Information and communication technologies (ICT) are vital to
managing China's unprecedented growth challenges, according to a
new
World
Bank study titled
China's Information Revolution: Managing
the Economic and Social Transformation. This report, the first
to comprehensively map out China's current ICT landscape, provides
a forward-looking assessment of the state of the country's ICT
preparedness.
China has the world's largest telecommunications market and its
IT industry has been an engine of the country's economic
growth--growing two to three times faster than GDP over the past 10
years. However, as China's development has entered a new stage, it
requires an updated "informatization" strategy to reflect the
current economic and social challenges as well as opportunities. If
China is to reap the full benefits of ICT, the report says, it
needs to deal decisively with several key issues.
"China is serious about putting in place a good foundation for
equitable and sustainable economic growth" said Jim Adams, World
Bank Vice President for the East Asia and Pacific region. "This
report reinforces how important to that effort is a well
thought-out ICT strategy that brings the benefits of the online
world closer to everyone's daily lives."
The report says that legal and regulatory reforms are urgently
needed in areas such as telecommunications, open access to
government information, data protection and privacy. A stark
urban-rural divide in access to telecommunications infrastructure
puts internet penetration 40 times higher in urban areas compared
to rural. It also says the domestic ICT industry needs more
innovation so that it moves up the value chain and beyond
production of low-end products and applications.
Currently, software exports account for just 1-2 percent of
China's total IT industry exports -- reflecting China's comparative
strength in IT manufacturing and weakness in software development.
Furthermore, only 16 percent of teachers in China have ICT
training, resulting in a major shortage of skilled ICT workers.
'Brain drain' further exacerbates this situation.
According to the report, China also stands to benefit from
expanding into e-government as online applications could make
government functions more service-oriented, efficient and
transparent. Rural areas in particular can benefit from online
information services. Fostering e-business can boost productivity,
increase technological innovation and enhance international
competitiveness of Chinese enterprises. A 2004 Ministry of Commerce
survey of 838 firms found that 58 percent of those that had
participated in e-commerce increased their number of supplier
contacts, while 70 percent increased their number of client
contacts.
"Given the cross-cutting nature of ICT, government decisions
about ICT can also be seen as decisions on the course of the
economy as a whole" said Mohsen Khalil, Director of the World Bank
Group's Global ICT Department.
"The issues affecting China's ICT policies and strategies are
similar to those faced in other sectors. The rapid pace of
technology development just means that ICT issues are being
addressed before other problems, and that the effects of ICT
development will be felt throughout the entire economy," he
said.
Highlights of the report:
? China has the world's largest telecommunications market, and its
IT industry has been an engine of economic growth, growing two to
three times faster than GDP over the past 10 years.
? ICT could make government functions more service-oriented,
efficient and transparent; to make markets and resource allocations
far more efficient to sustain growth; and to enhance productivity,
international competitiveness and capacity for technological
innovation of Chinese enterprises.
? Four key enablers and building blocks for achieving China's
informatization priorities are:
1) Legal and regulatory framework
2) Telecommunications infrastructure
3) ICT industry; and
4) Levels of IT literacy and ICT skills.
These enablers, supported by strong leadership, should aim to
transform administrative and business processes into automated,
streamlined processes that support the two pillars of ICT
applications: e-government and e-business.
? Several challenges, if not addressed properly, would impede
China's informatization progress:
1) A coordinated institutional approach is vital to respond to the
increasing trend of convergence.
2) Digital divide in China may intensify the rising inequalities in
income and opportunities;
3) China relies heavily on foreign technology and expertise;
4) ICT skills are not strong enough to reap the benefits of
informatization; and
5) Large-scale ICT applications projects have yielded limited
results.
? These key issues need to be addressed decisively in the second
half of this decade, through policies entailing institutional
reform, to trigger broader changes. Policies should set an overall
vision and direction for the sector, while not being overly
prescriptive in order to allow for technological innovation. China
would benefit from achieving a balance between government
regulations and free market dynamics, and matching the supply and
demand of commercially successful applications.
? Given the cross-cutting nature of ICT, government decisions
about ICT can also be seen as decisions on the course of the
economy as a whole.
? The issues affecting China's ICT policies and strategies are
similar to those that the country will face in other sectors. The
rapid pace of technology development just means that ICT issues are
being addressed before other problems, and that the effects of ICT
development will be felt throughout the entire economy.
(China.org.cn April 27, 2007)
