The filter, called Green Dam Youth Escort, was to have been required from 1 July, but the industry ministry said computer makers needed more time.

Its planned rollout sparked widespread disapproval inside China, legal challenges and criticism from overseas. Officials say it is designed to shield children from pornography and violence.

However, many internet users have criticized the software plan as an attempt to tighten the Chinese government’s already strict controls on internet usage. A report by China’s official Xinhua news agency gave no other details on the decision by the Ministry of Industry and Information Technology.

The BBC’s Quentin Sommerville, in Beijing, says the reversal is a very rare and embarrassing climbdown for the Chinese government. Chinese internet users and were furious about this additional control.
Foreign governments have complained that the new software could break trade rules, and concerns have been raised about its effectiveness and safety.
Tests carried out on Green Dam both inside and outside China indicated that it left personal computers open to many different security risks, including virus attacks.

The only way to grasp the unique characteristics of the Greater South China Internet is to look individually at Internet diffusion in the two provinces: the Special Administered Region (SAR) and the Republic. Given the fact that the Internet allows people to communicate in many ways, there is no one indicator that adequately represents the Internet capacity of a nation or province. This study uses a framework that describes the state of the Internet diffusion in a nation in terms of six dimensions: pervasiveness, geographic dispersion, sectoral absorption, connectivity infrastructure, organizational infrastructure, and sophistication of use. This framework was first presented in The Global Diffusion of the Internet Project: An Initial Inductive Study in 1997-1998.[1] Variants of this framework have been applied to over 36 countries. This study represents the first attempt to apply the framework at the subnational level.

2. Hong Kong
Currently, Hong Kong plays a pivotal role as the central intermediary between China and the West, and to some extent between Taiwan and the south China provinces. It remains to be seen whether the business intermediary role Hong Kong plays will become less important as the Internet enables China’s provinces to participate directly in the global economy. The Internet in Hong Kong is booming (see table 1). The Internet access business is highly competitive, with more than 100 providers and at least 10 viable ones. Broadband access is less competitive with Asynchronous Digital Subscriber Loop (ADSL) access available only through Hong Kong Telecom IMS and cable access stifled. The city is trying through its “Digital 21″ policy initiative, its citywide broadband implementation, and the new Cyberport to lead Hong Kong into the information age. Hong Kong’s status as a SAR of the People’s Republic of China (PRC) both raises questions about its long-term stability and opens opportunities for providing the leadership necessary to integrate China fully into the global economy.

Over 90 percent of Hong Kong’s businesses are small businesses. Almost all are family owned. Although there used to be a significant amount of manufacturing in Hong Kong, most manufacturing is now done in neighboring Guangdong province or throughout Asia because of space and cost considerations. Hong Kong businesses are masters at building highly flexible supply networks that allow them to produce goods better, faster, and cheaper than anyone else in the world. Though information technology such as the phone, fax, and e-mail are indispensable to these networks, many Hong Kong businesses have been slow to invest in more advanced technologies, such as EDI and ERP.

Table 1: Dimensions of Internet diffusion in Hong Kong

Dimension Level Explanation
Pervasiveness (4) Pervasive With the number of dial-up Internet accounts more than 1 in 10, the number of users approaches 2 in 10. There are 98,183 hosts in the ‘.HK’ top-level domain.
Geographic dispersion (4) SAR-wide Internet access is available throughout the SAR. ISDN access is available in most places.
Organizational infrastructure (3) Competitive It is a difficult call as to whether to place Hong Kong at the competitive or the robust level. With 133 licensed ISPs, Internet market is competitive, though HK Telecom is the dominant force. HK Telecom’s monopoly over international circuits is being opened.
Connectivity infrastructure (3) SAR’s backbone consists of T3 connections to the HKIX. International connectivity does not rank at level 4. ADSL is just getting rolled out.
Sectoral absorption (4) Widely used Internet use is strong in all sectors, with universities and the public sector leading the way.
Sophistication of use (3) Transforming Hong Kong’s leaders are committed to transforming the economy through the Internet. The SME community has been slow to invest in inter-Enterprise information technology.

2.1 Determinants of Internet diffusion in Hong Kong
Unlike its parent neighbor China, Hong Kong has a far more transparent government and a history of open competition with low taxes or fees on commerce. In the hope of building on Hong Kong’s present position as a trade and finance hub for Asia, Hong Kong’s leaders are trying to lay the groundwork for Hong Kong to become a next generation E-Commerce hub.

The Information Technology and Broadcasting Bureau (ITBB) in conjunction with the Information Infrastructure Advisory Committee (IIAC) has formed a package of initiatives called Digital 21 to position Hong Kong as the leader in the digital world of tomorrow. K. C. Kwong, secretary for ITBB, stated, “We have set out our vision, initiatives and targets of how Government, business, industry and the academia can work together to make Hong Kong a leading digital city in a globally connected world.” The proposals include strategies for using a series of top-down initiatives to spur informatization while encouraging market forces to drive bottom-up development. The other major government body that has a major impact on the Internet in Hong Kong is the Office of the Telecommunications Authority (OFTA). OFTA, established in 1993, is responsible for regulating the rapidly developing and increasingly competitive telecommunications industry in Hong Kong.

