Did SARS save China’s Internet industry?
Go go gadget woks – China’s Internet is on a roll
Internet – China’s new rock and roll
China’s Netizen’s slip through the censor’s net
China’s Internet users transcend the Matrix
China’s Netizens transcend the Matrix
China has an estimated 60 million Internet users –almost equal to the entire population of Britain. This number will grow to around 80 million by the end of the year, unlike the British population, unless the number of asylum seekers dramatically increases.
Unlike Britain, where more usually means less, in China more always means more – more people means more investment, more money, more potential –and more hits on your Internet site.
Only in China would the owner of a portal, Haisong Tang of http://www.etang.com, comment that his lowly 1 million hits a day meant he was “off the radar.”
In July investors poured almost $300 million dollars into the Nasdaq listed Chinese portals Sina.com, Sohu.com and Netease.com in convertible bonds, and the stock prices of the three sites are leading the U.S tech market. An investment in Netease.com two years ago would have reaped a 4000% profit today.
So what’s behind this current flurry of excitement in an industry pretty much written of a year ago?
There has been a huge increase, especially in broadband users, in the first half of this year in China, essentially during what is now referred to as ‘the SARS period.’
As mostly the urban population had to stay at home for several months –SARS pretty much cut off most social activities and travel – for news, escapism and social interaction people turned to the Internet. This was added to by SMS news services –websites sent text news to mobiles at a cost of about 1 pence a message, this kind of service became popular with the start of the Iraq war, and was reinforced by the outbreak of SARS. One pence a message does not sound like much, but when ten million people sign up for the service it works out quite well.
But what is so fascinating about the Internet in a Communist dictatorship? Is it not all propaganda endlessly watched over by hordes of secret police? Do people just log on to brush up on Chairman Mao thought and Deng Xiaoping ideology you may well ask?
The typical Chinese Netizen, as they are referred to, is young, with no siblings, the result of China’s one child policy. As a demographic group China’s Netizen population are the first real post-Mao generation. They surf the Internet for entertainment, news, job hunting, to send e-mail, to chat, play games, sell second hand items, and send text messages and pictures. Essentially the Internet has become an integral part of China’s youth culture – along with mobile phones, computer games, Taiwanese pop stars, Korean soap opera stars and Japanese cartoons. This has followed through into the office working population – and the Internet has replaced the newspaper as the most popular way to waste time in the office. For instance the first message that comes up on a terminal in KPMG’s Shanghai offices is a very austere: “if games, animations, animated pets, screensavers, chat software or other prohibited software is found on this computer it will immediately be reformatted by the IT department.”
Investors and venture capitalists run around Shanghai shouting about ‘digital convergence’ and invest tens of millions of dollars in schemes such as LCD advertising screens for lifts and taxis, and marketing people give inspirational speeches about how cutesy but cheeky animated cartoon rabbits are the prefect e-mail advertising gimmick.
Chinese will be the most popular language on the web by the end of the decade.
Despite news to the contrary most Chinese Internet users can access foreign news and information as readily as Internet users in most other countries around the world. The Chinese government has essentially tried to install a system of monitoring and blocking – but given the sheer volume of traffic – the officials in China’s Public Security departments looking after ‘information safety’ have little real chance of monitoring even a small percentage of user behaviour. Certain servers are watched more than others, but as China’s Internet service providers boom, the government is fighting a losing battle against market forces.
What tends to happen now is that officials practice what is known as “killing the chicken to frighten the monkey.”
When either through an informer or by chance officials come across seditious content they will publicly severely punish the individual involved, in the hope that the mass users would be frightened into behaving themselves.
Traditional Chinese media – both broadcast and print- are controlled via simplistic mechanisms and party discipline, but as the internet grows like an out of control microbe, the government does not have the resources to cope.
Control of newspapers is relatively simple, censors tell editors what is sensitive, where to ‘follow Xinhua’ via a daily fax, and anyone who fails in this regard is fired. TV media too similarly is dominated news wise by CCTV, where only the most politically trusted journalists are allowed into the studio.
One manager of one the top three portals joked “I have 40 policemen in my office. They know more about what goes on my website than I do.” But China has tens of thousands of popular web-sites – a police station cannot be installed into every one.
The older, less modernizing elements of the party are also unaware of the Internet except it provides departments with online name cards, one local press article complained. One popular rumour among Chinese journalists is that former President Zhang Zemin, on a visit to the People’s Daily offices in Beijing, was directed to view the People’s Daily online edition, and was said to remark “Ahh, these computers, now they have Chinese words.” Whatever next?
China’s Internet is not as well behaved as the party would like, but this is softened by the Internet’s current trend to make money –and various government organizations and individuals having ownership in a hazy world of silent partners, share ownership and the party’s moves to attract modern entrepreneurs, such as Internet CEOs, into its ranks.
Soft-sex, titillation, plagiarism, naughtiness and general entertainment based content rules. Crime reporting gets a free reign, and stories with themes such as ‘my real life as a prostitute’ or ‘sold as a sex slave’ generate as much interest as they would in the Sun or Sunday Sport. A quick browse of various sites shows some excitement that Chinese actress Su Huilun appeared in British magazine FHM, “Su Huilun on the front cover of the magazine (FHM) represents the sexy local setting and customs (of China),” boasts www.a.com.cn, run by the country’s advertising association.
China’s printed media is strictly controlled – but on the Internet millions of Chinese users browse over to sites such as the Singapore based zaobao.com for the latest political news about China’s leaders, and rumours relating to the Hu – Jiang handover.
Pornography makers and distributors face very severe punishments, including the death penalty, if caught in China. But owning pornography for personal use is not actually illegal. This has led broadband Internet service providers such as China Telecom, the local equivalent of BT, to post warnings to its users that hackers often lurk around pornography sites, and suggesting that they do not register any personal or banking details with such sites, as they may be stolen. Users even surf pornography in Internet bars, leading Chinese officials to insist that Internet bars install nanny software, that blocks such content. Of course such severity is met with the usual head nodding, as most such dictates are. Internet bar owners install the software, then disable it when the fuss dies down, a contact at the local police station will let them know when the next check is coming, and so life goes on. Many Internet bars even have ‘private rooms,’ where users (often truant school boys) can browse in private for a few extra pence per hour. The local press regularly runs stories on young boys disappearing for days on end into Internet cafes, which provide boxed lunches, and are open 24 hours. Users often sleep at terminals, in between bouts of network games. One popular story ran that a man stayed in an internet café in Wuhan for 60 days, non-stop, until the bar kicked him out due to his ‘body odour.’
The Internet bar has become for many Chinese youths what the pub is to British teenagers, a place to hide from their family, hang out until the early hours of the morning, playing games, but in China there’s very little drinking, the buzz is generated in the death-match shoot ‘em up games. There are an estimated 100,000 Internet bars in China. Approximately sixty thousand venues saw business suspended in a nationwide crackdown last year, and are now in the process of being amalgamated into ten officially appointed ‘Internet bar chains,’ on the McDonald’s business model.
China’s Internet users are quite evenly split gender wise, and the female netizens are proving more likely to spend money on things such as cultivating online pets or shopping for clothes. One of the biggest money spinner for China’s most popular portal sites is online dating. Flirting anonymously or in person in chat rooms, via SMS text messages and bulletin boards has proved a big hit with China’s Internet users. But complaints are rising about the numbers of suggestive and frankly crude messages being sent, and a person with a popular profile can get dozens of propositions a day.
Most urban teenagers have a network of “Wangyou” (Netfriends) across the county built up via www.Tencent.com ‘s QQ chatting service, very similar to MSN’s messenger.
China’s media must make money. Slipping.
But what do those censors take offense to? Politics, but they do not interfere with ‘business’.
Business in Chinese Internet portal is racy news- SMS messages and saucy pictures, dirty jokes,
???Uninterested in domestic politics,
And according to one piece of research from Chengdu, capital of the populous Sichuan province, 90% of males and 60% of female Netizens aged 17-24 visit adult websites. The People’s Daily put the figure lower, at somewhere below 50%, during one of the periodic campaigns to create ‘healthy information.’
Similar numbers gamble, either within Internet bars in small networks, or online.
