Digital China is booming

 

By Jayanthi Iyengar

 

Nothing epitomizes the challenges of providing balanced information via

the world wide web better than the subject of the Internet in China.

There are two digital Chinas - the much publicized one of political

repression and blocking "forbidden" content - but that one is dwarfed by

the booming digital China of shopping, trading, chatting and playing

games. And that's where the boom is.

 

Running a simple search for "Internet access China" on Google throws up

3,420,000 links in 0.20 seconds. Of the first 100 results, over 40

percent relate to information on the repressive tactics used by the

Chinese government to control information, particularly politically

"undesirable" information.

 

Less than 20 percent highlight the Internet boom that is sweeping China,

but the details of the boom are spelled out in four recent reports. They

are from the Chinese government's China Internet Network Information

Center (CNNIC), the Beijing-based Chinese Academy of Social Sciences

(CASS) in collaboration with the Markle Foundation, the International

Telecommunication Union (ITU) and Neilson/Netratings.

 

CNNIC's numbers are considered to be official data. CASS is of Chinese

origin but the US-based Markle Foundation is a non-profit organization

that studies the potential of emerging information and communication

technologies and promotes their use in health care and national

security. The ITU is globally recognized. Its Digital Access Index (DAI)

covering 178 countries goes beyond measuring Internet access using

physical numbers. Instead, it includes other parameters such as

infrastructure, education and affordability in order to determine the

digital competitiveness of a particular country as compared with other

ITU member states. Neilson/Netratings is an equally well-known known

global consulting firm, which set standards in Internet audience

measurement and analysis.

Two sides: Expansion of Internet, repression of content

These four reports, read with the glut of information proliferating the

Internet, make one thing clear. There are two sides to digital China. On

one side is a country that systematically represses content and free

expression, using law and technology to aid it in this process. On the

other side is a country that has embarked on the China Wide Web project,

which aims at creating in a short time as much nation-based, Chinese

language content as possible.

While this expansion project is underway, China also faces the challenge

of controlling unruly, unapproved media on a daily basis. Many Internet

experts, however, like Professor Jonathan Zittrain, co-founder of the

Berkman Society for Internet & Society, Harvard Law School, believe that

ultimately efforts at control will be unsuccessful.

Today, China's technologies not only block forbidden information -

primarily about political dissent, religion, Taiwan, Tibet, and other

topics - but they also give the state the power to investigate,

prosecute, and sanction those who seek and/or receive forbidden

information.

"Internet filtering tends to dampen and discourage Internet use. Of

course, things could be worse - countries like Cuba and Uzbekistan

restrict Internet access even more tightly than China. Relative to the

more restricted world (Cuba, Uzbekistan, and to a lesser extent Saudi

Arabia, the United Arab Emirates, and Iran), China's approach makes the

Internet more accessible and more useful than would otherwise be the

case," says Benjamin Edelman, a researcher at Harvard University.

Professor Zittrain and Edelman ran what is believed to be the first

Empirical Analysis of Internet Filtering in China. The analysis was

conducted between May and November 2002, and it found ample empirical

evidence of filtering of unapproved content by the Chinese authorities.

Edelman said his study showed that China blocked a large amount of

material cutting across substantive categories, but with special

emphasis on regional political issues (Taiwan, Tibet, etc), on religion,

on tourism to other countries, on health, and other topics. He also

found evidence of extensive mistaken blocking, seemingly accidental, of

innocuous content - reflecting a lack of precision in certain Chinese

blocking methods. "Subsequent to this study, my sense is that China's

filtering methods have become more precise, better able to block what

China doesn't like, without blocking what the country considers

permissible," he states.

His views are echoed by Professor Zittrain, who points out that if

anything, filtering has gotten increasingly subtle over time. The

Chinese experiment now revolves around "blocking out individual pages

rather than whole sites, automatically blocking web searches containing

certain search terms, or simply encouraging the use of Internet cafes

rather than individualized connections, so usage can be monitored by

passersby", he says.

Booming digital China is not about politics

While that is one China, there's another booming virtual China, which

can be ignored only at one's peril. This is a China where repression has

failed to check Internet penetration. The official CNNIC pegs the number

of Internet users at 79.5 million at the end of 2003, surpassing

previous projections of around 78 million. These figures make China the

second-largest Internet users in the world, next only to the United

States with about 165.75 million, and well ahead of Japan's 56 million,

going by the Central Intelligence Agency's (CIA) World Factbook for

these countries.