As Muller points out, the Hong Kong government’s tradition of licensing technology has not only become more complicated with digital convergence, but this practice hinders the development of digital media. One area where these complications have arisen is in the provision of Internet services through cable modems. Even though there are four companies licensed to provide fixed line services, these very same licenses have stifled competition for broadband services. In 1992 Wharf Cable, for example, received a license to offer cable services but was restricted from offering cable modems in order to protect the interests of the other fixed line license holders. Video On Demand (VOD) also created a quandary when Hong Kong Telecom conducted VOD trials in 1995, because it impinged on the benefits that Wharf argued it had purchased with its cable license. Currently ISPs need PNET licenses, which require them to pay HK$0.042 per minute for each call they terminate. They have not been required, as Muller feared, to purchase a new license for each service they offer. However, except for IMS, ISPs do not have competitive access to broadband services. OFTA faces challenges in opening up the broadband market to competition without strangling it through a licensing regime.

The Cyberport, a private public venture masterminded by Richard Li of the Pacific Century Group, has caught the imagination of Hong Kong as a strategy for helping Hong Kong leverage its capabilities as a transportation and financial center into becoming a center for the development of cyberspace. The Cyberport’s goal is to provide the office and residential space for high tech ventures and their employees, creating a synergistic environment. The government has provided one of the last undeveloped parcels of land on the Hong Kong island for the Cyberport in return for a share in the venture. Major high tech companies such as IBM have expressed an interest in relocating to the Cyberport. Though some have dismissed the venture as primarily a property deal, there are others who believe that the Cyberport will stimulate the development of a new generation of electronic intermediaries in Hong Kong. For almost any global business there are logistical and operational reasons for having an Asian electronic “hub.” The question is whether that hub should be in Tokyo, Sydney, or Singapore or in one of the new emerging centers, such as Malaysia’s Multimedia Super Corridor or Shanghai’s Pudong District. With its redundant broadband infrastructure connected to key exchange points on the planet, the Cyberport will be an attractive, if expensive, center for running servers to support electronic services. The Cyberport will provide a relatively easy way for westerners to live and work in Asia and will give them and their Asian coworkers a sense of space not always found in crowded Hong Kong.

With low barriers to entry and free competition, the Ex-British-based economy is poised to be one of the leaders in Asia in terms of investment in information technology. The lack of government barriers encourages innovation. This environment has created the prosperity to support this investment and has attracted capital from around the world.

Hong Kong is a leader in telecommunications with a strong market infrastructure. With 56 lines per 100 people, Hong Kong has the highest teledensity in Asia, except for Japan. All exchanges are digital. It is second to Japan worldwide in its rate of use of fax (8.7 fax lines per 100 telephones). It has the world’s highest density of pagers, with one out of every six people carrying one in 1996. The percentage has decreased with the incredible popularity of mobile phones. Currently 3.358 million people have cellular phones, one of the highest densities in the world, with that number still growing by 46 percent a year. The volume of international calls, which had been rising steadily for years, dropped in 1998 by .047 percent. It is a tough call whether this is a result of the substitution of e-mail for phone calls or a reflection of Hong Kong and Asia’s economic downturn.

With strong ties to its British heritage, Hong Kong is a bilingual (English and Chinese) society. English can be used to communicate digitally to most of the world. Conversing with neighboring communities in Chinese can bridge the language gap between China and the rest of the world. Hong Kong’s openness to foreigners and different cultures allows the merging of the best of both technologies and knowledge.

Hong Kong is the major intermediary between Taiwan and the Mainland in terms of trade and investment. No direct trade or other direct forms of commercial or official contact have been allowed between Taiwan and the Mainland since the Communist victory in 1949. Though Taipei allowed the resumption of direct trade in the 1980s, no direct shipping is allowed. Over 3,000 Taiwan-controlled companies operate in Hong Kong, and an estimated 50,0000 Taiwan nationals work in Hong Kong. These companies account for the bulk of the estimated U.S.$25 billion that Taiwan invests in mainland China and are the principal conduit for U.S.$20 billion in trade. As Taiwan integrates Internet-enabled inter-enterprise information technology, the technology may diffuse through some of these companies to Hong Kong firms.

3. Guangdong
Guangdong has the highest number of Internet users of any province in China (see table 2). Though only 6 percent of China’s population resides in Guangdong, a recent CNNIC study reported that 11.7 percent of users surveyed in its national Internet study came from Guangdong. The popularity of the Internet in Guangdong, relative to the rest of the country, may be explained by a number of factors, including the economic prosperity of the province, the high number of emigrants, and the proximity of Hong Kong. China Telecom’s Guangdong Data Communications Bureau (GDCB) dominates the commercial Internet market, providing more than 90 percent of the users. Through its ChinaNET “163″ Network and Multimedia “169″ Network services, China Telecom provides dial-up Internet access throughout the province at rates that are distance insensitive. The GDCB is building out its ATM network and is aggressively promoting electronic commerce. It developed its own certificate authority but has been forbidden to use it by central authorities pending decisions by the People’s Bank and other organizations on a national strategy.