The Internet is where the high moral standards of the party clashes with China’s current young generation obsessed with Japanese cartoons, Korean pop stars, computer games and getting job. The pressure on young people is high –families with only one child have high expectations, which means the escapism of the web, as well as the loneliness of long hours of study, strict school system, means many turn to the web to find friends. Internet friends are known as ‘Wangyou.’ People arrange to meet them via SMS and texting in popular spots around town, and again, the government and local police have had to warn against fraudsters taking advantage of web-based relationships to commit petty crime and worse.
One site, colloquially termed the Land of Peach Blossoms was busted in the port city of Dalian, (formerly known a Port Arthur) saw 8 people arrested and 155 users questioned .
for escapism and social interaction people turned to the Internet.
Chinese TV during the period was never ending programs about SARS and officially sanctioned ‘family entertainment’, and newspapers also contained the never ending officially sanctioned stories about SARS.
So what do these Internet surfers, or Netizens, as they call themselves in China, get up to?
The average user
Chinese hacker gangs
The more serious side – the “informatization” E government initiativeSURVEY
Overview of Chinese netizens online behavior
Internet usage in China has been witnessing a rapid growth. In January 2001, the numbers of Internet connected computers and Internet users hit 8.29 mln and 22.50 mln respectively, more than double the figures a year before, according to China Internet Network Information Center (CNNIC). The geographical location of users has become more widely distributed. Though Beijing, Guangdong and Shanghai still host 30.99% of all users, this percentage has decreased heavily from the January 2000 of 47.12%. Meanwhile, household Internet penetration has also been on the rise, according to NetValue, the rate in Beijing, Shanghai, Guangzhou and Shenzhen stood at 17.9% last January, while in March 2001, the rate increased to 19.4%.
How do they use the Internet?
Most Chinese users connect to the Internet through phone lines. A CNNIC survey in January 2001 show that 68.58% of users are dial-up subscribers, and only 16.18% use digital subscriber lines (DSLs), while the rest use both services. Recently, with the fast expansion of broadband network infrastructure, the number of broadband users has increased rapidly. And the heavy Internet users are more likely to subscribe to broadband services than those light and/or new users.
Most likely, a Chinese Internet user will connect to the network at home (with a possibility of 60.27%) or at his/her working place (with a possibility of 43.92%). While the following facts seems to confirm that users are more likely to connect at home, they only do so from 18:00 to 24:00, when more than 30% of all the users are on line. 85.85% of users pay their bills by themselves, or at least part of the bills. And high school and college students are most likely to obtain Internet access at an Internet bar or at school.
China’s netizens now log onto the Internet more and more frequently. According to the latest NetValue report, the number of days connected to Internet per user at home reached 9.6 days in March 2001, increasing from 8.1 days in February. However, the duration of time online seems to have decreased. The January 2001 survey by CNNIC indicated that an average user was on line for 13.66 hours per week, compared with 17 hours in January 2000 and 16.54 hours in July 2000. Some analysts believed that the decrease was attributable to the fast growth of new light user groups.
What are they doing online?
According to a NetValue report, web browsing accounts for about 60% of an average user’s online activity, and e-mail takes up about 19%, almost half of non-web activity. E-mail service dominates non-web Internet usage. More messages are being sent and received. In March 2001, an average user sent 7.3 messages and received 18.6 ones, while a heavy user would send and receive 11.9 and 46.7 messages respectively. A user usually registers for and owned several e-mail accounts. The January 2001 survey of CNNIC showed that an average user owned 3.24 accounts.
Internet Activity Ranked by Frequency
|Type of activity||Distribution of days connected on February||Distribution of days connected on March|
Base: Beijing, Shanghai, Guangzhou and Shenzhen February to March 2001 Source: NetValue
Top 3 Internet Functions Ranked by Usage Frequency
|Type of function||Possibility of usage when logged on, Jan. 2000||Possibility of usage when logged on, Jul. 2000||Possibility of usage when logged on, Jan. 2001|
Source: CNNIC Survey in Jan. 2000, Jul. 2000 and Jan. 2001
When asked what they were using Internet access for in the CNNIC January 2001 survey, 68.84% of the respondents said they were searching for information, and 51.37% also said they just wanted to entertain themselves. Only 11.25% claimed that they used Internet for work.
Among various types of information, News is most often requested and read. It has the largest group of viewers. As the CNNIC survey showed, 84.38% of all users read news on the Internet. The second most popular type of information is that on computers, read by 58.00% users, followed by entertainment and leisure. During 2000, all top 7 most popular information types witnessed an increase in request and demand, especially news and job-hunting/recruitment posts.
Top 7 Types of Popular Online Information
|Types of Information||Reader-User Ratio, Jan. 2000||Reader-User Ratio, Jan. 2001|
|Science and Education||31.43%||35.77%|
|Finance and Stock Exchange||21.22%||22.88%|
|Job hunting/recruitment post||19.25%||29.12%|
Source: CNNIC Internet Survey, Jan. 2000 and Jan. 2001
Though most users are still mainly looking for domestic information, this share decreased to 70.94% in January 2001, down from the 80.19% in last July, according to CNNIC. The Chinese Internet users are become more open and becoming more concerned about the world situation.
Where do they go when online?
When Xiao Chen logged onto the Internet every morning, he would read the news at Sina News Center first. Like many others, he also set Sina as the home page for his web browser. Without doubt, Sina enjoys the highest popularity among China’s Internet surfers. This fact is confirmed by NetValue’s March 2001 report on Chinese Internet behavior. Sina maintained overall No. 1 ranking for both properties (a group of domains) and the domains. Sina visitors are the most loyal and “sticky”. An average Sina.com.cn visitor spent 66.3 minutes on the site, compared with the 39.5 minutes and 35.4 minutes per visitor at sohu.com and 163.com respectively, the two domains closest to Sina in the loyalty rankings. However, 163.com attracted the largest number of overall visitors. In March, 59% of all home users visited the site at least once.
Top 10 Domains
Base: Beijing, Shanghai, Guangzhou and Shenzhen March 2001 Source: NetValue
Online Advertising, online Shopping, Stock Exchange-Finance: promising sectors?
Predominantly attractive to most Chinese Internet users are the various free services on offer. Online advertising is believed to be the main income source supporting free service providers. 45.63% of all Internet users said that online advertisements should have more effective promotional results, as shown in the CNNIC January 2001 survey. But, how do the surfers receive those ads appearing on their computer screen? Not as well as the dotcoms expected. Only 12.89% of them regularly clicked his or her mouse on ads and 37.16% sometimes, when facing viral online advertisement links. However, there is still hope, for the reception towards ads appeared to be much warmer than it was last July, when only 7.68% of users clicked regularly on ads and 25.18% occasionally.
Online shopping led the list of online businesses the users believed to be most promising. According to CNNIC, 61.41% expected the sector to have a bright future. And the number of online shoppers grew rapidly last year. By January 2001, 31.67% of Internet users had completed a purchase online in the past year, up from the 8.79% a year before. 23.90% of users visit e-commerce web sites regularly, and another 45.17% visit sometimes. What do they usually buy? Usually those standardized products which users have already tried and tested. Book and magazines, computer related products and A/V products are ordered most often, respectively with 58.33%, 37.47% and 29.07% of online shoppers having bought such goods. Yet, the online shopping business has great room to improvement. Only 27.72% of online shoppers are satisfied with their experience. A number of problems are hindering a rapid and healthy growth of the sector. 32.03% of users feared that there was no guarantee of product quality, after-sales service and sellers’ credit, 31.20% were concerned about security problems, while 12.59% complained about inconvenient payment methods (many online-shops only accept postal remittance). One user in Nanjing once bought movie VCDs from a Beijing-based online store, paying instantly by credit card. Nearly one month later, he received his goods, but found the plastic cases were broken. So he contacted the store by e-mail, but received no feedback. Many such similar stories aren’t rare among online shoppers.
