A Historical Leap Forward in China Information Industry

Ministry of Information Industry, People's Republic of China
September 14, 1999

China information industry has followed a long and tortuous course in its development process. It has made tremendous achievements that enjoy worldwide attention after fifty years' unremitting efforts since the founding of the People Republic of China in late 1949. Especially, the great practice of the reform and opening to the outside world and the modernization drive starting from the late 1970s has given impetus to a boom to all sectors of economy, including the information industry, and brought about a historical leap forward and the enhancement of the overall strength in both posts and telecommunications, and the electronics and information industry.

The postal sector has taken on an entirely new look, having, as of end-1998, 84,000 postal offices and establishments (3.2 times more than the figure for late 1949, when New China was founded), 20.23 million square meters of production housing, 66.8 billion yuan of fixed assets, 33,233 postal vehicles, 535 railway carriages, 11 ships and 3 airplanes, and 2.85 million kilometers of postal routes. Integrated utilization of multiple transportation means including aviation, railways, highways and waterways has been basically realized. A relatively independent high speed postal network has been formed. Technical content of postal services has been increased with the remarkable improvement of mechanization for mail processing and computerization of counter operations. Now, China has 16,272 computerized branch post offices and 106 letter sorting machines. The national computer network for postal savings has covered 527 counties (cities) of 31 provinces, providing remote access service at 5,840 postal savings stations. Express mail service (EMS) is available in 1,983 cities, of which 201 cities are interconnected via the EMS inquiry system. China? EMS is internetworked with 26 countries and regions in the world. The range of postal services has been expanded, covering the four categories of mail, distribution of newspapers and journals, philately and postal savings and postal remittance, and providing recently new services such as advertisement letters, mail-order, protocol service, E-mail, postal audio and video and insurance by proxy. In 1998, the country postal volume handled and turnover earned totaled 16.6 billion and 28.7 billion yuan respectively, a rise of 123 and 463 times over late 1949), and the labor productivity came to 62,000 yuan/person. Quality of service in the postal sector has also been greatly improved. Each postal office or establishment served an area of 93.9 square kilometers and 12,200 people on the average. The annual amount of mail items sent per capita averaged 6 items, 4.5 times more than in 1949. Over 95% of buildings are accessible to postal services and 99.8% of the mails enjoyed on-time delivery. Provincial capitals are largely able to deliver morning newspapers in the morning. Internationally, by end-1998, China had established direct postal relations with 145 countries and regions. International EMS is accessible to nearly 200 countries and regions and international postal remittance service with 18 countries.

Telecommunications has become one of the fastest developing sectors in China. Supported by the government sector policy, the sector has enjoyed a growth rate faster than that of the national economy for 15 successive years, with 10, 20 and even 30 percentage points higher than that of the growth rate for the 7th, 8th and 9th Five-Year-Plan periods respectively. China? telephone network ranked second in capacity in 1998 from the seventeenth in 1985 while the telecommunications sectors made up 4.9% of the newly added GDP value and 6.1% of total investment in the fixed asset of the country. The telecommunications network has undergone a qualitative change in terms of capacity, technology and service. A national public telecommunications connected to all parts of the world has been formed, using various advanced technologies including fiber-optics, digital microwave, satellite, SPC switching, etc. In 1998, the telecommunications sector had fixed assets worth 463.7 billion yuan, and as of July, 1999. it had 1.69 million long distance traffic circuits (590 and 87 folds more than in 1949 and 1978 respectively), 4.83 million circuit terminals for capacity of long distance automatic exchanges (2,590 folds more than in 1978), 147 million main lines for capacity of telephone exchanges ( 435 and 33 folds more than in 1949 and 1978 respectively). The completion of the chess-board shaped public fiber backbone network, composed of 8 east-to-west and 8 north-to-south fiber-optic cables has brought the length of the country fiber-optic cables to 1 million kilometers. Several international land and submarine optical cables have been laid, for example, the China-Japan and the China-ROK submarine optical cables and the Trans-Asia-Europe Land Optical Cable. The mobile, data and multimedia networks have expanded in size. With the transition from manual to automatic, from analog to digital and from single to multi services, the telecommunications network has ranked with the internationally advanced in terms of technical installations. SPC exchanges have accounted for 99.8% of the country central office telephone exchanges and 99.6% of long distance transmission has been digitized. Advanced technologies like SDH, digital mobile communications, dense WDM, etc. have found wide application and high and new technologies like B-ISDN and ATM are on trial over the network. In 1998, the country had 110 million telephone subscribers (of which 24.98 were mobile ones) in total, an increase of 57 times over 1978, bringing the overall teledensity to 12.06% in July, 1999 from 0.07% in late 1949 and 0.38% in 1978, and the teledensity for cities to 28.2% in July, 1999. Now, 67% of the country administrative villages are accessible to telephone service. Besides, various computer-based information networks and real-time transaction networks have been set up via the public telecommunications network by institutions in such sectors as finance, taxation, the Customs, securities, trade, education and science and technology. By July, 1999, China had a total of 4 million Internet subscribers and had launched almost all new telecommunications services that are available elsewhere in the world.

