Roundup: China's Information Industry Prospers in 2001

Home>>Business

Last updated at: (Beijing Time) Saturday, December 29, 2001

Roundup: China's Information Industry Prospers in 2001

The year 2001 sees a milestone for China's booming information industry that has made huge achievements in both service and technology.

The year 2001 sees a milestone for China's booming information industry that has made huge achievements in both service and technology.

In July this year, mobile phone users in China outnumber those in the United States, ranking first in the world. The number of fixed phone users have also increased sharply throughout the year in China.

In the first 11 months of this year, fixed phone subscribers increased by 32.92 million to 177 million and mobile phone users by 54.65 million to 140 million. The business revenue of the telecommunications sector reached 362.4 billion yuan (43.7 billion U.S. dollars), up 13.8 percent from a year earlier.

By the end of this year, the analog mobile telecommunications service will come to a close in China, and the CDMA (code division multiple access), a 2.5G mobile communication service, will be put into operation in 2002.

With the expansion of the telecommunications market, China has reformed its state-own large telecom enterprises.

For instance, China Railway Communications (China Railcom) started to operate fixed phone service in ten cities; on December 11, it was announced that China Telecom, China's biggest telecom giant, would be divided into two parts; and on December 19, China SatCom, a satellite phone company, was officially set up in Beijing.

Consequently, there emerged seven large telecom players in China, namely, China Telecom, China Mobile, China Unicom, China SatCom, China Netcom, Jitong and China Railcom, thus cracking the deep-rooted monopoly in the telecommunications sector.

They competed with each other by offering discounted telecom services, such as IP and IC cards.

However, customers also benefited a lot from the cancellation of the start-up fees for phone service beginning July this year, a high point in the development of telecom sector in China.

Compared with the telecommunications sector, the Internet sector has seen stagnant development due to the fallout from the global economic downturn.

When website Netease was de-listed from the NASDAQ, a number of Internet players had to downsize their staff, and paid e-mail mailboxes, rather than free ones, became the trend.

Nevertheless, some experts and organizations are still optimistic about China's Internet business. Their positive approach is based on the following aspects: China's big market, the rapid growth in the number of Internet surfers, and China's entry into the World Trade Organization (WTO).

A report issued by the United Nations Conference on Trade and Development on November 21 predicted that with China's WTO entry, the future looks rosy for the nation's e-commerce.

"China's entry into the WTO ...will open the market for foreign investment and create a competitive environment that should bring down the access cost and improve service quality. It will also provide Chinese enterprises with opportunities for cooperation, leading to faster adoption of e-commerce practice," it says.

Lu Yongxiang, president of the Chinese Academy of Sciences, has no doubt about the prospects of Internet business. He says, "Spring is just around the corner for the New Economy in China."

In fact, some renowned IT giants such as Motorola, Microsoft, IBM and Vodafone, have increased their investment or set up offices in China during the year.

The appearance of these foreign competitors is sure to heighten the competition in China's information industry market, and Chinese players are considering drawing out countermeasures to meet the challenges in the coming year.

Premier Zhu Calls for More Efforts to Boost IT Industry

China's Telephone Users Top Over 317 Million

China's Telecom Revenue to Reach 1 Trillion Yuan in 2005