On the list of most promising sectors, network-based communication, online education and online securities trading followed online shopping in popularity, respectively winning 55.33%, 54.54% and 49.14% of non-exclusive votes in CNNIC January 2001 survey. And early this year, the Chinese netizens started to show ever greater interest in the stock exchange-finance sector. NetValue reported that from December 2000 to March 2001, the number of Internet home users in Beijing, Shanghai, Guangzhou and Shenzhen, who had visited the sector, had steadily increased, jumping up to 32%. Such a big increase might be the result of the arduous marketing efforts of existing stock exchange-finance web sites and the traditional securities brokers who have been in a rush to establish and strengthen their online-trading arms. Now, the individual securities traders are increasingly ready to search for reference information on the Internet, and an increasing number of them are starting
Internet: Police destroy the online prostitution criminal gang
On October 16, after the local police station of the Land of Peach Blossoms of Dalian receives the masses that” someone issues and reports, Organize police strength to organize work immediately , by 4 o’clock on the afternoon of October 20, succeed in destroying this criminal gang, Arrest 8 suspects.
Through inquesting and learn this criminal gang at” sea”( network name), some ginger, some( women), Deng 4 people slowly as the tap, Organize, recommend and hold and leave the prostitution activity. ” sea” responsible for and announce prostitution and whoring information at 150 yuan for once at Internet, And registers and compiles a register to the net explorer that is” interested in”, including the content, such as name of the network , telephone number,etc.. After,give from relevant informations to” sea”s rented house house-owner some ginger is and the under the care of some of ginger to screen connection of on net explorer that compile a registers, Information is given some, Deng to the whore who rents its house soon after succeeding, And whether slowly, at residence prostitution or connection other whores come this prostitution Deng. By to at present, this case involve at 155 of net explorer who whoring ” interested in”, 11 of whore altogether.
It is reported some ginger, Deng, suspected of being involved in and recommend, hold and leave criminal to detain public security organ activity prostitution at some slowly, Have peoples besides accommodate and educate, at administrative detention because of prostitution and whoring.
The Web site of the government does not become” Web site of name card”
Originally for meeting information age convenient, swift, heavy amount of information,etc. characteristic and government Web site that set up, Can’t but often and even can not get in half a year once a month and upgrade effectively, it is very few to have a look around to persons ¡¡” Web site of name card”, call upon one after another on the international forum of technological innovation of information of China( Jinan) which a lot of experts run here in the face of this kind of chicken ribs, Web site can’t have been this government.
Zhu Gaofeng, former vice-president of Chinese Academy of Engineering, points out while expounding the fact the road of China’s informationization, Flow in the face of fund, information flow, trend who material flow ” select good woods perches” within the range of world, The reform in government organization and function of our country develop and must move forward with the electronic government in coordination , Among them occupy the Web site of government of important statuses and should become a relevant information and serve the Web site , Not merely the static webpage of” stagnant water and one pool” is or the individual’s information detached island. Especially a lot of Webs site of local government can not upgrade , The same as name card, one is enough. How could such an Web site common peoples interesting 2 timeses come over? If this kind of current situation can not change for a long time, it was common people’s confidence to the electronic government that dampenned, Especially the trust to the government initiative spirit and speed.
From introduction,at information-based degree high Hong Kong relatively, devoted to the government information centre Web sites of construction of in recent years at special zone governments( receive good result of at http://www.info.gov.hk)s, Deserve to draw lessons from . This Web site is one of the mosts popular Web site of government of the world at present, 2001, The having a look around to persons of it is close to 500 million. Hong Kong” electronic government” introduced” public service electronization” project in 2001, The citizen can obtain 130 and come from 40 governments’ making policy electron public service that department offers through this plan.
Vice-president of Chinese Academy of Engineering Wu HeQuan says , the Web site of the government is regarded as and shows the important window of the government image, It is surprising to invest in enormous, development speed, it is really too regrettable not to utilize carefully . Area of Asia originally very limited address IP that get assigned, occupy IP the also insufficient to utilize existingses of resource, Along with the development of magnanimity information of network of future generation, these very difficult to find space who oneself base on Web site.
INTERNET BARS IN CHINA
Internet bars, or Internet cafйs as they are termed in Europe - in China
are usually called "Wang Ba" - directly translated meaning Net Bar.
Increasingly popular as entertainment venues in China, the government,
at the highest levels, has been showing signs of distinct disquiet at
the phenomenon. Following a series of security checks on bars and
Internet portals by the PSB - China's police force - earlier in June, a
fatal fire at a popular bar in Beijing brought the whole industry to a
standstill while safety checks were carried out. There is now arising a
split between the "green net bars" - officially sanctioned bars, and
"black net bars" - underground, unlicensed operations.
There are serious contradictions in the government's behavior - on the
one hand China is going full out on an "informatization" drive - the
government would like the majority of the urban population to be online
at least by 2008 (the date of the Beijing Olympics) - ordering their
dinners from the local restaurant, accessing courses in E-education,
filling in forms on E-government websites or virtually shopping on
www.wanfujing.com. But on the other hand - the government is not
comfortable with the very nature of the Internet - having access to the
information superhighway means much more than being able to order pizzas
- users have been displaying tendencies to surf sites with undesirable
content, post undesirable comments on bulletin boards, and getting up to
all sorts of disreputable behavior. At the vanguard of this disreputable
behavior is the Internet bars - full of teenagers until the early hours.
The more the government learns of their activities the less happy it is.
Confronted with the "informatization" reality of a young, tech-happy
generation spending their nights in cheap Internet bars China has taken
the obvious step - and is setting about restructuring, rectifying and
regulating the Internet bar industry into something a bit less
The new trend - to set up chain bars, easy to regulate and control, is
being supported at all levels, politically and by big corporations.
China Telecom is beginning to offer discounts to chain operations, while
the government is regulating the smaller operators out of existence. It
looks like Internet bars are going to be big business in China, and the
rest of Asia for that matter. Hong Kong, Thailand and Taiwan also have
thriving Internet bar industries. But operators of the new McNet bars
will have to make sure they get all their licenses in order first. Each
province will be bringing out its own set of rules - hopefully each
province will not try to out-do the other in severity. Zhejiang
province recently announced it will be encouraging the formation of
parent committees to watch teenagers in the bars - a kind of real live
net nanny system, to supplement the net nanny software being installed
by the PSB, according to a report posted on China Telecom's website
A high growth industry
Internet users in China are now estimated to have reached 33.7 mln, 50
times higher than five years ago. Among this large number of users,
15.4% of them surf in the Internet bars. Previously Internet bars
originally referred to the bars where drinks were available, as well as
having a few computers for customers to do a bit of light browsing. But
in China now, any place that offers Internet services could be called an
Internet bars or Internet cafй, and drinks usually either come out of a
self service vending machine or from a shop around the corner. Food,
similarly, is ordered in, usually of the RMB 5 "hefan" (boxed lunch)
variety. The relatively low proportion of personal computers in China,
partly due to lower spending power, as well as lack of space in the
average household, has played a deciding role in the popularity of
Internet bars in China. Customers in Internet bars invariably are low-
spenders, even though they might come from a high-income bracket. But
the small amounts add up - if a bar charges RMB 5 an hour say, if in 24
hours a 100 PC bar has 200 users, who stay for a 5 hours average each
(mostly playing LAN games - very few would actually go online), that
would amount to RMB 5,000 a day income, not far off RMB 2 mln (USD
240,000) in one year. That's not including value-added services -taking
a cut from the hefan, cigarette sales and drinks machine - many bars
also sell software and other items. The bars have also become a hot-
spot for advertisers, less now than during the dot com boom, but for
larger operations there's still money to be made in letting brands
promote in-house. As the bar would probably cost around RMB 400,000
-500,000 to set up, after taking away operating costs there's still a
healthy profit to be had, which is attracting high numbers of small
businessmen to enter the business with a small capital outlay.
The accessibility and variety of Internet bars is another reason that
has created the growth in user numbers. Tea houses, which are packed
with card and mazhong playing customers all night sipping a re-fillable
RMB 5 cup of tea - have found a more modern equivalent in the all night
budget Internet bar. In today's China there are Internet bars on every
street corner, though this may well change once the new government
regulations come into place. It is estimated that Internet bars
(including legal and illegal) in Shanghai alone, one of the biggest
cities in China, now number around 3,000.
The number of Internet bar users in China (Unit: ,000)
Requirements for bars
But as with any booming business model, there's heated competition going
on among Internet bar operators, and there are winners, and losers.
