Chinese government relieved blocks on several foreign websites. These websites include several US newspapers, some Taiwanese newspapers, the BBC, CNN and the Voice of America.
After the conclusion of the meeting, China decided to re-impose the controls and has received criticism from Britain. It is argued that the Chinese State imposes these restrictions due to a fear of negative influences on the Chinese public from certain media. Among others, the British Foreign Office Minister, Denis MacShane, is of the opinion that Chinese citizens have the right to have the same access to Internet sources as the rest of the world, but it seems quite some time will need to pass before the government authorities can be convinced of this.
(Source: Agence France Press)
China Telecom Split
China's telecom sector is going through an overhaul. The Ministry of Information Industry (MII) announced that China Telecom wants to encourage competition and is therefore planning to break its monopoly in the fixed line segment. The plan is to divide the State-owned China Telecom into two regional operating companies, one northern and one southern sector. The northern will comprise operations in 10 provinces, including Beijing and Tianjin, and the southern will include 21 provinces and municipalities in the south and northwest. China Mobile and China Unicom will each become the base of a group and will be dealt respectively fixed line assets from smaller operators. The reorganization will include the merging of China Netcom into the northern sector. China Netcom is a fixed-line operator but also has activities in data transmission and Internet telephony. China Netcom and the new southern part of China Telecom will be awarded cellular licenses.
In order to oversee this new structure and clarify the responsibilities of the State bodies in the telecom sector, a new commission will be created which will go by the name of the Information Management Commission. This new telecom structure is also thought to be a step toward international competition, which will take place in the telecom services sector once China's WTO membership is finalized. It is expected that Beijing will take the lead in opening its service sectors, notably in telecom. The competition will tighten and it is necessary for the Chinese telecom sector to gather strength, which in this case is done by strengthening domestic players. However, questions remain to be answered, such as how the new northern and southern players will compete, and what the impact on foreign or private competition will be.
(Sources: Financial Times, AFX Asia, Xinhua News Agency)
Shanghai Post and Telecommunications Signs Distribution Agreement
Shanghai P & T has signed an agreement with Airspan Networks. Through this distribution agreement, the two partners together will become the leading wireless broadband supplier in China. Shanghai P & T introduces advanced telecommunications technologies and equipment into the Chinese market through R & D. Airspan Networks provides wireless DSL systems and solutions to more than 40 countries.
According to the two-year agreement, Shanghai P & T shall purchase USD 1 million of the Airspan AS4000 wireless DSL system in the fourth quarter of this year. Shanghai P & T has also agreed to build a support network and center for Airspan products as well as provide training for personnel.
(Source: M2 Presswire)
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