Organizer: Eric Harwit, University of Hawaii
Chair: Richard P. Suttmeier, University of Oregon
Discussants: Hugo Shong, IDG-Asia; Hui Pan, Information Gatekeepers, Inc.
China’s post-Mao leadership was quick to grasp the importance of high technology industry to its economic development. By the late 1990s, efforts to develop state-of-the-art telecommunications and computer systems converged into the effort to recast China as an "information economy," developing the information technology (IT) industry into a world contender while using computer networks and networked information to make rapid progress in all sectors. The strategy’s success hinges upon resolving conflicts between local and national policy goals, spurring the growth of entrepreneurial companies, and somehow integrating the new technologies with existing political and social patterns. The papers on this panel focus on the three key components of the IT industry to illuminate these processes.
Eric Harwit focuses on telecommunications in a region that has played a leading role in this sector. In rapidly developing Shanghai, openness to foreign technology clashes with national goals of industrial protectionism. The metropolis also challenges central prerogatives over development of the telecom-munications industry, and hopes to utilize the vast revenue potential of modern telecommunications to further fuel its growth.
Kathleen Hartford examines the developmental fortunes of the potential national champion firms which have grown from computer assemblers into full-fledged IT companies. Their pursuit of market success while navigating among central and local state policies, competitive challenges from foreign IT giants, and rapid changes in the technology itself, will largely determine whether China’s 21st century economy can break free of technological dependence.
Finally, Alex Zixiang Tan’s work looks at the cutting edge issue of Internet development in China. He explores the social imperative linked to this vital technology, and charts the conflict within the Chinese leadership over economic utility versus tight control over information dissemination. This paper describes the attempts at balancing technology acquisition with maintenance of social and political norms and values.
Taken together, these papers paint a comprehensive picture of the problems a centrally guided economy faces in devising a scheme for information technology-based growth.
Telecommunications in Shanghai: Contributions of Communications Technology to Economic and Community Growth
Eric Harwit, University of Hawaii
Since 1988, Shanghai has emerged as China’s most rapidly growing urban center. Domestic and foreign investment are transforming the city into the country’s new financial, transportation, and manufacturing leader. The development of telecommunications in the city has followed Shanghai’s rapid strides forward, and contributed to a new and important sense of community among citizens of the metropolis. This paper will examine key elements of the sector’s growth in Shanghai, and spot trends that will shape future progress in the municipality.
The essay will begin with a brief discussion of Shanghai’s communication growth over the past decades. It will note the useful infrastructure already in place at the communist takeover in 1949, and the neglect of the sector for the following forty years.
Government policy has been the driving force behind change in the past decade, and the paper turns next to a focus on national and regional political organizations and their roles in spurring telecommunications growth and community citizenship among the city’s population. The paper looks at the tensions between the local, ministry-level, and top central government leaders (many of whom were born in the Shanghai region) in developing coherent policy for the city. This section will also spotlight the key local and national leaders who have influenced telecommunications development.
The next section of the paper will examine the role of foreign investors in the city’s telecom sector. It traces the major roles foreign companies have played in facilitating the industry’s growth, and notes problems foreign operators have had in entering the market.
The paper’s conclusion will turn to the major role telecommunications will play in the overall development of Shanghai as a major player in China’s future economic growth, and the ways community cohesiveness has been strengthened by the technology’s growth.
Creating Contenders: State and Entrepreneurs in China’s Globalizing Information Technology Sector
Kathleen Hartford, University of Massachusetts, Boston
IBM. Microsoft. Fujitsu. Hitachi. Legend?
China’s "new" computer companies have undergone numerous metamorphoses driven by technological change, foreign competition, and state policy. The newest thrust of government policy—intended to create a 21st-century information economy—has created a new set of opportunities and challenges for China’s computer/information technology (or "IT") firms. "Informationization" has increased demand for their wares; but the technological edge of foreign firms could force China’s information economy to play perpetual catchup against the world’s technology leaders.
The national government has recognized this challenge by attempting to nurture several national champions. Major economic regions have set their own IT priorities. Several Chinese IT firms, meanwhile, have already set themselves highly ambitious goals that outstrip the state’s own.
How do state policies and individual firms’ competitive moves shape the sector’s development? The paper briefly summarizes the rapid changes in the structure of the global IT industry and the developmental histories of Legend, Stone, Founders, and Great Wall, some of China’s leading contenders, and then focuses on the evolution of each in recent years. It explores the use that each has made of central and local state policies, alliances with foreign companies, and its own peculiar characteristics. Drawing on interviews with executives in these firms, their competitors and their partners, the study compares the perceptions and the reality of the roles played by firms’ own strategic moves and by state-sponsored measures in constructing world-class IT in China.
Internet Development in China: Economic and Technological Imperatives vs. Political and Social Caution
Alex Zixiang Tan, Syracuse University
As the Internet gains rapid global popularity, China has also decided to join the bandwagon. Internet use in China began its substantial growth in 1994, with about 1,600 users by the end of that year. By June of 1997, the total number with access to the network had leapt to 150,000, and there are predictions of 2.7 million Chinese on the network by the year 2001.
As a flagship of information technology, the Internet falls into the high-technology category China has committed to develop; the PRC sees that high technology is the driving force for the country’s further economic growth. However, the Internet has evolved into the most powerful global medium the world has ever known. Unlike other high technologies such as microelectronics and the biological sciences, the Internet is capable of functioning as a means to publish, distribute, and broadcast information across national boundaries.
Because of the substantive differences between Chinese and Western social and political systems, the expansion of China’s Internet presents significant political and social challenges. Perhaps foremost among these, the Internet gives Chinese users access to Western materials that are considered either antithetical to the political system, or socially immoral by Chinese government standards. Given this dilemma, China faces an important challenge of balancing the Internet’s economic and technological benefits with the network’s political and social risks.
This paper first discusses the economic and technological benefits and political and social concerns brought by the expansion of China’s network. It then presents and examines China’s efforts to balance the two sides of the issue. The paper will conclude with possible future scenarios of China’s Internet development.