In their discussions, lawmakers and political consultants, of whom many are scholars and experts, were very upbeat about the development of the country's fledgling IT industry, insisting that "Digital China" will pave the way to China's future prosperity.

In his report, the premier impressed the audience by announcing that in the next five years, China will speed up the development of infrastructure for the IT industry and promote the use of information technology in different sectors, so as to bring about an integration of industrialization and the IT industry in the country.

"It is the first time that the government has listed an industry as a separate item in a five-year plan," said Hu Qiheng, a CPPCC National Committee member and an automatic-controls technology expert. She believes that it is a very important sign, indicating the government's determination to achieve rapid economic growth by boosting the IT industry.

According to the new five-year plan, China will exert greater efforts to develop broadband information networks across the country and an IT products manufacturing industry, in a bid to accelerate the development of the national economy as a whole.

In the next five years, China will accelerate development in the fields of super large scale integrated circuits (SLIC), high- powered computers, large-scale system software and super-speed networking systems, at a growth rate of 20 percent. These sectors are expected to account for 8 percent of China's GDP.

In the coming 10 years, domestic software companies and integrated-circuit products will enjoy actual low tax rates of 3 percent and 6 percent. That is to say, they will get refunds, based on the favorable rates, immediately after they have paid the 17 percent value-added tax imposed on all businesses.

In the past Ninth Five-Year Plan period (1996-2000), China witnessed a rapid growth of its IT industry, four time that of the national economy as a whole.

For a developing country, whether or not it can extensively apply IT has a direct bearing on whether or not it can become industrialized and modernized.

However, the level of IT application in China is quite low compared with the situation in developed nations. According to statistics, in 2000, Americans spent US$561 billion purchasing information technology and equipment, while the Chinese spent only US$19.9 billion in this area. This indicates a striking "digital gap" between the two countries.

China must try to achieve an information-based industrialization and enhance productivity and international competitiveness, by developing infrastructure for the IT industry, developing e-commerce, and adopting intelligent industrial equipment, said Zhang Fuliang, a CPPCC National Committee member.

An information-based society is not confined to the building of infrastructure for information technology or simply developing the IT industry, the expert said, noting that the kernel for an information-based society is to change the ways of economic operation, social operation, government operation.

In the past few years, Shanghai, Beijing and Shenzhen have spared no effort in developing an IT industry as their No 1 economic pillar.

While many experts and scholars are beating the drum for the " Digital China" concept, some of the lawmakers and advisors have asked people to cool down.

Among them is Duan Yongji, a CPPCC National Committee member and president of the Beijing-based Stone Group, one of the leading companies in China's IT industry. "Network economy does not mean an economy developed under the concept of networks, but one which is developed by using networking technology, or in other words, by transforming traditional industries with information and networking technology," he noted.

Duan pointed out that the main obstacle for building up a "Digital China" comes from a fragmentation of the industry characterized by the existence of separate information technology centers established by different enterprises and government departments, which is contrary to the nature of networking technology.

Instead of "each doing his job in his own way," networking technology is aimed at mutual connections and communication, broadness, and boundlessness, as well as a speedy exchange of information, he said.

(Xinhua 03/20/2001)