Table 2: Internet dimensions for Guangdong

Dimension Level Explanation
Pervasiveness (3) Common 1.11 users for every 100 people.
Geographic dispersion (4) Provincewide “163″ and “169″ networks available in 23 cities. There is no distance charge from rural areas.
Organizational infrastructure (2) Controlled China Telecom is the primary provider of Internet access and controls international circuits. There are many Internet content providers, some of whom provide access. Golden Bridge network and CERNET provide commercial and educational access.
Connectivity infrastructure (3) ATM backbone is being constructed. Supports Frame Relay and IP. There is an Internet Exchange and connectivity to Hong Kong and the world.
Sectoral absorption (2) Moderate Internet leased line connectivity is available in most universities but not secondary schools. State Information Office runs Web site that provides access to information from various sections of the government.
Sophistication of use (2) Conventional Internet is primarily being used as a substitute for voice and fax. E-mail is very popular. There are some top-down efforts to change business processes, such as the Golden Projects.

3.1 Determinants
The dimensions of Internet diffusion in Guangdong are created through the interaction of governmental (top-down) policies with the dynamism that has been created by economic opportunity.

The government is an integral part of technology development. As Lovelock points out, the development of the Internet and e-commerce in China is primarily a top-down effort on the part of the Chinese government because it believes that not only will the Internet boost the economy, but it will greatly enhance the central government’s ability to control the country’s economy.[2] In the interests of productivity, the government wants to decentralize decision making to the provinces and the markets, but wants to make sure that it is able to keep track of those decisions. Informatization, the process of introducing information technology into the society, has long been seen as a tool for improving the efficiency of the Central Government.

China Telecom is committed to building a nationwide Internet Protocol (IP) backbone and rolling out both the “163″ ChinaNET and the “169″ Multimedia Network. Though China Telecom continues to lose money on its IP services, it makes it up in the per-minute local telephone charges for accessing the networks. China Telecom, as a matter of both national and organizational interest, is plowing the huge cash flow generated by Internet services back into the network.

China Telecom’s provincial arm, the GDCB, is taking the initiative in rolling out a provincial ATM backbone and developing new value added-services such as IP-telephone and electronic commerce. In the interests of providing the tools to support e-commerce, the GDCB developed its own certificate authority for authenticating servers well ahead of the development of national policy. In the case of the certificate authority, the People’s Bank has put a hold on its rollout by the GDCB.

The central government’s investment in a nationwide education network (CERNET) has given almost all university students exposure to the Internet and has been one of the most effective ways through which the government has pushed Internet diffusion.

Though the provincial government has easily adopted information technology, Guangdong’s rapid absorption of the Internet relative to the other provinces can primarily be attributed to its economic growth as a result of the open door policy. In 1979, the State Council gave Guangdong permission to implement special economic policies. As a result, three cities from Guangdong — Shenzhen, Zhuhai, and Shantou — were designed as special economic zones. In 1988, the central government allowed Guangdong to experiment with economic reform province-wide. Guangdong has developed into an export-oriented economy and is regarded as China’s frontier to the outside world. The relative prosperity of the province has allowed people to purchase Internet services. In addition, the Internet represents a significant opportunity for time and cost savings for those individuals and companies involved in international trade and, through the Web, opens up access to highly valuable information.

Guangdong’s open door policy and the resulting economic boom have attracted entrepreneurial and technical talent from throughout China. Guangdong and its private companies are often the destination for the cream of China’s youth who fail to land positions in Beijing and Shanghai. Many of these migrants have an aptitude for technology and have been early adopters of the Internet. In addition to attracting risk takers from throughout China, Cantonese culture has traditionally been commerce friendly and has been a fertile ground for entrepreneurial Internet companies. Over 20 million people have emigrated out of Guangdong to Hong Kong and other countries. These overseas Chinese still have connections and influence with their family and friends who remained in Guangdong. E-mail is being extensively used to support those connections.

Multinational companies have been attracted to Guangdong as a gateway for both manufacturing and selling in China. The Institute for the Future recognizes Shenzen as a key node in the Global Silicon Network.[3] As part of doing business with these high-tech multinational firms, Guandong’s businesses are exposed to the latest in information technology and are sometimes required to implement it as part of the their trading agreements. Multinational companies also see Guangdong as a major market for their technologies and a gateway into the rest of China.