The growth in numbers has caused jubilation within China but has raised

some eyebrows elsewhere. This is because the Chinese government's

figures represent an unprecedented half-yearly jump in number, up from

58 million in 2002 to 68 million (17 percent growth) in mid-2003 and

79.5 million (17 percent growth) at the end of the year. This data is

also in sharp contrast to earlier projections made by the Chinese

themselves. For instance, Hu Qiheng, chair of the Internet Society of

China pegged the number of Chinese netizens at 78 million for 2003. She

was speaking at the Second Internet Conference of China in December,

just a fortnight prior to the release of the official figures. By her

estimates, there would be 500,000 websites and 30 million online

computers in China by the end of the year. Against this, the

government's CNNIC has placed increased access to Internet websites at

595,550 (60 percent growth) and computers linked to the Internet at

30.89 million, representing a 48 percent growth during 2003.

Such anomalies in numbers are not abnormal when it comes to Chinese

data. The Chinese government's figures generally tend to be questioned,

but CNNIC's figures have been questioned in particular in 2001, when

Iamasia, an independent research firm, released figures for Internet

users. Steve Yap, communications director for Iamasia, pegged the number

of China's Internet users at 15.2 million at a time when CNNIC was

claiming 20 million. That was in the past, but even today there is a

question about what defines an Internet user - the Chinese government

defines a user as one who uses the Internet for at least an hour per week.

 

 

Net penetration in China, of course, is way behind the US and the global

averages in percentage terms, with only about 5.6 percent of the Chinese

population of 1.27 billion having Internet access, as against 10.7

percent globally and about 63.2 percent in the US.

 

Average Internet user: educated, young, male

However, what is also undeniable is that the Chinese are investing

heavily in infrastructure.The average Internet user is an educated,

young, single male 15 years to 35 year of age. He is more interested in

chatting and playing games on the Internet than trading, checking e-mail

or surfing the net for forbidden content. An average Chinese Internet

user spends 11.3 hours a week playing games, making China a mega-market

for electronic games. According to China's General Administration of

Press and Publication (GAPPPRC), it approved 37 new games in 2003.

 

Also, though China's netizens are comparatively uneducated, the number

of highly educated (post-graduate) Internet users is growing. Further,

Internet users seem to be concentrated in industries and fields such as

manufacturing, education and public management, social organizations and

the IT industry, which is exciting business forecasters like

Neilson/Netratings and others.

 

Email - through which forbidden information could be transmitted and

exchanged - is not an obsession for most Internet users in China, though

simple message service (SMS) and web-based messaging is popular. "About

20 percent of Internet users do not have e-mail accounts. For those who

are using e-mail, only 20 percent of them check their accounts every

day. Yet many Internet users prefer [companies] ICQ or OICQ," says

Professor Guo Liang, who led the study by the Chinese Academy of Social

Sciences (CASS).

 

The CASS report has a specific segment on public perception of the

Internet as a tool for political self-expression. Professor Guo says

that in his opinion, Internet penetration would touch 150 million by

2005 - though the Chinese government would like this figure to be 15

percent of the population or about 190 million users. However, even

assuming all of those who use the Internet use it to surf for unapproved

content, it would still be less than 15 percent of the Chinese

population. These figures, Guo says, contradict the impression that most

Chinese use the Internet for political self-expression or that the

Chinese government represses its citizens extensively. However, he is

among the first to concede, "While the Internet is still relatively new

to China, it is already changing Chinese cultural, social and political

institutions."

 

The political dimensions of the report apart, the CASS findings are

highly regarded, as there are few other reports of comparable depth and

detail mapping China's Internet potential and penetration. Guo's 2003

report is the second in the academy's series on Internet use in China.

The first was released in 2001 and studied Internet use in five big

cities. The second, currently cited study, completed in 2003 after two

years' work, covered 12 cities and five small towns.

 

The study, called "Surveying Internet Usage and Impact in Twelve Chinese

Cities", this study is based on door-to-door interviews with 2,457

Internet users and 1,484 non-Internet users. It makes the point that

rural China offers as much potential for Internet growth, as does urban

China.

 

"The Internet has the potential to contribute significantly to the

future of the people of China. Professor Guo's findings show that in

China, the Internet has the ability to expand the flow of information

and spur economic growth," said Zoe Baird, president of the Markle

Foundation. Guo said, "With the arrival of the Internet, the Chinese

people have the opportunity to access information, communicate and

conduct economic transactions in a new way."

 

Lessons from SARS - shop at home

The year 2003 was monumental for digital China in many other ways. The

severe acute respiratory syndrome (SARS) epidemic opened China's eyes to

the potential of the Internet as a tool for furthering commerce. Western

observers say that SARS taught Beijing how difficult it was to control

the spread of information in the Internet age and that it could be

waging a losing battle if its aim was merely to control information.