Those small-time investors who rushed into the business to make a fast
buck are now mostly in a rush to get out. The larger operations such as
the officially highly praised Eastday are slowly flexing their muscles
as the smaller players are forced out of the market. So as Internet bar
operations inevitably get larger - so to is there a growing expectation
among users for better quality equipment, service, and price. Setting
up a 100 or 200 PC operation, with all the add-on network equipment,
toilets, sofas and so on, isn't something you can do with only the
advice of a mate who is good with computers. There's a growing service
industry providing the bars with their hardware, software and technical
service requirements. Besides actually setting the place up, serious
consideration needs to be paid to getting the various licenses.
To open a qualified Internet bar, hardware is the first major
consideration. The hardware solution directly affects how much the
profit an owner could make. Nowadays, most owners are choosing a
solution whereby one server links all the terminals to realize the
connection of the Internet, means all the computers can be online while
keeping the connection fee down. This solution is widely adopted in
almost all Internet cafes in China and is thought of as the most
economic solution for small-and-medium-sized bars. This does though
lead to complaints, when young Wang opens twenty windows on his terminal
simultaneously, downloading video clips, slowing down everyone's
Internet access speed. There is a growing trend noticed in Shanghai for
higher priced bars to offer broadband connections, which is especially
popular with online game fans, and video downloaders. And lets not
forget the computers - certain firms offer the build your-own solution,
allowing computers to be tailored exactly to the bar's requirements, and
cheap. These firms invariably supply the Internet bars, and often a
full time service engineer. Below is a sample compilation of what a
typical Internet bar operation might use.
Hardware requirements for Internet bars
Server For computer No special requirement
Terminal For computer No special requirement
Phone line For Internet connection 56KB/s, lower speed. not
suitable for Internet bars
ISDN For Internet connection 128KB/s, low speed.
Replaced by ADSL.
ADSL For Internet connection 512KB/s, the commonest way
DDN For Internet connection 2Mbit/s, higher cost.
Mainly use in campus' LAN.
Coaxial line For LAN equipment No special requirement
BNC For LAN equipment No special requirement
RETICLE For LAN equipment No special requirement
Others For LAN equipment No special requirement
Source: PC home
Monitor Numerical control 15
CPU Intel Pentium III 733MHZ
Motherboard Gigabyte GA-60XM7E (Intel 815E)
Memory HY 256M PC133 SDRAM
Hard Drive IBM 30G(ATA100)
VGA Card i752
Sound Card Creative 128
NIC Realtek PCI 10/100M RJ45
CDROM ACER 50X
Floppy drive Samsung 1.44
CASE ATX 300W
K+M PS/2 (normal)
Source: PC home
Monitor 15 or 17
CPU Intel Celeron II 600MHZ or higher
Memory 128M PC 100 SDRAM or higher
Mainboard Intel 810 (Integrated video card Intel i752AGP, Sound
Card AD1816 PCI, RTL8139)
K+M PS/2 (normal)
Source: PC home
The software on offer in Internet bars plays an important role in
attracting customers. The tables below shows some mainstream software
being used in Internet bars in mainland China.
System Server: Windows NT 4.0/ Linux
System Terminal: Microsoft Windows 98/Microsoft 2000/XP
Browser Internet Explorer/Netscape
Proxy server CCProxy;Winroute;NAT32
(time and fee
Monitor/Secur Filtration Expert 1.0; MeiPing Kavass
Source: PC home
Media player RealPlayer; Winamp; Windows Media Player (bound with MS
Mail Server Outlook Express (bound with MS Windows); FoxMail; XMail
FTP CuteFTP; AceFTP
Share Morpheus; Napster; WorksLink
Chat MSN; OICQ; ICQ; MRIC
Game Chinese: Stone Age; CS;SC; Mud; Card and Chess; YingYong
Pirate/Genuine: most best selling US/Japanese and
European game titles
Source: PC home
Having read this far into the survey, it should be realized that in
China, to open an Internet bar is not as easy as you might think.
Establishing a legal Internet bars normally follows (at least) the five
1. Application for an Internet bar management license from the chosen
2. Application for a "security" license of from the local Public
3. Application for an Internet bar management license from the local
Industry and Commercial Bureau.
4. Application for a Internet bars charge permission license from the
local Price Bureau.
5. Application for Internet bar tax registration license from the local
6. Other license applications depend on the special requirements of
The process of application is not easily accessed by persons without
'guangxi' (connections), and can take several months, if not years.
There are certain pre-qualifications - for instance the applicant cannot
have a current work unit. Many companies who apply to have internet
bars included in their business range would have to go through a long,
and not certainly successful procedure to achieve this. Therefore, most
Internet bars we are seeing on the streets are illegal.
New bar regulations, and closures
The number of closures of Internet bars has reached unbelievable, by
June 26, less than a week after the fire in Beijing, Shanghai's Industry
and Commerce Bureau announced it has closed 244 bars in the city for
'fire safety problems.' Over the last twelve months Interfax China has
reported several campaigns, in December 2001 the State Economic and
Trade Commission said 94,000 Internet bars were investigated nationwide,
with 17,488 being shut down, 48,000 reregistered, and 28,000 ordered to
overhaul their operations within set time limits. In July 2001 public
security departments checked nearly 78,000 Internet bars during a
special action, and punished 14,400. The departments found that over
30% of Internet bars nationwide were unlicensed or not fully licensed.
In August 2001 it was announced that Video game, film and Internet
content would be rectified, and a campaign was launched, concentrating
on rectifying the content of video games, audio visual products and the
Internet, three of the "four major" cultural products administered by
the Culture Ministry's Market Administrative Service Bureau. The fourth
major cultural product is historical artifacts. Then, on June the
fourth this year the government again launched a new campaign, giving
the PSB more powers to control Internet usage and content. This was
followed shortly afterwards by the fire in Beijing. Usually the
computers are being sold in batches of 50, coming from medium sized
In a bid to better monitor Internet bars, and to squeeze out small and
badly managed operations by market forces rather than direct government
intervention, the Shanghai government says it will help the development
of Internet bars chains in the city. However, before the current
intense supervision of Internet bars ends, no application for
establishing new Internet bars will be accepted, Du Lexing, director of
the Market Supervision Department, directly in charge of monitoring
Internet bars, under the Shanghai Cultural, Radio, TV and Film
Administration Bureau, told Interfax in an exclusive interview. On May
10, the Ministry of Culture released new requirements for setting up new
Internet bars. Du told Interfax that the regulations to be released by
the Shanghai government would be even stricter that the requirements set
by the Ministry of Culture. The to-be-released requirements are: minimum
numbers of PCs (72), space (180 m sq) and roof height (2.7m), according
to Shanghai Ribao, though Du did not comment.
Location & charges
The main users of Internet bars are predominantly young people aged
between 15 to 25, mostly high school or university students and recent
graduates/first jobbers. It is apparent that the owners of Internet bars
have realized that this is their key demographic, therefore almost all
Internet bars are to be found near schools or offices. For instance,
there are dozens of Internet bars clustering around the well-known
universities in Shanghai, and these bars are full day and night,
according to our Interfax investigations - though these bars now will be
in danger of closing, as the Shanghai government insisted that bars will
now be distributed proportionally 1 bar to 10,000 people, with each
small district only being able to offer 1 license. That means the
Universities will most likely be only allowed one bar each - meaning
that one bar had better be big.
The student bars tend to be cheaper - charging around RMB 3 or even
lower per hour to attract the customers, the low charge determines the
corresponding low budget environment usually associated with students.
Most of these bars have not got a complete set of licenses. On the other
hand, those bars near the office areas offer a more cozy environment,
better space, bright lights, high quality computers and various kinds of
drinks, etc, charging around RMB 8 per hour.
The Internet has certainly caught the imagination of China's younger
generation, as have computer games. Especially following the country's
relative isolation in relation to the rest of the world, the Internet
has come as something of a revelation, both to Netizens, and the
government. Students are still the largest group of Internet bar users,
so we sent an Interfax special correspondent undercover to find out what
kind of behavior takes place in these 24 hour bars? Previous surveys
conducted have revealed that young people spend their time mainly
chatting, playing games, watching movies, and browsing in the Internet
Chatting - Because of the one child policy of China, 99% of young people
aged below 24 have no siblings. So in sharp contrast to their family
life the Internet has caused some young people to lose their balance,
according to one source. Using chat tools such as OICQ and MSN some
teenagers chat with their virtual friends often into the early hours of
the morning. It has become a fashion to have web friends and lovers, and
talk about them as if they were real.