4. Republic of China (Taiwan)
The island of Taiwan has a significantly higher number of hosts per capita than Hong Kong (see table 3). There are other indications that though both governments are aggressively promoting information technology, e-commerce is being more rapidly adopted in Taiwan. One major difference from Hong Kong is that Taiwan has a vibrant manufacturing sector. The leadership of the electronic manufacturing industry, in particular, has actively embraced information technology, including recently the use of enterprise resource planning (ERP) software. The multinational corporations (MNCs) have driven some of this acceptance. Intel, for example, takes 80 percent of its orders in Taiwan from distributors placing orders through a Web-based system. The use of Web-based ordering, however, is not yet pervasive among Taiwanese distributors taking orders from end-user manufacturers.

Table 3: Dimensions of Internet diffusion in Taiwan

Dimension Level Explanation
Pervasiveness (4) Pervasive 1.6 Internet users per hundred population. 676,623 hosts in either ‘.TW’ or ‘HINET.NET’ domains.
Geographic dispersion (4) Nationwide No premium for accessing Internet from remote areas.
Organizational infrastructure (3) Competitive The three government-related ISPs dominate industry.
Connectivity infrastructure (3) Chuangua operates a 155 Mbs nationwide ATM backbone. There are 301.34 Mbs of international IP bandwith. ADSL and Cable modems are being rolled out this year.
Sectoral diffusion (3) Common Sectoral dispersion is evolving towards the widely used level. Internet access is being rolled out to all classrooms and is available in all universities.
Sophistication of use (3) Transforming Being driven by their multinational partners, electronic companies are reworking business processes to leverage the Internet.

4.1 Determinants
The government has sought to drive information technology through the National Information Infrastructure (NII) project, a supra-ministry endeavor that has been able to drive investment and decision making through many different ministries. The NII Steering Committee facilitates NII development through deregulating telecommunications and improving related laws. It also aims to expedite network construction through the development of network exchanges, broadband networks, and interconnection of the telecommunication and CATV networks. It aims to integrate computer and network education into all academic levels. The government is committed to extending the application of information technology, developing net-related industries, and enhancing research and development.

The information hardware industry in Taiwan reached U.S.$30.4 billion in 1997. Taipei is a node in what the Institute of the Future calls the Global Silicon Network. Because many managers in this industry were educated in America or worked in Silicon Valley, these Taiwanese firms have strong investment ties with electronics firms in the United States and around the world. They are aware of the latest developments in hardware manufacturing, including the use of information technology to reengineer business processes. Not surprisingly, it is the information hardware manufacturing industry that is making the most sophisticated use of the Internet in Taiwan.

There is a significant amount of domestic content in Chinese in Taiwan. There are a relatively large number of hosts so many organizations are gotten on the Web. This in turn increases pervasiveness as users go on-line to access the Web.

Because of Taiwan’s ties to the Global Silicon Network, many Taiwanese have been exposed to the West. They have studied English in school and can utilize the English resources of the Web.

There is a desire on the part of Chunghwa, the national government, and even some businesses to make Taiwan a hub of the Internet. Some degree of national pride is involved, finding expression in the deployment of international IP circuits both to the United States and to other regional counties.

5. Fujian
Taiwanese businesses have invested heavily in manufacturing facilities in Fujian, the province that lies across the narrow Taiwanese straits. Common linguistic ties have allowed Taiwanese business in Fujian to build relationships with business and local government leaders. This has overcome many of the bureaucratic and logistical obstacles to doing business in China. Fujian’s leadership, in the interests of supporting business development, is now creating an advanced communication infrastructure. In building a state-of-the-art ATM network, they are leapfrogging the existing X.25 network that presently connects the province (see table 4).

Table 4: Internet dimensions of Fujian

Dimension Level Explanation
Pervasiveness (2) Established More than one user per thousand population.
Geographical dispersion (2) Moderately dispersed X.25 is available throughout the province. New ATM network will have nodes in nine cities.
Organizational infrastructure (2) Controlled Fujian Telecom dominates Internet access market and international connectivity.
Connectivity infrastructure (2) Level will soon rise as Fujian Telecom is upgrading X.25 network to ATM network..
Sectoral dispersion (2) Moderate Internet is most integrated in research and academic communities.
Sophistication of use (2) Conventional Internet is being .

5.1 Determinants of Internet diffusion of Fujian
The provincial government plays a similar role in Fujian as it does in Guangdong. China Telecom acts at the provincial level through the Fujian Post and Telecommunication Administration and at the city level through city bureaus. As noted earlier, the Fujian Post and Telecommunication Administration has chosen to implement a province-wide ATM network and is using DWDM over optical fiber.

The booming export-oriented companies are both investing in the Internet themselves and are paying their employees the type of wages with which they can purchase a computer and Internet connectivity for themselves or their family or both. The economy, also in turn, allows the provincial and city branches of China Telecom to invest in connectivity and information infrastructure.

