China’s Internet Issues

Social-political factors complicate digital development.

Trend Description

Three familiar internet issues in China have begun to interact in an interesting way - the rural/urban digital divide, the growing popularity and success of online games, and the role of internet cafes as both a provider of access and monitor of online behavior.

Case Studies

Digital Drivers

While the internet user population in China is surging – up 23 percent last year to over 140 million users – its social demographics remain, like most things in China, totally asymmetrical. China’s biggest cities are estimated to contain about a quarter of the population, but over three-quarters of internet users. Seen another way, China’s urban internet penetration is now about 20 percent, compared to about 3 percent in rural areas. Bringing the internet and computer literacy to the countryside remains on the Party’s long list of rural development issues.

Internet Cafes

While home computer use is also surging – 76 percent of China’s netizens say they go online from home – nearly a third of Chinese internet users also go online from internet cafes. The number is much higher, up to 80 percent, in rural china, where buying a home computer is totally impossible. Internet cafes have been critical, not only in effecting rural internet penetration, but also as instruments in Beijing’s control of internet content and usage.

With a general reputation as dens of iniquity, Chinese net cafes are variously shut down, fined, opened, and reopened, either legally or illegally. At the beginning March, the Chinese government announced that no new cafes would be allowed to open in 2007. Some cafes have been instructed to record patrons’ identities and surfing history, and time spent online.

Image source: China Daily

Online Games

Over a quarter of China’s young, male internet users are online gamers, compared to 21 percent in the US. Online games are a controversial topic in China, with countless newspaper articles reporting the threat and cost of online game addiction among China’s youth – it is widely reported that two million young Chinese internet users are currently addicted to online games. There are now a handful of expensive internet addiction treatment centers operating around the country, described as no-nonsense, quasi-military institutions. Reading between the lines of extreme reporting and commentary seems to lie a general dismay among parents that their tech-savvy kids are distracted by games, and among the government that its youth is straying into unhealthy, immoral pursuits.

Despite being condemned for its evils, however, China’s online game industry is simultaneously hailed for its amazing growth in 2006 (nearly 75 percent by revenue), and celebrated as one of the “most vibrant and profitable sectors” in China’s economy. The excitement / tension is almost palpable, as people discuss the value of game quality v. business models and try to solve money trading issues while keeping one eye on government regulations and potential crackdowns.

Image source: China Daily

Trend Impact

Looking ahead to an integrated resolution of these internet issues is, as with most things in China, extremely difficult. Business, government oversight, political pressures, market demand, and social and economic development issues are all key factors in China’s internet evolution.

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