The "Yellow -Net" - In Hongwei Zhang's Phd paper for the College of
Criminal Justice at Houston State University "The Emerging Carnal
Internet and Its Social Control in China," he says that: "for ordinary
Chinese, the carnal Internet especially is believed to exert great
negative influence on juveniles. Increasingly, pornography and other
adult related content is being found to be addictive, like a drug which
young people luxuriate in and go even mad." Zhang's definition of
carnal Internet is: "the so-called carnal Internet means that by using
computers - mainly the Internet to transit sex-related content, such as
obscene words, pornography, movies, DVDs or other broadcast materials,
and advertisements for introducing prostitution and so forth in order to
receive illegal interests or other benefits." According to his
research: from the investigation of the Internet bars around the Chengdu
universities area (in Sichuan Province), it was said that 90% of 17-24-
year-old male and 60% of 18-24-year-old females visited adult websites,
and 34.6% of Cantonese youths confessed to visiting sex websites. He
quotes Renmin Ribao, saying nearly 50% of all teenage cyber-surfers in
Beijing browse the Internet for study purposes, while the other half
indulge themselves in on-line games, chat and even adult websites." It
should be noted that a good proportion of the 50% studying are most
likely at home, not in an Internet bar. Zhang partly blames this trend
on the lack of sex education in China's schools. This trend has greatly
contributed to urgent drafting of "Online Security" laws to control
Game playing - Except for chatting online, playing games is the most
popular behavior in Internet bars. There are three main categories of
games, simple cards or majiang (mazhong) inspired games, role playing
games and Mud (multiple user dungeons). The latter two categories are
predominantly male, inspiring the comment "(these games) make these
young complacent boys to enjoy their imagination of being the hero,"
from one female Netizen studying at Fudan University.
Movie watching - The broadband connection in Internet bars has provided
a new form of entertainment, allowing users to watch and/or download
motion pictures, predominantly from Hollywood and Hong Kong. There is a
plentiful supply of pirated online movies, which is an international
phenomenon, not unique to China.
Browsing & BBS - Yes, some users actually visit Internet bars to
innocently browse the Internet. Some search for news and information,
others post to Internet discussion groups and bulletin boards (BBS),
though posting comments on bulletin sites is becoming more tightly
What should be noted - that, apart from the tragedy in Beijing, there
are very few reports of 'real' violence or disreputable behavior in
these bars. Users tend to pay their bills quietly, there's very little
hooliganism or vandalism, and virtually no consumption of alcohol. Most
of the lewd, violent or disreputable acts are committed in cyberspace.
A taste of the market:
Despite the numbers of Internet bars in China, there are few bars that
have reached a level that meets with both the users and governments
approval. The list below outlines a few of the successful ones (at time
Some typical "Famous Internet bars" across China
Name Location/Address Charge Brief Introduction
Boil 100 Heiping street, RMB 4 per hour 50 terminals; high
Beijing speed; 17 display
Bright No.165, Ro.Haidian RMB 6-7 per hour, More than 120
Information , Beijing Free at 7:00-9:00 terminals, 17
Port AM display, high
Chuangtian No.67,Ro Zhonghua, RMB 4 per hour or 90 terminals;
Shanghai. membership card large space; cozy
Manda No.169, Ro. Middle RMB 3 per hour, 15 40 terminals; high
Jianguo, Shanghai. Yuan/Whole night speed.
New World No.129/30, Ro. RMB 3 per hour, or 100 terminals;
North Cuihua, RMB 10 Whole free hot drink
Xi'an night. available at
Dong Hui Erdong River, RMB 2.5 per hour, Thousands of mp3
Tonghua RMB 10 = 10:PM- available.
TianCao No.10, Gaobo RMB 1,5 - 1.8 per Favorable
garden street, Weihai hour environment, low
The uninterrupted opening and closing of Internet bars across the
country has also boosted the business of those who offer technological
support services. The list below outlines several such companies - which
provide related services for Internet bars:
Technology support companies in China
Company Name Business
ChaoYue Providing services of establishment of LAN, Broadband
connection, and so on.
Chuang Wei Providing the Internet bars solution and so on.
Beng Teng net Internet bars solution providing, network shares, and so
DTK Providing Internet bars solution,etc.
Fang Zheng Providing YuanMing Wangbo Internet bars solution, etc.
Following the regular tales of students going missing for days/weeks on
end in Internet bars, the recent fire, and reports in the Chinese media
of the "uncounted number of students losing their academic studies and
daily lives," the government has is in full swing to "rectify" the
market. Thousands of illegal Internet are being closed down (again) as
has so often happened before. But this time the attack is more serious,
and prolonged - in Beijing, authorities set a three-month campaign to
sort out irregularities in the Internet bar market.
As pointed out earlier in this survey, the future trend inevitably is
leading towards the growth of chain Internet bars - though we can still
expect a few more waves of activity by the smaller operators before
"market forces" have their way.
As analyst at Norson Consulting ,Craig Watts told Interfax: "The
Internet bar in China is a compelling business proposition. Branded
chain-style operators with shops accommodating more than 100 computers
and offering better accountability to the government are just beginning
to emerge and will likely drive the single unit operators out of
business in the same way convenience stores are replacing small mom-and-
pop shops throughout Shanghai. The transition will take time, however,
and in the meantime the government will continue to wage pitched battles
against the Internet bar industry. "
05/04/2002 17:49 : CHINA IT & TELECOM REPORT (Weekly,En)
China's online youth
As the globalization trend gradually assumes a dominance over the lives
of a majority of the world's population, people are finding contact
easier than ever, as global cultures blur and international
communications improve. This is partly happening thanks to the
invention of the Internet, with its estimated 500 mln users around the
world. In China, nearly 33.7 mln people (and counting) now travel the
virtual world, and this number is expected to increase to 100 mln in the
coming year. Of these online Netizens youth is a predominating factor,
and this survey is an attempt to explain some of the online
characteristics of this demographic group, their likes, dislikes, and
preferences. A key group in the sales of online products, e-commerce,
mobile phones, chat rooms, impulse buys, candy bars and fashion related
items they are a marketers nightmare as they are both easily led, but
yet fussy- disloyal, yet loyal, hard to define, yet like to join groups,
individualistic yet trend followers. Welcome to the world of youth. For
research purposes Interfax China asked a selection of Shanghai
university students to help in the compilation of some of the opinions,
tables and ideas presented in this survey.
Figure Source: CNNIC; Chinatelecom
China's online users- the numbers
Truly mature Internet services appeared in China in mid 1990s, when
people could remotely log on to web-sites, send & receive emails and
exchange their views in BBS through telnet by dialing up through their
phone line. At that time, the main users were young professional males
with majors in Computer Science. With the development of the Internet,
accessing the net is no longer that complicated, which has created the
chance for larger numbers of people to go online by using their own home
computers. Since then, surfing Internet has become more and more
popular in mainland China. CNNIC shows, from 1999 to 2001, that the
main body of online users were within the age group of 18 to 24, which
accounts around 50% of the total of China's Netizens. It has been
noticed that the number of users' aged under 18 is also on the rise.
The percentage of China's online users' age
Like the age diagram, imbalances also exists in the allocation by
location of Internet users in China. Again from CNNIC's stats., the
online users in mainland China mostly congregate in the few big cities,
especially Shanghai, Beijing and Guangzhou, accounting for nearly half
of the total number of net users. Remote regions, like Xingjiang, Tibet
and Ninxia contribute almost zero percent to the numbers, which
indicates that the prevalence of Internet use is also linked closely to
the economic development of the regions.
The percentage of China's online users' allocation
From the statistics, it can be concluded that the main online population
are those youths aged from 18 to 24 living in the major metropolis'
dotted around the coasts and in capital cities. These are the Young
Analysis of data from China's annual Household Income and Expenditure
Survey done by the State Statistical Bureau on the distribution of urban
households by income from 1992 to 2000 indicates that in 2001 the top
10% of all urban households in the country earned over RMB 34,000 pa.
This top segment of Urban Households is particularly important to the
producers and distributors of most consumer products and services.