There are over 8 million overseas Chinese of Fujian origin. Many reside in Southeast Asia in countries such as Malaysia and have done very well, some extraordinarily so. There are over 800,000 Chinese of Fujian origin in Hong Kong and Maccao. Eighty percent of the residents of Taiwan have ancestors who come from Fujian. These overseas Chinese, however, have been willing to invest in their homeland. Though there is no evidence that Fujian’s state-of-the-art communication network is being financed by overseas Chinese, it can be assumed that it is being built under the “build it and they will come” assumption. If a state-of-the-art network is deployed around the province, the businesses will spring up to use it. Fujian’s leaders want to build a strong economic power like Guangdong, so the provincial government and the provincial arm of China Telecom are investing a lot of money to provide state-of-the-art communications infrastructure throughout the province based on DWDM, SDH, and ATM.

As with Guangdong, the central government sees information technology as an essential tool for keeping track of the Fujian government and its export-oriented businesses. The Fujian provincial government is responsible for tax collection and managing relationships with the many Taiwanese businesses that have invested in manufacturing facilities in Fujian. As Taiwan integrates more and more information technology into its manufacturing facilities in Taiwan, Taiwanese investors in Fujian will have to choose between the payoff of closer inter-enterprise integration through information technology and the risks that enterprise information systems, which enable that integration, could be used by the central government to collect more taxes and limit undocumented trade.

6. Conclusion
Hong Kong and Taiwan have significantly higher diffusion ratings than Guangdong and Fujian for all six dimensions. This is to be expected given the higher per capita GDP of Hong Kong and Taiwan and their higher degree of integration with the West (see table 5).

Table 5: Comparison of Guangdong, Fujian, Hong Kong, and Taiwan

Popula-tion (in millions) GDP per capita Internet users per capita Level of…
Perva-sive-ness Geo-graphic dispersion Sectoral absorption Connectivity infra-structure Organiza-tional infra-structure Soph. of use
Guang-dong 71.43 $U.S. 01,342 01.12% 3 4 2 3 2 2
Fujian 32.39 $U.S. 01,254 00.46% est. 2 2 2 2 2 2
Hong Kong 06.71 $U.S. 26,800 22.36% 4 4 4 3 3 3
Taiwan 21.90 $U.S. 14,200 13.67% 4 4 3 3 3 3

Guangdong is ahead of Fujian because it was the first province in China to build a province-wide IP network. Fujian relied on its X.25 network longer. Now both are moving to provincial ATM backbones, which will quickly move them into Level 3 for connectitivity infrastructure and for Fujian into a possible Level 4 for geographic dispersion. Fujian and Guangdong continue to use the Internet as a substitute for conventional communications and have yet to begin to substantially reengineer business processes to leverage it.

Hong Kong has a significantly higher number of users per capita than Taiwan, in keeping with its status as one of the most wired nations in the world. There has been more real competition in Hong Kong’s ISP market than there has been in Taiwan. Hong Kong is further ahead of Taiwan in terms of opening up international links to competitition. Also, the different sectors of Hong Kong are slightly ahead of Taiwan in terms of hooking up organizations, but not by much. Tawian does have more hosts (424,209) under its top- level domain than does Hong Kong (98,183). Though this difference may at first be dismissed based on the popularity of registering under the “.com” domain, it may point to significantly greater interest in Taiwan on the part of SME’s of having a Web presence.

Both Hong Kong and Taiwan are behind Singapore in the rollout of broadband services. Regulatory and political problems have delayed the introduction of cable modems in Hong Kong. The choice to deploy one-directional modems in Taiwan, though a short-term technical solution, may not be so popular in the long run. Hong Kong will have a real challenge making the broadband market as competitive as its dial Internet market. Even then, the evidence is still not in that broadband deployment will drive the informatization of a country.

The slow speed at which the SMEs in Hong Kong have embraced both EDI and ERP suggests that Hong Kong will also be slow to integrate into the next generation of inter-enterprise information systems. The power of Hong Kong businesses as packagers depends on their incredibly flexible business networks that extend throughout Asia and the world. But with a focus on short-term profits and very little manufacturing capability in Hong Kong, that country’s businesses have been slow to invest in advanced information technology.

Taiwan, unlike Hong Kong, still has a manufacturing base. In the case of the electronics industry, Taiwan has been much quicker to adopt both electronic interchange and the enterprise systems to support that interchange. The managers of companies in this industry have often worked in Silicon Valley and have the willingness and the ability to reengineer their companies to leverage the power of the Internet and busines-to-business e-commerce. Taiwan is not only a node in the Global Silicon Network, it has the potential of being one of the best and fastest nodes on the planet for producing complex electronic products. The use of inter-enterprise information technology combined with the power of their business networks will be the key to their success.

Both Guangdong and Fujian have been slow to enter enterprise and inter-enterprise resource planning technology. There are two different drivers of B2B e-commerce in China. One is the drive for the central government to informatisize the economy. The second is the bottom-up desire to use e-commerce to open up new markets and improve the efficiency of doing businesses with old ones. These two drivers are not necessarily supporting one another. Given the present large “gray area” associated with operations of many sectors of the economy, businesses — especially those financed by Taiwan — are likely to resist efforts to make all their transactions transparent to the central government in Beijing. These businesses are under pressure from both the world economy and the Beijing government to move toward more advanced levels of information technology, but they are choosing to proceed slowly.

