By Hu Qiheng

Chairperson of the Internet Society of China

Your Excellency Vice Minister Qian Xiaoqian, Your Excellency Mr. Robert Hormats and Mr. Craig Mundie, Ladies and Gentlemen:

Good afternoon!

The 4th China-U.S. Internet Forum, co-hosted by the Internet Society of China (ISC) and Microsoft Corp., formally raises its curtain today. At first, on behalf of the Chinese host – the Internet Society of China, I would like to extend a warm welcome to the guests from Chinese and US Internet industry. I'd also express my welcome and gratitude to all media friends covering this forum, and thank all my colleagues from China and the United States who have paid great efforts to organize and prepare for this forum.

This year, the theme of the forum is "for the more useful and reliable Internet." During the two-day event, delegates from both sides will carry out direct communication and conversation on the topics like "cloud computing", "International cooperation on Internet crime prevention and privacy protection", "online intellectual property rights protection and criteria" and "Internet law and the development of new media". They will also discuss how to innovate and manage Internet industry, share useful experiences and practices as well as enhance mutual recognition and understanding. Through these discussions, the forum will further promote the healthy development of and deepen the cooperation and communication between the Internet industries in China and the USA, and therefore benefit the people in the two countries.

In the last two years, the population of Internet users in China has grown rapidly. As the basic network facilities gradually improve, China increasingly expands the coverage of the Internet. By June 2010, China had registered a total of 440 million Internet users and the penetration of the Internet had risen to 33 percent. The broadband users in China had reached 363.81 million and 98.1 percent of the Internet users who surf the Internet on computers have access to broadband networks. The export of Internet bandwidth had reached nearly 1,000 gigabytes. About 115.08 million people in rural areas have access to Internet, accounting for 27.4 percent of the total Internet users. The time people spent online continues to increase - each person spending 19.8 hours per week. What deserves to be mentioned is that 277 million people surf the Internet on mobile phones, which accounts for 65.9 percent of the total Internet users and 33 percent of the total mobile phone users, and 11.7 percent of them only get access to mobile Internet. People usually use mobile Internet to acquire information and communicate with others. Instant messaging service tops the usage of the mobile Internet, accounting for 61.5 percent, followed by mobile search, which accounts for 48.4 percent.

The fast development of the mobile Internet network has driven the growth of mobile Internet users. As the 3G networks expand, mobile Internet services based on the networks, such as mobile search, video, game, reading, music, interactive communities, online payment and application stores, have attracted more and more people to surf the Internet on mobile phones.

The coverage of the mobile Internet will further expand in China, especially in rural areas, as the integration of telecom, radio and TV, and Internet networks deepens. At present, there are increasingly more mobile Internet products that have independent intellectual property rights, and more parties joining the industrial links. It has become a consensus to provide more convenient and personalized services for users. UC explorer, developed by UC Mobile Limited, is a successful example. The product enjoys core technology and full IPR of its own. It’s convenient to use and saves online traffic. The good user experience has resulted in more than 400 million downloads globally. In addition, China also attaches importance to building wireless cities. At present, the cities of Beijing, Shanghai, Nanjing, Hangzhou and Guangzhou have started building wireless networks. During this year’s Guangzhou Asian Games and Asian Para Games, a free wireless service will be available via mobile phones and laptops to acquire competition information. The operators will provide an Internet access with the speed of 3Mbps and the speed will reach as fast as 10Mbps in some popular areas. Certainly, as the mobile communication technique develops, mobile Internet has vast development space in China.

The emergence of microblogging is another highlight of China's Internet industry in recent years. The popularity of Twitter has made the concept of "microblogging" accepted by the public. In China, microblogging services, represented by Sina Microblogging, have rapidly developed, opening the era of microblogging in China. According to a relevant institution’s prediction, by the end of 2010, the active accounts on domestic service providers will accumulatively reach 65 million. In August, at the China Internet Conference hosted by ISC, microblogging was used as an interactive platform for the first time. Tencent installed two screens in the conference hall, rolling the valuable and interesting contents posted by micro-bloggers about the conference. Speakers were also invited to answer the questions on the micro-blogs. Participation was expanded and a buzzword "on screen" was therefore produced. The word refers to micro-bloggers commenting on the conference and expressing their opinions on their blogs that would be screened at the conference. The example displays the strong interactive function of micro-blogs, whose great marketing potential and public influence have drawn huge attention. How to use new media, especially microblogging, to better serve economic development and promote transparency of public affairs is one of the issues that we are going to thoroughly discuss and research.

China's e-commerce continues to integrate with traditional industries and promote the development of relevant industries, forming the new service sectors based on the Internet. Big enterprises have developed their e-commerce levels, expanding to online design, manufacture and management. The applications of e-commerce of medium and small enterprises for producing and operating, especially sales and purchasing, have kept fast growth, with the characteristics of "multi-channels and activeness." As the expansion of e-commerce, its service sectors become more and more important. There are more service providers and modes in relevant trust, billing, logistical, IT and financial sectors. Statistics show that the transaction volumes of China e-commerce reached 3.8 trillion yuan in 2009, of which 1.57 trillion yuan were between large and medium-sized industrial enterprises, 1.99 trillion between medium and small ones. The transaction volumes of online shopping reached 258.6 billion yuan, accounting for 2.06 percent of the total retail sales.

The Chinese government attaches great importance to Internet technique development and innovation. In recent years, China has been promoting and accelerating the research and industrialization of key technique, such as the next generation Internet, the Internet of things and cloud computing, to speed up industrial development. At present, some big enterprises, such as Alibaba, Tencent, Baidu and Sinopec, have established their own cloud-computing platforms. A method to protect users’ data and privacy during the application of cloud computing remains a focus for relevant parties. At the fifth annual Internet Governance Forum (IGF) meeting in September in Vilnius, Lithuania, the issue was specifically discussed. For example, in order to protect users’ privacy, Qihoo 360 virus-killing software only uploads executable programs, asks the third party to manage its source code and joins the International Association of Privacy Professionals (IAPP). Microsoft suggested further enhancing the transparency of the privacy protection and security services provided by cloud-computing providers and the collaboration on combating digital crimes. The Computer Society of Kenya suggested stipulating a global standard for cloud-computing security and privacy protection.

China’s Internet industry has scored a lot during the past few years, but there is still room for improvement, such as narrowing the digital divide, cracking down on online pornography and strengthening Internet copyright protection and online security. In addition, the general lack of innovation lags behind international counterparts in understanding and utility of the Internet. Due to differences on development phases, technique levels and cultural backgrounds, the Internet industries of China and the USA have different characteristics, but also share many common concerns. Therefore, the two sides need to further strengthen mutual understanding, communication and cooperation. ISC is willing to continue promoting bilateral communication.

The forum provides a good communication and interactive platform for both sides. In the following sessions, I hope the delegates and experts from Chinese and US Internet enterprises will speak their minds without reservation. And in particular, I hope Chinese delegates will cherish this opportunity to learn from successful US experiences and effective measures on Internet innovation and governance.

Ladies and gentlemen, let’s cooperate earnestly and join hands to create a harmonious, more useful and reliable Internet environment. Let's work together for a better future!

I sincerely wish this forum a complete success!

Thank you!