China’s IT Industry in 1997

A series of strange symptoms of poisoning appeared on a girl Zhu Lin unexpectedly: hair lost, muscles on the face paralyzed, limbs weakened, and words slurred. No one can tell what is the cause. Life is in danger! One of her classmates emailed for help on Internet. Fortunately, the first reply arrived in less than three hours. Afterwards, over 1,500 emails reached her. Most of the replies analysed that Zhu Lin had been thallium poisoned. It is the Internet that has saved her young life! In 1994, there were merely a few universities and institutions on Internet. Now there are over 620 thousand end users in China. The number increased four-fold in 1997 compared with the year before, still booming on an exponential curve, and is sure to go through the limit of one million. Information Technology (IT) industry has become one of the industries developing most quickly in China. Sum (billion) Increase (compared to 1996) Anticipation in 1998 Gross output value RMB 380 25%(3.6 times 1992) RMB 460 Total sales profits RMB 250 15% RMB 300 The Tel exchange capacity of China National Public Tel Net has become the second largest one in the world. Last year, the sales volume of PC broke through three million, which indicated that it had increased by sixty percent than 1996. All the above data depict an exciting success for China — a developing country. She is laboring at curtailing the gap between developed countries and herself. As the modern information technology (IT) develops rapidly with the increase of social demand, the core status of IT in the development of modern business has become more and more stable. IT can provide the information a business needs for efficient operations, effective management and competitive advantage. If information systems do not properly support the strategic objective, they can seriously damage its prospect for survival and success. For a company, out-of-date information of demand leads to an excess or insufficient output; inpromptly-attained information results in the loss of capital for the timeliness of currency, and then emerged an inefficient assignment of the resource of the whole society. At present, this kind of waste engendered by the undeveloped IT industry widely exists in all walks of life in China. It is urgent to prompt the informationalization grade of the nation. The world economy has been turning from industrial economy to information economy. P.R.C. Chairman Jiang Zeming once said, IT is the accelerator and amplifier of the national economy. Therefore, a country's information industry embodies its power. Developing IT industry becomes a world trend , and a strategic task in many countries. The informationalization degree of the developed country has reached a considerable level. In 1993, US declared â€Å"National Information Infrastructure† (NII). It is expected that by 2000 information super-highway will have connected all the schools, hospitals, libraries. Although there are over 620 thousand end users in China, but compared with the 1.2 billion population, the popularization of Internet in China is much lower than that in US. The rate between cash flow and currency gross is an important index of informationization degree of a country. The lower the proportion, the higher the informationization degree. In American, the proportion is eight percent. But in China, it has reached twenty-five percent. Eighty percent of world information resource is possessed by developed countries which have only fifteen percent of world population. Meanwhile, with eight-five percent of world population, the developing countries occupy only twenty percent of information in the world. In the developed countries such as U.S.A., it is prevalent to operate the enterprise with information flow. Intranet is being considered an effective way of dealing with information. But in many Chinese enterprises, manpower is required to transmit messages. A lot of waste and troubles follow: a considerable loss of time, insufficient or less accurate information and etc. The low degree of informationalization results from the insubstantial basis of China. In China, economic basis is weak, financial capacity is limited, and IT is far behind the developed countries. Because of the great population, there is great divergence among various areas in China. Every country desires to develop IT industry. Especially, developing countries need information innovation to promote the development of economy. But, because of the weakness of economic basis and insufficiency of financial capacity, developing countries often feel its ability is not equal to its ambition. What should be done? We have several ideas as the following: There*s an old Chinese saying â€Å"know your rival and yourself clearly, you*ll triumph every time!† So let us take a look at the pioneer of IT–US first. For about 50 years, the Americans have laid a solid foundation in the field of electronics, computer and communication. The existing network has become an embryo of information superhighways. Both had prompted President Clinton to put forward NII. In contrary to US, China now calls for the infrastructure of information products. The developing country needs the step-by-step measure. As a result, the principle of China National Information Infrastructure was born. This comprehensive and step-by-step image of Information superhighway make it possible that China will be quickly informationalized. The most beautiful picture can be drawn on pure white paper — â€Å"Skip† on technology Science is the common wealth of human being, the developing countries don*t have to build up from nothing. We can step into the first class directly by taking the existing technology. Take Japan for example. After World War ` , she stands up from ruins and almost in no time, it becomes a shining star. Which way did she take? The best in the world. China now has a good chance to learn the lessons of pioneers, she can do the simplest, the most expedient and the most flexible. For instance, China has just started to set up her own network construction. she can take the opportunity to establish the first-class frame and utilize the most advanced hardware and software. As we can see, â€Å"skip† on technology is suitable for the developing countries, A high-rise building is built from the ground An essential characteristic of IT industry is high investment and high production of additional value. However, since financial capacity is far too limited, high investment requires developing countries to select a right way leading to success. Through the course of the development of IT, we can find that, in general, IT is in the stage of growing and application from the 1980s to a long time in the future. Although Japan had great achievement on IT, from 1980s it began to develop some high-tech instead of promoting deeper application, trying to obtain monopoly profit. However, Japan ran counter to the situation of today's IT and lost its market. The failure of Japan alarms the developing countries: application should be the foundation of the strategy of IT development in developing countries. To promote the innovation, manufacture and application of basic information products, reasonable economic scale should be considered. And it is essential to develop a series of products such as PC, network servers, parallel processing computer system and etc. Cooperation by national and local government –Both central and local initiative should be brought into full play. Now China is building its national information infrastructure through â€Å"Golden Project†(1) and has completed many consequential informationization constructions such as Golden Bridge(2), Golden Card(3), Golden Customs(4), Golden Tax(5) and etc. In the meantime, local informationization projects have quickened their pace. Shanghai information harbor has consummated five information works including information exchange net, science and technology net, community net and etc. Inland provinces and districts such as Henan Province augmented 120 thousand telephone users. The IT industry has been regarded as a pillar industry in more than 20 provinces in China. Competition should be introduced in IT industry to cut down the price . The construction of long-distance trunk line is up to the central government, while local governments manage the branches. Not only big state enterprises but also small town factories should be encouraged to participate in the booming IT industry. To be scientific and strict, there must be a series of laws and regulations. Shanghai Information Harbor grows with laws which the new-born information industries are longing for â€Å"Regulations governing advertisement on the network†, â€Å"Regulations governing EDI† and â€Å"Regulations governing Internet caf*† were formulated. Effective working mode will protect the proper development of the IT industry. Unless troublesome Bill Gates turns into well-behavior or his corporation couldn*t stand firmly on the land of China. If China acts on these ideas, it*s sure to have a splendid future. The business and even the whole society will take on a new look. The telephone lines will reach each home, while the fiber optics will enter the buildings in most cities and towns. Since â€Å"Golden Project† have established the network of all kinds such as business, education, medical care and economy, most things can be done through virtual banks, virtual enterprises, virtual library and so on, even if people stay at home all the time. The advantages the business takes will be conspicuous. The administrative structure will be simplified, the staff will be reduced, the risks of cash will be diminished by EDI, an inexhaustible database will be shared by everyone and will be a strong support of decision-making. The relationships between enterprise and clientele will be as close as fish to water. IT will take the place of some jobs and at the same time, create much more occupations, which brings about that the information industry becomes the biggest industry of the country. A country can benefit a lot from its success in IT industry. Even though the developing countries lack the most advanced technology and sufficient financial support, they can also achieve the goal by attaching importance to the building of IT industry and taking on an appropriate strategy — a step-by-step Omnibus Bill and a skipping tactic of technology.