The challenge that the whole region faces is how to combine the speed and flexibility of Chinese business networks with the power of computer network technology. Taiwan businesses in their use of ERP, EDI, and Web-based ordering are taking the lead. Guangdong and Fujian will follow. It is up to Hong Kong to determine whether it is the best gateway for creating the new intermediaries and markets needed as East and West cocreate cyberspace.

Notes
[1] Seymour E. Goodman, Grey E. Burkhart, William A. Foster, Laurence I. Press, Zixiang (Alex) Tan, and Jonathan Woodard, The Global Diffusion of the Internet Project: An Initial Inductive Study, (Fairfax , VA: The MOSAIC Group, March 1998). The methodology behind the framework is available at http://www.agsd.com/gdi97/gdi97.html

[2] Peter Lovelock ‘E-China: Why the Internet is unstoppable China Economic Quarterly, Vol.3, No.1, first quarter 1999, pp.19-35.

[3] The Outlook Project, The Rise of the Global Silicon Network and the Growing Importance of Asia, Institute for the Future, Menlo Park, CA.

Source: http://www.isoc.org/inet99/proceedings/3a/3a_3.htm

It is ridiculous but it is what is happening here in China.

By the order of Ministry of Information Industry, google.cn start “rectify” its search engine service to so filer “ill” information. Since June 23, google.com was cut off in China, with only google.cn works here. Some of other services, such Gmail is also affected in some areas.

Data from www.cnnic.cn

China Internet Network Information Center (CNNIC), the state network information center of China, was founded as a non-profit organization on Jun. 3rd 1997.

CNNIC takes orders from the Ministry of Information Industry (MII) to conduct daily business, while it was administratively operated by Chinese Academy of Sciences (CAS). Computer Network Information Center of Chinese Academy of Sciences takes the responsibility of running and administrating CNNIC. CNNIC Steering Committee, a working group composed of well-known experts and commercial representatives in domestic Internet community supervises and evaluates the structure, operation and administration of CNNIC.

Main Business:

1．Domain Name Registry Service

In light of the authorization of the governmental authorities, CNNIC takes the responsibility of China’s domain name registry to operate and administrate “.CN” country code top level domain (ccTLD) and Chinese Domain Name (CDN) system.

2．IP Address and Autonomous System Number (AS Number) Allocation Service

As a National Internet Registry (NIR) of Asia-Pacific Network Information Center (APNIC), CNNIC initiated the IP Allocation Alliance, providing IP address and AS Number application services to domestic ISPs and users.

3．Catalogue Database Service

CNNIC is responsible for setting up and maintain the state top level network catalogue database, providing information search services of Internet user, web address, domain name, AS number and so on.

4．Technical Researches on Internet Addressing

For the sake of keeping pace with the global development of the Internet addressing, CNNIC carries out relevant technical researches and takes on technical projects of the state based on its administrative and working experiences on traditional network technologies.

5．Internet Survey and Relevant Information Services

Since the forming of CNNIC, it has actively carried out series of statistical surveys on the Internet information resources for public welfare. The authority and objectivity of CNNIC’s statistical survey reports were wildly recognized by domestic and international communities. Some of indexes were brought into the National Informatization Quotient (NIQ). Furthermore, CNNIC also provides the Internet technical query services, CNNIC certification trainings and issue website pageview certifications to the society.

6．International Liaison and Policy Research

As the national network information center (NIC), CNNIC maintains cooperative relationship with many International Internet Communities, working closely with NICs of other countries.

7．Secretariat of the Internet Policy and Resource Committee, Internet Society of China (ISC)

The aim of the committee is to stand on a forward position of the Internet development; actively participate in the research work on the domestic Internet development and administration policies; provide policy and legislation oriented suggestions to promote the healthy growth of China’s Internet; facilitate the development and application of Internet resources and relevant technologies; discuss on application and administration pattern of these Internet resources; perfect the survey of information resources on the Internet and relevant information services; unite with domestic Internet communities and carry out international communication and cooperation regarding Internet addressing technologies and administration policies.

2. During the period from January to February 2008, many x-rated indecent photos of some Hong Kong female entertainers were leaked to the Internet and disseminated quickly, which was known as the “Nude Picture Scandal”. It has started heated discussion on issues of the purification of the Internet environment and protection of personal privacy on Internet.

3. February 25, 2008, eight ministries and administrative offices jointly issued the Opinions on Intensifying Supervision over Internet Maps and Geographic Information Service Websites, requiring further regulations on the Internet maps and geographic information service websites. These eight ministries and administrative offices are: the State Bureau of Surveying and Mapping, Ministry of Foreign Affairs, Ministry of Public Security, Ministry of Information Industry, the State Administration for Industry and Commerce, General Administration of Press and Publication, State Council Information Office, and Administration for the Protection of State Secrets.