The distribution affluent households is not even across the country. It
is estimated that in 2001 a total of 84% of such households reside in
just 8 Regions.
The Guangdong Region came top with 39% of affluent households in 2001,
Shanghai and its adjacent Regions came in second, with 31.1% and Beijing
and adjacent Regions accounting for 14.2%.
This has significant implications for the future of Hong Kong. It's
survival as a major business center may simply result from being the
point of contact with nearly half the affluent households in China.
Source: MarketEstimator - Urban China by Region
Statistics shows that most of China's Young Netizens have a relatively
high educational level, more than half Netizens possess a university
degree. But with the increasing popularization of Internet, this
percentage will decline, the online users distribution appears much more
balanced to reflect the general population.
The educational level of China's online users (2001)
Attitude of Young Netizens
MTV, bastion of perhaps the Internet's greatest enemy - TV - compiled
research on the attitude of youth in Asia, to determine the differences
between them and their western counterparts "Generations X, Y and Z,"
which was released to Interfax. MTV estimates around 88 mln households
in China are equipped to receive cable TV.
According to MTV their core demographic is: 15-24 (over 30%), with 50%
of viewers aged between 15-34. They prefer to go out, like new
technologies, are trend pioneers, spend more money on cosmetics and
perfumes, prefer Internet usage and are devoted music lovers
(surprisingly). In China MTV has cooperated with legend, Tom.com,
Siemens, Sony, Cadbury and Johnson and Johnson in co-promotion
Global youth are concerned about drugs, aids, crime, racism, divorce,
the future and their personal relationships. They trust in themselves,
family/friends, change and technology. It was also found that most
youths want an exciting life full of challenges and intensity (ie. not
The major difference between China and the rest of Asia and the world is
the intense optimism in cities like Guangzhou and Shanghai, when
compared with residents of say Japan and Singapore, who are still more
optimistic than their US cousins. The Europeans still tend to be more
pessimistic. TV still gains a 90% or higher interest rate amongst all
these groups, with only Latin America slipping to 86%.
MTV defines its MTV generation Asia as culturally oriented, looking for
the new, willing to try, optimistic, committed to the future, feel
fortunate, like the idea one community and are culturally respectful.
Members of Generation X on the other hand are individualistic,
impatient, skeptical, pragmatic, pioneers, feel entitled, a community of
one, consciously tolerant and redefining family.
The reason why the Internet has attracted so many young people to troll
through cyber space is the Internet's increasing tendency to allow
information transfer in a speedy and convenient fashion. "With the
Internet, people are closer than ever, only one-click can link one with
his long-distance friend," identified on student to Interfax. A result
of a survey conducted by CNNIC shows that the most important functions
for Chinese Netizens is sending and receiving e-mails, and then,
downloading software and information, followed by chatting online.
Since the inception of the MonternetError! Bookmark not defined.
(China's main mobile Internet portal site) adopted by China Mobile in
2000, interaction between the Internet and mobile phones has become
another craze amongst youth in China.
Ian Stewert, Director of the Filter Group identified the following
trends as growing in popularity among today's youth in Asia:
Hip Hop- hitting the mainstream
Spa's - paying (a lot) to look healthy
Retail - stores/boutiques that have an artsy feel
LAN gaming - the take over of Net cafes
70's - the revival is coming!
The key themes as identified by Stewert are: Individuality- a
fragmentation of styles across music and fashion, and an ironic
collective desire to be different.
Big brands- losing their dominant position, as small brands and "uncool"
brands are now cool (Ie: a pair of old liberation army boots are now
preferable to Nike trainers, with some). Fake, and super-fake brands
are also crumbling big name brands foothold, as consumers are losing
trust in both product and price. No-brands are also now cool.
Mix 'n match/ cut n' paste: Personalization and customization of
everything from mobile phones (face plates, stickers, aerials, etc) to
shoes is now common.
Digital - the technology explosion is encouraging the current young
generation to be interested in forwarding culture, a new dictionary is
emerging, pop culture is expanding very fast, there is a "no turning
back attitude," and "friends help friends master technology."
As far as Stewert is concerned to win with this demographic companies
Be tribal- connect to the groups passions
Seek leaders- to understand and access these groups
Go viral- to leverage forward looking culture
Be realistic- to build lasting relationships
Reinvent- move fast to stay ahead of the curve
Have impact- do things that haven't been done before.
Popular Websites among Chinese youth
Site Name Features
Google Search engine, the search result never let one down.
Yahoo Chinese version of world's largest portal site. Photo album is
its most welcome service.
Pchome Virtual community relating all computer stuffs. From software to
hardware, digital gizmos to flash.
Roungshu China's largest original literature site, everyone could realize
their writer dreams here.
Chinaren It's classmates' cache help one pick up the school life.
Yifan Online books library, free downloading.
Flashempire Professional flash site.
Chinamp3 Large music database, also providing countless free mp3
(source: Interfax, comments from students)
Popular Chatting tools among Chinese Youth
Name Description Download Site
QQ Most popular chat software of http://www.tencent.com/
inland china, especially among
MSN Binding software of Windows http://messenger.microsoft.com/c
Messenger operation, easy way to contact n/
one's old buddy.
MIRC An ancestor of online chat with http://www.mirc.com.tw/index.htm
ICQ Most popular chatting tools in http://web.icq.com/
the world, a very place to
improve one's foreign language.
Yahoo Lovely chatting environment http://www.yahoo.com/
Messenger attracting girls.
(source: Interfax, comments from students)
SMS (short message services) allows Internet users to send short
messages to mobile phone users anytime, anywhere, now without network
restrictions among mobile operators, whose advantages include catering
to the demands of young people pursuing novelty and speed. According to
figures from China Mobile, 10 bln short messages were sent by their
subscribers in 2001. Since SMS was introduced in China, an English
language nickname of "Smart Marvelous Service" came about (as revealed
by one student), perhaps highlighting the lack of cynicism amongst
Chinese students. The potential profit from SMS became something of a
last straw to several web-sites hoping to survive the downturn.
China's main SMS providers
Site Name Description
China Mobile Personalized face off with one's mobile phone. Providing
information including real-time quote, world news, weather,
horoscopy, jokers and so on.
(source: Interfax, comments from students)
Broadband is offering the online gaming community a new life. A survey
shows that about 31.1% of China's net users seek entertainment on the
Internet. Among which, most of them have experienced online games.
Excitement and interaction are the major reasons for the growing game
industry. Happy submarine launched by shanghai online, for instance, was
heavily subscribed by users on its first day. As it is still in its
initial stage, online games still have a lot of room for development.
Some online game sites
Shanghai It's happy submarine vividly display the teamwork spirit, lovely
online colorful design attracts the youngsters' eyeballs.
Our game Large game portal site of traditional Chinese games, including
cards, chess and so on.
17173 Large portal site provides various online RPG games.
(source: Interfax, comments from students)
Bank Cards ownership/usage
The difficulty of credit cards application procedures and the adherence
to the traditional concept of money in China has improved somewhat
lately, with a noticeable growth in the numbers of credit cards being
used by China's Netizens. Most bank cards in Young Netizens' hands are
debit cards, which have similar functions to credit card,s except the
individual overdraft facility. But up-til-now the atmosphere surrounding
the hacker populated Internet has exerted a negative influence on online-
shopping businesses. Postal and bank tranfers, as well as COD (cash on
delivery) are still the most practical forms of payment preferred by
those who wish to shop online. This obviously leads to a lack of sales
amongst a demographic looking for instant gratification on the Internet,
though does highlight the perhaps under valued concept of the Internet
as an online brochure- many young shoppers check out what they want
online before heading downtown to the mall.
Major bank cards belonged to China's young netizens
Card Name Issued Bank
Great wall Bank of China
Dragon card China Construction Bank
Peony card Industrial and Commercial Bank of China
Pacific card Communication Bank of China
Yikatong China Merchants Bank
When the new buzz word "e-commerce" showed up, people enthusiastically
thought the revolutionary era of business had come. But how great has
its real impact on these teenage Netizens?