 

China, however, drew a different and innovative lesson from the same

experience. The conclusions should be compulsory reading about why

digital China cannot be dismissed as being repressive and controlled.

With so many people afraid to venture out because of SARS, they shopped

at home, sent messages from home and played Internet games at home.

 

Online shopping, short message services and online games were three

rapid growing application of the Internet in 2003, says CNNIC. It points

out that because of SARS, online shopping and message service found a

second development opportunity in 2003. Among those surveyed, only 8

percent never visited a shopping website, while 40 percent of those who

visited shopping websites made online purchases. They bought books,

audiovisual material and products; communication equipment was the

principle product of on-line shopping.

 

During the year, website message service users sent out 10.9 messages a

week, which the Chinese consider to be a large market of which everyone

wants a share. Almost all the major websites and many

specialized-service websites opened messaging services, which has become

one of the important and steady income sources in the country. And the

stock prices of [messaging companies] Sina, Sohu and Netease soared on

NASDAQ. "Short message service played a vital role in the process," said

the People's Daily.

 

Professor Guo provides a more balanced and telling interpretation of the

situation, which cannot be ignored by serious China watchers. "I believe

last year was a milestone [in the sense] that several cases happened,

including Sun Zhigang, SARS, Liu Yong and BMW," he said. " It is obvious

that more and more people are trying to use the Internet to express

their opinion and the online discussion did change the government

thinking and policy," he said.

 

The details of Sun Zhigang's death in police custody in Guangzhou was

picked up by the conventional media from the web. The arrest,

prosecution and death sentence of crime lord Liu Yong symbolized the

Chinese government's determination to crack down on corruption. The

provincial courts had given him a two-year reprieve from a death

sentence, but it was rejected by the Chinese Supreme Court in December

2003 and Liu was executed soon afterward, sending home the message that

the government means business. The word was spread on the web.

 

Concerning BMW, the Chinese government was forced to listen to angry

Internet users who accused the courts of letting off lightly the female

driver of a BMW car who ran into a peasant in a tractor in the city of

Harbin. The woman was heard threatening the peasant after she had a

minor accident in which her silver BMW was scratched. Word spread on the

web - and so did the outrage.

 

English no longer crucial in technology

The International Telecommunications Union study makes an equally

important point in China's favor. It suggests that English is no longer

a decisive factor in quick technology adoption, especially as more

content is made available in other languages. "Until now, limited

infrastructure has often been regarded as the main barrier to bridging

the Digital Divide," says Michael Minges of the Market, Economics and

Finance Unit at ITU. "Our research, however, suggests that affordability

and education are equally important factors." Half of the Internet users

in China, for instance, are university educated. Surprising though it

may seem, ITU ranks China (0.79) below Sweden (0.83), but above Canada

(0.78), the US (0.78), and Britain (0.77) in its latest Digital Access

Index.

 

These are all findings that make it clear that no one keeps down the

growth of the Internet in China, including the Chinese government.

However, what it can do is guide the direction of Internet's growth by

using the Internet as a vehicle for growth. An indication of such

thinking comes from the statements made by high-ranking Chinese officials.

 

Xi Guohua, vice-minister of information industry, announced at theSecond

Internet Conference of China in December that his ministry would

strengthen its macro planning, guide the Internet industry and push

forward the upgrading of the Internet with a focus on the market.

 

Xu Guanhua, minister of science and technology, echoed Guohua, when he

pointed out that, research and development apart, "China will vigorously

push forward on the popularization and application of Internet,

development of electronic commerce transaction, electronic government

administration and other information services, so as to promote

industrialization with informationalization."

 

The most important issue today is that the Chinese government no longer

fears the world wide web, the civil societies or the propaganda tactics

of the free world, particularly the US, which makes every effort to

beam-in content aimed at converting and democratizing the Chinese

citizenry. The Chinese have refined Internet filtering systems to such

an extent that such content is well-camouflaged from its average

netizen. The Beijing government now checks content at the gateway level

by controlling its Internet service providers (ISPs) - just three in

number (ChinaLink Networks, Netaway, and VPM Internet Services). It lays

down guidelines for any of the telecom service providers who wish to do

business in China. Amnesty International and other human rights bodies

notwithstanding, none of these corporations dare to contest the Chinese

government's policies for fear of losing a foothold into a consumer

market which is waiting to explode.

 

Jayanthi Iyengar is a senior business journalist from India who writes

on a range of subjects for several publications in Asia, Britain and the

United States. She may be contacted at jayanthiiyengar1@hotmail.com.

 

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