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The Diffusion of the Internet in China

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The Diffusion of the Internet in China The Diffusion of the Internet in China by William Foster Seymour E. Goodman September 12, 2000 TABLE OF CONTENTS EXECUTIVE SUMMARY ........................................................................................................................... 1 INTRODUCTION.......................................................................................................................................... 4 INFORMATIZATION AS A KEY TO PROSPERITY AND STABILITY .......................................... 11 GOVERNING THE INTERNET IN CHINA ........................................................................................... 13 STATE COUNCIL.......................................................................................................................................... 13 HISTORY OF CONFLICT BETWEEN MPT AND MEI ...................................................................................... 13 State Council’s Steering Committee on National Information Infrastructure....................................... 15 THE STEERING COMMITTEE AND KEY INTERNET-RELATED ISSUES ........................................................... 16 THE MINISTRY OF INFORMATION INDUSTRY .............................................................................................. 16 CHINATELECOM AND THE QUESTION OF THE NATIONAL BACKBONE ........................................................ 17 LET THE SONS COMPETE............................................................................................................................. 18 Unicom................................................................................................................................................... 18 China Netcom........................................................................................................................................ 18 China Mobile Telecommunication Network .......................................................................................... 19 MII AND SARFT AND THE CONVERGENCE OF CABLE WITH THE INTERNET................................................ 19 INTERNET CONTENT PROVIDERS ................................................................................................................ 19 NEGOTIATING WITH THE WTO................................................................................................................... 20 VOICE OVER IP: CAN THE BUREAUCRACY KEEP UP WITH CONVERGENCE?................................................ 22 CLASS ONE AND CLASS TWO: THE NEW TELECOMMUNICATIONS REGULATIONS ....................................... 23 SECURING THE INTERNET ................................................................................................................... 25 ENCRYPTION............................................................................................................................................... 25 INFORMATION CONTROL ............................................................................................................................ 26 PROSECUTIONS ........................................................................................................................................... 30 Lin Hai ................................................................................................................................................... 30 Tunnel .................................................................................................................................................... 30 Falun Gong ............................................................................................................................................ 30 NATIONAL SECURITY.................................................................................................................................. 31 CULTURAL SECURITY AND PRESERVATION ................................................................................................ 32 COMPUTER CRIME ...................................................................................................................................... 33 LEGISLATION AND REGULATIONS............................................................................................................... 34 INSTITUTIONS ............................................................................................................................................. 36 PROSPERITY.............................................................................................................................................. 38 DIMENSIONS OF INTERNET DIFFUSION IN CHINA....................................................................... 42 PERVASIVENESS.......................................................................................................................................... 42 GEOGRAPHIC DISPERSION .......................................................................................................................... 43 SECTORAL ABSORPTION ............................................................................................................................. 44 CONNECTIVITY INFRASTRUCTURE.............................................................................................................. 46 Backbone Infrastructure ........................................................................................................................ 46 Exchanges .............................................................................................................................................. 47 Access Methods...................................................................................................................................... 48 International Circuits............................................................................................................................. 48 ORGANIZATIONAL INFRASTRUCTURE ......................................................................................................... 49 ChinaNet and the Multimedia Network ................................................................................................. 49 Golden Bridge Network ......................................................................................................................... 50 i Local Internet Service Providers ........................................................................................................... 50 CERNET and CSTNET .......................................................................................................................... 50 Organizational Infrastructure Ranking ................................................................................................. 51 SOPHISTICATION OF USE............................................................................................................................. 52 SUMMARY................................................................................................................................................... 53 INTERNET DIMENSIONS OF GUANGDONG ................................................................................................... 58 UNIQUE FACTORS INFLUENCING GUANDONG’S INTERNET DIFUSSION ....................................................... 63 DETERMINANTS OF INTERNET DIFFUSION IN CHINA................................................................ 66 ACCESS TO THE INTERNET .......................................................................................................................... 67 Individual Access to the Internet............................................................................................................ 67 ISP Access to the Internet backbone...................................................................................................... 68 COST OF INTERNET ACCESS........................................................................................................................ 68 ISP Costs for Accessing the Backbone................................................................................................... 69 EASE OF USE............................................................................................................................................... 69 PERCEIVED VALUE OF THE INTERNET......................................................................................................... 70 Perceived Value by Organizational Users............................................................................................. 71 Perceived Value by Government Entities .............................................................................................. 72 ADEQUACY AND FLUIDITY OF RESOURCES ................................................................................................ 73 LEGAL AND REGULATORY FRAMEWORK.................................................................................................... 74 ABILITY TO EXECUTE ................................................................................................................................. 74 GEOGRAPHY ............................................................................................................................................... 75 DEMAND FOR CAPACITY AND CONNECTIVITY............................................................................................ 75 MULTIPLICITY OF ISPS AND SERVICES PROVIDED...................................................................................... 76 CULTURE OF ENTREPRENEURSHIP .............................................................................................................
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