China's Online users' earning percentage (2001)
As the above diagram shows, a group with earnings of less than 1500 RMB
(including no earning power - but let's not exclude pocket money)
accounts for nearly 60% of the total Internet users. This is mainly
because the major part of China's online users are people aged between
18 and 24, who mostly are students, first jobbers or hanging out. Thus,
low priced and fashionable merchandise like software (including games
and applications), books and media-related products like CDs and VCDS
are the most wanted commodities. Unfortunately for manufacturers all
these products are the most heavily pirated, with the last estimation of
pirated software sales accounting for over 94% of all software sales in
China. Pirates tend to sell their products at a tiny fraction of the
real cost, from small stalls and street markets - certainly not the
A survey conducted by CNNIC in 2001 revealed that 31.6% of online users
shopped online because of the convenience, lower prices and the user-
friendly aspects of online-shopping. Though the Young Netizens have a
lower economic capacity, their spending power can't be underestimated.
Teenagers set trends, they are always keen on adopting new fashions and
are easily influenced by their peers. On the other hand, they are also
ambitious consumers due to their easily-come-by money received from
their parents. Very few Chinese students hold down part time jobs, as
rural workers often look to the service industry in the big cities for
their livelihood. The high percentage of bank cards is also slowing
breaking down the obstacles in the way of online payment. Hence, the
major potential perceived problems of Netizens are: the security of
online-exchange and the post sale service. If these problems could be
successfully solved, the future of online-shopping is much brighter.
Figure Source: CNNIC
The problems of online trade concerned by Chinas' Internet users (2001)
Establishing price through negotiation is almost a daily routine in
China, the Internet offers Netizens the opportunity to discuss prices in
"the virtual flea market" as one student put it. With the successful
experience of American counterpart eBay, " Bright minded Chinese are
gung-ho," said one student -describing the rush to emulate the trend.
The 'newness' of bartering online has attracted many Chinese Young
Netizens, about 80% of the users of Eachnet, one of China's most
successful online auction sites, are young people age from 18 to 30.
Some youthful users also treat it as the place to make their pocket
money, selling off bits and pieces around the house that maybe Mom and
Dad won't miss, which is partly the reason the auction sites have
flourished. Eachnet unfortunately introduced charges last August, to
weed out the 'non-serious' sellers, which somewhat dampened their
China's main auction/swap websites:
Eachnet China's most famous auction site, welcomed among young netizens.
Clubciti Site designed to face the all Chinese society without the
Coolbid Largest e-commerce site in Taiwan,
Lalasho Preshopping orientation site.
(source: Interfax, comments from students)
In spite of shopping online, Young Netizens still prefer to shop in the
real world. Advertisements play an important role in their behavior
while shopping. Besides their peers suggestions, Ads, appearing on web-
sites, Television, newspapers and magazines are usually define their pre-
shopping orientation in deciding what to buy. Some world famous brands
like Nike and Coca Cola, who set up their own unique trademark brands,
are easily accepted by these youngsters. A unique consumption culture
has gradually formed among China's Young Netizens.
The portrait of China's young netizens (age from 18 to 24) consumption
tendency, as defined by Interfax research
Digita MobileFashio Food Drink Music Movie TV Radio Magzin Comic
l phone n es / /
gadget Brand Brand NewspaCartoo
s pers ns
What' Digita MotoroEsprit MacDon Coca Pop Hongko MTV FM ELLE Japane
s l la ; ald's Cola songs ng and Discov 103.7 South se,
hot? Camera Nokia swatch KFC Pepsi from Americ ery FM Weeken such
; Ericss ; Pizza Hongko an Channe 101.7 d; as
MD; on Nike; Hut ng, moives l ShanghDetect
MP3; Taiwan . ai ive
PDA; and weeklyKonan,
wester ; and
n Shengj Slam
countr iang dunk.
Where Big Cell Big Around Every RecordTheate Music Radio News Shangh
to malls phonesdepart the genera stores rs; channe set stalls ai
get like ' met street l . and l, aroundforeig
it? Bainao storesstore. s stores DVDs & Docume the n book
hui(SH around Vcds ntary streetstores
) the rent channe s. , and
street stores l. news
s. . stalls
(source: Interfax, comments from students)
More students comments:
"The virtual community demonstrates a brand new way of life, almost
everything could be done through Internet in the near future."
"China's Young Netizens are the leading group, whose demands will
directly influence the climate of China's Internet."
"It is clear that in this furious Internet competition, who win the
hearts of Young Netizens, who win the battle."
Interfax reports, IQPC's Teen China, CNNIC: China Internet Network
Information Center affiliated with the Chinese Academy of Science.
TOP MARKETERS POINT TO INTERNET AS PATH TO CHINA'S YOUTH MARKET
At the Teen China event, attended by Interfax, marketers explained their
strategies for attracting young consumers in China, through the Internet, e-
mail and other media.
Gilad Coppersmith, business development manager of McCann Erickson China
said :"Apart from the Internet, I really don't think there's any other
media in China that especially is doing a good job of appealing to youth."
Coppersmith went on to say that he still feels that there is a gold rush at
present, as foreign companies attempt to establish a media presence in
China. "Pearson's (Pearson Broadband) recent deal with CCTV will allow
them to broadcast their programs nationwide, and at the same time promote
their other products with the media time made available to them. Today
companies should think about creating their own media to promote their
products, and that media can eventually pay for itself in the long term,"
Soo Yee Kim, from Jigsaw International said that following her company's
research into the market they found that China's youth are very
sophisticated, and that they often visit company web-sites to check out new
products, especially to see that in China they are getting the best and the
latest models of products like mobile phones. According to Kim the most
popular company web-sites and brands are sites like motorola.com.cn and
ericsson.com.cn. Following her research Kim found that Korea's Samsung was
considered the best brand for mobile handsets among China's youth, linking
to the current Korea fad in China. Kim also pointed out that the banned
Taiwan TV series F4, watched by many teenagers on pirate DVDs, VCDs or on
the Internet, was typical of the aspiration based content that appeals to a
youthful generation whose watchword is change.
Nickleodeon representatives, whose channel currently broadcast in a half-
hour daily slot on CCTV 7, said they are considering launching their web-
site in China sometime this year.
E-mail marketers Made For China (MFC) made a strong pitch for their
permission based e-mail site - www.51mail.com's services. According to
Byron Constable, president and co-founder of MFC, his site already
registered 10 mln users this year, where Netizens log in to specify their
preferences for lifestyle, entertainment, sport or other categories of
information. Constable's clients then email their targeted messages to the
groups who opt in to receive their messages. According to Constable a
winning e-mail will be forwarded to the Netizen's friends. To succeed an e-
mail has to be visually interesting, include sounds, be quirky and clever,
and not to obviously an advert to appeal to Netizens. Constable then
proceeded to show the conference flash animations featuring Liu Mang Tu (a
Korean animated rabbit) and Xue Cun (an obscure singer made famous by a
flash animation of one of his songs), both winners in the viral e-mail
sector. To produce an e-mail flash animation in China Constable estimated
a price tag of about USD 1,800 for design, and RMB 1000 (USD 120) per 3000
targeted users to send it through an e-mail marketing company
INTERNET BAR BANS REGULAR IN WUHAN
Bosses of an Internet bar in Wuhan expelled a customer in disgust, after
he lived on the premises for 60 days. According to Wuhan Wanbao the
customer took advantage of a monthly card, which allowed unlimited
access for the entire month. The management were surprised that the
customer in question refused to leave the bar, he played one particular
game non-stop, eating two ordered in boxed lunch meals and a packet of
instant noodles a day, drinking complimentary mineral water, sleeping on
the computer desk, and only using the restroom facilities for
rudimentary sanitation. After he had used up two of the monthly cards
the Internet bar refused to sell him another, "after 60 days without
changing clothes or bathing other net explorers would not dare to sit by
him," the manager of the bar told the paper.
CHINESE NETIZENS NOW HAVE 9 OPTIONS FOR INTERNET ACCESS
While China's Internet population has grown to over 54 mln this year,
the third largest in the world after the U.S. and Japan, competition
among Internet access service providers also has heated up. Chinese
netizens now can get access to Internet via 9 separate technologies:
PSTN, ISDN, DDN, LAN, ADSL, VDSL, cable modem, PON and LMDS.