4. March 11, 2008, in accordance with institutional reform of the State Council passed at the 1st Session of the 11th National People’s Congress, the Ministry of Industry and Information Technology was set up under the State Council. Responsibilities of the former Ministry of Information Industry and the former State Council Informatization Office have been transferred to the Ministry of Industry and Information Technology which now becomes the administrative authority of the Internet industry in China.

5. April 28, 2008, commissioned by the Ministry of Industry and Information Technology, the Internet Society of China set up the “12321 Information Center of Indecent and Unsolicited Electronic Messages”, and the complaints and reports can be submitted via telephone calls, feedbacks on websites, e-mail messages, mobile phone texting and WAP.

6. Since May 2008, with the rapid spreading of SNS (Social Networking Service) websites as Kaixin (“being happy”) and Xiaonei (“on the campus”), SNS has become one of the most popular Internet applications in 2008.

7. As for relief news after the earthquake on May the 12th, 2008, in SichuanProvince, people.com, xinhuanet.com, chinanews.com and cctv.com had released about 123,000 pieces of news on the earthquake relief (including pictures, texts, audios and videos) by May 23, 2008, and played a leading role in news releasing; sina.com, sohu.com, NetEase and Tencent jointly released 133,000 pieces of news. The above eight websites received 11.6 billion hits on news with up to 10.63 million follow-up replies. The Internet played an important role in news releasing about earthquake relief, helping people find their missing kin, delivering aids and soliciting donations. The development of China’s Internet media has come to a new stage.

8. June 20, 2008, President Hu Jintao communicated with the Internet users on line through the ChinaForce BBS on people.com. As a key channel for information exchange, the Internet has attracted more and more attention of the government.

9. Up to June 30, 2008, the total number of Internet users in China reached 253 million, ranking first in the world for the first time. On July 22, the CN domain name became the world’s top national domain name with a large registration number of 12.188 million.

10. July 2, 2008, Beijing Administration for Industry and Commerce officially issued the Opinions on Strengthening Supervision and Administration over the Order of Electronic Commerce Market which provides that, from August 1, each profitable on-line shop must obtain a business license before business operation.

11. September 17, 2008, Premier Wen Jiabao made comments on the “reporting letter posted on a blog about concealing of deaths in the landslide accident in Loufan County, Shanxi Province on August 1”, requiring relevant authorities to carry out careful inspection and verification of the major accident of burst of a dam at a refuse ore. The function of Internet as means of supervision by public opinions has caught further attention of the central government.

12. September 28, 2008, according to the official reply to each local taxation bureau by the State Administration of Taxation, the incomes obtained by individuals purchasing virtual currency from Internet players and reselling to others with premiums should be subject to individual income tax, and a 20% individual income tax under the category of “income from transfer of property” should be levied.

13. From November to December 2008, the CCTV exposed successively the defects of the business operational model of two major search engines – Baidu and Google. It has triggered a crisis of confidence of the Internet users in those search engines, and advantages or disadvantages of the pricing on ads based on hitting employed in search engines have also become a hot topic.

14. December 22, 2008, sina.com announced an acquisition of the outdoor digital advertising business of Focus Media Group at a price of about 1.3 billion USD, which was so far the largest Internet purchase in China.

15. According to the statistics of China Internet Network Information Center (CNNIC), by December 31, 2008, the number of Internet users in China has reached up to 298 million with an Internet penetration rate of 22.6%. The number of the broadband Internet users has reached 270 million, accounting for 90.6% of the total. There are totally 16,826,198 domain names in China with 13,572,326 CN names, about 2,878,000 websites, and international bandwidth about 640,286.67Mbps.

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Forums
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CMS
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Why to register .CN domain name?
.CN domain names hold following advantages:
It is a distinct identifier, representing registrants’ value and orientation;
It has abundant naming space, much easier for people to obtain a satisfied domain name;
It complies with Chinese laws, which can fully protect users’ interests;
All its services are provided in Chinese language, which may protect users’ right to know;
It has simple and convenient registration procedures;
It is more secured in use;
It is in favor of maintaining the information security of national networks.

What kinds of domain names can be registered?
1) Second level domain names: domain names that are registered directly under .CN top level domain, e.g. cnnic.cn.
Advantages: simple and short, easy to be memorized, represents the concept of “China”.
2) Third level domain names: domain names that are registered under second level domains, such as .com.cn and .net.cn.
The third level domain is composed of two categories. One is called Generic domains, which are classified by characteristics of different industries. They are namely:
AC for academic institutions
COM for Industrial, commercial, financial enterprises
EDU for educational institutions
GOV for government departments
NET for networks, NICs and NOCs
ORG for non-for-profit organizations
MIL for military

You may select corresponding generic domain to register and use your third level domain name, e.g. abc.ac.cn.
Another category is called Administration Area domains, which represent administrative districts in China and comply with national standard promulgated by former National Technology Bureau. The category is composed of 34 administrative district names, corresponding with names of domestic provinces, autonomous regions and municipalities. For example, an institute in Beijing can register abc.bj.cn.