In addition, the average time-limit for installation of a telephone has been reduced to less than one month and at the same time marked improvement has been made in collecting call charges, handling inquiries and counter service. Coincident with the boost, restructuring in the telecommunications sector has been going deeper with competition being progressively introduced in the market and funding channels becoming wider. By end-1998, China had used in the telecommunications sector foreign loans accumulating to 7 billion US dollars, and in the previous year, China Telecom (Hong Kong) was offered publicly in stock exchanges in Hong Kong and New York City, raising capital totaling 4.2 billion US dollars. The 1998 average turnover per person of the telecommunications enterprises rose to 448,000 yuan. In 1998, each worker maintained an average of 197 main telephone lines and by July, 1999, this figure had exceeded 200 lines.

The electronics and information manufacturing industry has become one of the pillar industries in the country. After many years effort, the electronics industry in the country can now manufacture products for both military and civilian use, and has rationalized the proportion of its three major categories of products and allowed several ownerships to be co-existent. Now, a relatively complete manufacturing system of electronics has been established to provide large amounts of electronic installations and a cross-section of electronic products. From 1980 to 1995, total value of the electronics industry went up from 10 billion to 249.1 billion yuan, an increase of 24.9 times and the profit and tax generated from 1.505 billion to 12.71 billion yuan an increase of 8 times. In 1998, total output value of the electronics industry jumped further to 547.75 billion yuan, ranking fourth in the world, averaging an annual growth rate of 24% on the basis of the 1952 output value. China is second to none in outputs of TV sets, audio systems and telephones and a number of components and devices, with the penetration of color TV sets for cities reaching 100.8 sets per hundred households and that for rural areas 27.2 sets (overall rural penetration of TV sets being over 70 sets). R&D and manufacture of SPC exchanges and innovative components and devices have reached a certain scale and level. The electronics industry has also become a major sector that earned foreign exchange through exportation of its products. In 1980, the export volume of the electronic products was only 10 million US dollars in value, whereas in 1998, this figure soared to 25.67 billion US dollars, representing 14% of total export value of the country.

Technologically, in R&D of the electronics sector, quite a lot of research results stand at the world? leading edge. Since the early 1990s, when the electronics industry came to the stage of digital technology, China has broken through in high-end series personal computers and servers, large-scale parallel computer systems, Chinese electronic publishing systems, large-scale SPC exchanges for central offices, mobile communications systems, SDH WDM fiber communications systems, thin route satellite communications systems, new generation digital video terminals, manufacturing technology for 0.8-0.35 m CMOS integrated circuit chips, etc. A number of research centers for key projects, R&D centers and industrial test facilities and state-level labs have been set up. Military electronics has registered significant progress, strengthening considerably the capacity to form complete sets of installations. Telemetry and telecontrol systems for satellites, satellite borne payloads, solid-state remote surveillance radar, integrated electronic war systems, etc. have approached or reached the internationally advanced level. The successful production of several key components and devices used in space flights, aviation, warships weapons and electronic and special experiments have filled the country blank, contributing to the building-up of national defense. Now China has over 12 million computers in use, which have greatly facilitated the transformation of conventional industries and improved economic benefits and efficiency of various sectors.

Since the implementation of the reform and opening up policy in 1978, adhering to the guideline of combining the introduction and absorption of foreign technology with the creation of our own technology, China? information industry has realized the digitization of telecommunications in as short as more than a dozen years, which had been done by many other countries for several decades. Besides, we have effectively converged the telecommunications industry with electronics manufacturing industry to promote both of them to develop in parallel. It took us ten years to transit from the importation of the first 10,000-line SPC telephone exchange to putting in the market the first exchange with the same capacity developed by ourselves in 1992, and it took only four years for us to transit from the importation of the first GSM system to the production of self-developed GSM systems. In the development of 2.5 Gbit/s high speed optical communication systems and broadband ATM switching equipment, we are only 1-2 years behind the world advanced level. In 1998, Chinese-made systems comprised 98% abd 50 % plus of the total number of newly installed telephone exchanges and optical transmission equipment respectively.

As the world is approaching the information age at the turn of the century, China is accelerating its pace in the informatization process and will certainly take an even greater leap forward in its information industry.