China's Information Industry in the First Half of the Year 2000

Ministry of Information Industry

July 13, 2000

In the Year 2000, China's information industry has made great efforts on in-depth reform, structural readjustment and service improvement, which led to the sustainable, fast and sound development of the industry as a whole.

The P&T operating sector achieved a revenue of 123.47 billion yuan from January to May, 2000, 27.1% higher than the same period in the previous year. The postal sub-sector achieved 16 billion yuan, an increase of 17.5% over that of the previous year and the telecom sub-sector, 107.49 billion yuan, a 28.3% increase. The investment in P&T fixed assets totaled 29 billion yuan, an increase of 25.9% over the same period in the previous year. Fixed line telephone subscribers reached a total of 124 million (14.967 million new ones); mobile subscribers, 56.059 million (12.764 million new ones); data and multimedia communications users, 5.578 million (1.974 million new ones) and Internet users base has exceeded 10 million. The scale of fixed network and mobile network ranks the 2^nd and the 3^rd in the world, respectively. With further enhanced transmission capability of the basic communications network, we saw the rapid development of various new services and evident improvements in service quality.

The electronics and information product manufacturing sector achieved a sales revenue of 200.7 billion yuan from January to May, 32.7% higher than the same period in the previous year, with the production-sales ratio reaching 95.9%; the exports delivery totaled 59.94 billion yuan in value, an increase of 43.5% over the same period in the previous year. Since the beginning of this year, the electronics manufacturing enterprises have made active readjustments in their product mix so as to adapt to the rapid changing market environment both at home and abroad. The manufacturing of investment-oriented products continues to grow rapidly and the investment-oriented products, consumption-oriented products and electronic components account for 39.4%, 31.8% and 28.8% respectively. The sector's economic returns and exports both achieved a high growth rate. From January to May, the micro-computer output hit 2.08 million sets, an increase of 102.4% over the same period in the previous year; the SPC exchange output, 17.97 million lines, a 32.9% increase; mobile phone, 18.86 million sets, an increase of 143.3%; integrated circuit, 1.1763 billion pieces, a 63.29% increase and color TV, 14.58 million sets, a 2.3% decrease.

New progress has been made in national informatization. There are a total of more than 2 million computers in China. As the construction of basic networks picked up its speed, the public information network now covers most of the cities in China. The establishment of the Internet Exchange Center had raised the backbone network interconnection bandwidth from less than 10Mb/s to 155Mb/s and the international gateway bandwidth to more than 700Mb/s. The problem of insufficient Internet bandwidth has been partially solved. In order to promote e-commerce applications, an E-commerce framework has been proposed. After the "Government on Line" project last year, the "Business on Line" project was launched, which encourages businesses to engage in e-commerce activities on Internet. Now there are 34,000 registered domain names in the business category, accounting for 80% of the total. The number of e-commerce websites for consumers has exceeded 1,000. The e-commerce trade volume is expected to reach 800 million yuan this year and 10 billion yuan in 2002 after a period of dramatic growth.

Further deepened reform. In the first half of 2000, China Telecom and China Mobile were officially established; ChinaSat's organization plan has been approved by the State Council and the telecom departments at provincial level have basically finished the separation of government functions from business management. In China's telecom market, a competition mechanism is taking shape on different levels and in different services. The incumbent telecom enterprises are accelerating the establishment of modern enterprise system and the transformation of operating mechanism. The emerging telecom enterprises are growing rapidly with government support. The vitality of both the enterprises and the sector as a whole is greatly enhanced. Up to now, the separation of telecom operators and information product manufacturers from the Ministry of Information Industry (MII) has been finished. MII has no more direct control over enterprises and is fully engaged in sector regulation. A group of large-sized state-owned enterprises such as Panda, Hualu, Huajin, etc have eliminated losses, shaken off the predicaments and are starting to make profits with the adoption of various measures including formulation of modernized enterprise regulations, diversification of stock ownership, conversion of debentures into stocks, minimization of accounting units and introduction of competition mechanism in job distribution for the employees. Facing the challenge coming along with the entrance into WTO, a group of equipment manufacturing enterprises further tap the international market by opening up actively and combining export products and equipment with export production line, establishment of joint ventures and undertaking of network construction.

Sector Management is Further Enhanced. The guideline of the "Tenth-Five-Year" Plan and the framework of long-range objectives for the year 2010 were formulated for information industry, the main tasks of which are as follows:

1. Great efforts have been made in the construction of national information infrastructure, high-speed broadband transmission network and high-speed Internet. We have been effectively using the information resources to promote the integration of telecommunications, broadcasting and computer networks, improve the universal communications service level and accelerate the process of informatization in the western area.
2. The development of information technology and information industry has been accelerated. We have been improving the capability of informatization, eliminating the bottlenecks in the development of integrated circuit and software industries, promoting actively the application of digital technologies and enhancing the capability of technological innovation and product updating.
3. Efforts have been made to promote the application of information technology in various sectors of national economy. We have been implementing the informatization procedures in the national economy, social life and businesses by the restructuring of traditional industry and overall planning of the major information projects. In order to accelerate the development of software and integrated circuit industries and facilitate the industry restructuring and digital equipment updating, the State Council has recently formulated several policies to encourage the growth of software and integrated circuit industries and to enhance the technological innovation and international competency of the Chinese information businesses. The Ministry of Information Industry is now working hard to formulate the relevant rules of implementation. Together with the Ministry of Education, the Ministry of Science and Technology and State Bureau of Taxation, MII has been setting up the certification standard for software enterprises. MII has also drafted a catalogue of duty-free integrated circuit goods with the cooperation of the State Development Planning Commission, MOFTEC and the General Administration of Customs. Meanwhile, we have made great efforts in formulating the information laws and regulations so as to meet the challenges coming along with China's foreseeable entry into the WTO. The Telecommunications Administration Regulations is now under the examination and approval of the State Council. At the same time, more efforts have been made in market access, interconnection and interoperability as well as in the tariff regulation. In the beginning of this year, the Telecommunications Service Standards was made public to further improve the quality of services. The information industry is the necessity and pillar of the national economic growth. Therefore, in response to the state's plan of "developing the west of China", we will focus on the communications infrastructure construction and industry restructuring in the west with the application of new information technologies, driving the economic growth in the region.

Present at the press conference are:

Mr. Cheng Guanghui Director-general of the General Office and Spokesman of MII

Mr. Liu Cai Director-general of the Department of Policies and Regulations, MII

Mr. Jiang Shaobing Deputy Director-general of the Department of Planning, MII

Mr. Zhou Baoxin Deputy Director-general of the Telecommunications Administration Bureau, MII

Mr. Zhang Xiaotie Deputy Director-general of the Department of Financial Regulation and Clearing, MII