Is there any restriction for registering domain names?
All registered domain names must not contain following content:
1) Those that are against the basic principles prescribed in the Constitution;
2) Those jeopardize national security, leak state secrets, intend to overturn the government, or disrupt of state integrity;
3) Those harm national honor and national interests;
4) Those instigate hostility or discrimination between different nationalities, or disrupt the national solidarity;
5) Those violate the state religion policies or propagate cult and feudal superstition;
6) Those spread rumors, disturb public order or disrupt social stability;
7) Those spread pornography, obscenity, gambling, violence, homicide, terror or instigate crimes;
Those insult, libel against others and infringe other people’s legal rights and interests; or
9) Other contents prohibited in laws, rules and administrative regulations.

Where can I register .CN domain names?
CN domain name registrars provide specific registration services. You may select a local registrar to register your .CN domain name.

How to register a .CN domain name?
Based on the principle of “first come, first serve”, the registrant shall sign online (or written) registration agreement with the selected registrar.
According to the agreement, the registrant shall comply with the latest Internet-related laws and regulations, including but not limited to “China Internet Domain Name Regulations” and all other regulations promulgated by the authority department; CNNIC developed detailed domain name registration rules and domain name dispute resolution policies. The registrant shall also ensure the verity, nicety and integrity of the registration information he/she submitted.
Fill in the application form for domain name registration.
For registering .gov.cn domain names:
.gov.cn is only available for government departments to register.
Besides online registration process, the applicant shall also submit following written material:
1) The application form for domain name registration with official seal of registrant organization.
2) Relative material that may prove its identity of government department.
For registering .edu.cn domain names:
The regulations and procedures are developed by China Education and Research Networks (CERNET).

What domain name shall I register?
We recommend you using following information to decide your domain name:
Chinese/English abbreviation of the organization name;
Registered trade mark of the enterprise;
Slogan or advertising words;
Simple and interesting names, such as hello, howareyou, yes, 168, etc.

If the domain name I intend to apply had been registered by others, what shall I do?
If your applied domain name had been registered by other people, you may:
1) add additional hyphen, letters or numbers to make a new name;
2) negotiate with the registrant in person;
3) judge the domain name owner through dispute resolution procedures.

How to deal with domain name disputes?
Any organization or individual may claim on domain name dispute(s) to dispute resolution institution, when they deem their own legal rights and interests being breached by certain domain name registered by others.
You may consult with either of the two CNNIC accredited domain name dispute resolution institutions in details. i.e. China International Economic and Trade Arbitration Center and Hong Kong International Arbitration Center.

What issues should be addressed after registering a domain name?
1) Renew the domain name on schedule:
The domain name operation and management fee needs to be paid annually to the registrar; the regulation sets the renew deadline the same with the application date. CNNIC will cease resolving a domain name if the name fails to be renewed before the deadline; if no one renews the name in the next 15 days, it will be deleted from CNNIC database.
2) Inform the registrar of any changes on the registration information in a timely manner;
3) Preserve all passwords provided by the registrar, which is useful for changing your registration information and even the registrar.

How to use a domain name?
Establish an independent email system, making the domain name address available for all staff in the company to receive/send emails;
Establish a homepage based on the domain name;
Make promotions by post the homepage address on advertisements or name cards.

Owner/Investor Info

网站主办者名称
Name of the website owner
(could be company or person)

网站主办者性质
The site is owned by individual or company?

网站主办者有效证件类型
What is the valid identification document of the website owner?
(e.g., passport, ID card or registered business ID if it is owned by a company)

网站主办者有效证件号码
Passport ID or Identification ID
(Depends on what identification document you use)

投资者或上级主管单位名称
Name of website investor (could be the same of the owner)

网站主办者所在地市
Which Province/city (within China) the website owner is from?

网站主办者通信地址
Address of the website owner

经营类型
Operation type

联系人姓名
Contact Person Info

负责人姓名
Contact Person
(could be the same of the owner or investor)

有效证件类型
What is the valid identification document of the website own?
(e.g., passport or ID card )

有效证件号码
What is the valid identification document of the website own?
(e.g., passport or ID card )

办公电话
Office Phone of the contact person

移动手机号码
Mobile Phone (in China)

电子邮件
Email

网站名称
Name of the website

网站首页网址
Home page of the website

网站域名
Domain name of the site

网站内容类型
What kind of site it is
(blog, company profile, etc)

网站服务内容
What is the content of the site

负责人姓名
Contact Person

有效证件类型
Types of your valid identification documents
(e.g., passport or ID card )

有效证件号码
Passport ID or other Identification ID of the contact person

办公电话
Office phone number

移动手机号码
Mobile Phone (in China)

电子邮件
Email