The narrow band PSTN (Published Switched Telephone Network), or the
traditional dial-up, is the most widely used Internet access means,
which only needs a telephone line and a modem costing several hundreds
of Renminbi (tens of U.S. Dollars). The highest PSTN Internet access
speed now available is 56k/s. Users have to pay both Internet access
fees and telephone fees under the postpaid mode, or buy Internet access
cards under the prepaid mode. Common billing rate for PSTN is about RMB
4 (USD 0.48) per hour.
ISDN (Integrated Service Digital Network) used to the best choice for
Chinese netizens to enjoy faster Internet access speed, which can reach
a theoretical maximum rate of 100-128 k/s. But actually access speed is
much lower, and the narrow band ISDN does not support high-speed
applications like VOD (video on demand). ISDN needs a network terminal
NT1 and an ISDN adapter. An external network terminal costs about RMB
1,000 (USD 120) while an internal terminal is priced RMB 300 (USD 36) to
RMB 400 (USD 48). Monthly subscription fee of ISDN is about 1.5 times
over the common telephone line, and actual Internet access service will
cost double that of the PSTN. An outstanding advantage of ISDN is that
users can surf online and make telephone calls at the same time.
ADSL (Asymmetrical Digital Subscriber Line) and cable modem are the two
most popular ways for broadband Internet accesses. ADSL, mainly
provided by China Telecom and China Netcom, can provide an upload speed
between 640 k/s and 1 Mb/s, and a download speed of between 1 Mb/s and 8
Mb/s. Always online, so no dial-up is necessary. Of course, such
service needs more expensive equipment and a higher billing rate.
Common installation fee of ADSL is about RMB 300 (USD 36) and users also
have to pay a monthly subscription fee ranging from RMB 49 (USD 6) to
RMB 380 (USD 45.9) according to the service they select.
Cable TV operators are mainly providers of cable-modem Internet access
services in China. Leveraging the expansive current cable TV network,
the cable-modem now is becoming a serious competitor to the ADSL. There
are two kinds of cable modems, asymmetrical speed type and symmetrical
speed type. The former has a same speed for both upward and downward
data transmission, ranging from 500 k/s and 2 Mb/s, while the latter
supports upload speeds of 500 k/s to 10 Mb/s and download speed of 2
Mb/s to 40 Mb/s. Despite a similar billing rate with ADSL, the security
and access speed of cable modem Internet access is questioned because
local cable networks are not connected and none has its own Internet
backbone. Cable TV operators have to lease Internet ports from China
Unicom, China Telecom or China Netcom.
LAN (local area network) is the mostly used community broadband Internet
access method in China, which is based on Ethernet technologies. It can
provide over 10 Mb/s shared bandwidth, which can be upgraded to over 100
Mb/s. At present, China Telecom, Greatwall Broadband, Blue Wave Web and
local radio and TV operators are major suppliers of LAN services. Users
have to pay initiation fees of RMB 500 (USD 60) and monthly subscription
fees of between RMB 100 (USD 12) to RMB 150 (USD 18) according to user
hours. The comparatively low speed and the network security problem are
two major obstacles to the future development of LAN.
DDN (Digital Data Network) targets more corporate users rather than
individuals. Users can choose access speeds from 1x64K/s to 32x64K/s at
difference prices. A 128K/s DDN special line provided by China Telecom,
for example, cost lease fee of roughly RMB 1,000 (USD 120) a month.
VDSL (Very High Speed Digital Subscriber Line) can provide much faster
access speeds when compared to ADSL with copper lines. Upload speeds of
VDSL can reach 2.3 Mb/s while download speeds reach 55 Mb/s. But being
an emerging technology, VDSL can only realize effective transmission for
a distance of 1 km. Long distance transmission of VDSL still needs
PON (Passive optical networks) is a also new Internet access service,
which includes ATM-based PON and Ethernet-based PON. Users share 155
Mb/s bandwidth on one OLT (optical line terminal), and the access speed
can range from 64 k/s to 155 Mb/s.
Major Chinese telecom operators are pushing forward the utilization of
the LAN-based LMDS (local multi-point distribution system), or usually
called wireless LAN. The wireless access technology can bring a 25Mb/s
speed at maximum to each terminal user, and users of each base station
share a total bandwidth of 600 Mb/s. If there are too many users in one
base station, the bandwidth allocated to each user will be greatly
narrowed. China Netcom has launched the LMDS service under the brand
name "Mobile Office," for trial operations.
CADRES DISCOVER UNDERGROUND INTERNET BAR EQUIPPED WITH HIDDEN VIDEO
Following recent announcements that Chinese authorities plan to clamp
down on Internet bar operations in more remote areas, Beijing Daxing
District Administration of Industry & Commerce (AIC) announced they have
recently raided an underground Internet bar, located in the remote
Qingyundian cattle farm in Beijing. The AIC discovered the Internet bar
was equipped with a small video camera to warn those inside of any
The Daxing AIC Qingyundian office confirmed to Interfax that this
underground Internet bar was discovered through anonymous informers. On
the day of the raid, the boss was not found onsite. Five computers and
one fixed-line telephone set were impounded by Daxing AIC together with
the small video camera. The majority of the customers caught inside were
teenage students living in the neighborhood, some of who confessed to
playing truant frequently and indulging themselves in Internet games.
Presently the case is still under going.
Huo Yan, director of Daxing AIC, told Interfax that this was not their
first time to discover an unlicensed Internet bar in remote areas since
the four ministries began releasing regulations to guide Internet bar
operations, which have also been found in other districts of Beijing.
However an Internet bar being equipped with a covert mini camera was
In 2002, a series of nationwide checks was carried out by the Ministry
of Information Industry (MII), the Ministry of Culture, the Ministry of
Public Security and the State Administration for Industry and Commerce,
in order to close down all unlicensed operators. The crack down was
caused by concerns over 'information security,' the effect of games and
uncensored Internet access on students, and security of premises
following a fire in an Internet bar in Beijing.
10 COMPANIES LICENSED TO OPERATE NATIONWIDE INTERNET BAR CHAINS IN
China's Ministry of Culture (MOC) announced on June 8 that a total of 10
companies have been licensed to build nationwide Internet bar chains in
China. Apart from these 10 licensed operators, the ministry will not
issue new licenses in the future, and relevant application work as a
result has stopped.
"All these 10 licensed firms are big companies with operations covering
the whole country," a senior official within the Network Culture
Department under the Ministry of Culture, told Interfax in an interview.
"Besides these 10 nationwide operators, some companies, including China
Telecom and China Netcom, are building regional Internet bar chains in
certain provinces, which are licensed and administrated by local culture
authorities," he added.
10 licensed operators of nationwide Internet bar chains
China Youth Network Home Co. China Antique Information
Beijing Zhonglu Shikong Culture Capitel Network
China Digital Library Ltd. China Unicom
Asia United Telecom Network Co. CEC Huatong Communications Co.
Greatwall Broadband Ruide Investment Holdings Co.
Source: Ministry of Culture
The Chinese government has greatly enhanced control and regulation on
the booming Internet bar industry after a fire broke out in a Beijing-
located Internet bar that led to 24 deaths and 13 injuries. During last
year's massive rectification campaign, more than 3,300 Internet bars
were shut down. It is roughly estimated that there are over over 100,000
Internet bars all over China. The Ministry of Culture is seeking to form
nationwide Internet bar chains in a bid to phase out small Internet bar
operations, which are very difficult to monitor and regulate.
Read China to set up 2,500 Internet bars across China within 18 months
Read China, one of the major Internet service providers in China, will set
up approximately 2,500 Internet bars across China within one and half
years. The company plans on becoming a leader in China's Internet bar chain
industry within two years, Dai Shuyu, a PR official with Read China, told
Interfax in an interview.
Read China's Internet bars across the country will be set up in two styles,
corporate-owned bars and franchise bars. Although the corporate-owned bars
will be firstly set up as models for local franchise bars, the majority of
the company's Internet bar chains will be franchisee bars in the future,
The management of Read China's Internet bar chains will be conducted under
a principle of "five identifications" and "one centralization". "Five
identifications" entails that all of the company's Internet bars must use
identical logos, identical operation methods, identical service
regulations, identical ISPs and identical terminal software systems. "One
centralization" means that all the terminal PCs inside the company's
Internet bars will be monitored by a central management platform, located
in the corporate headquarter of Read China.
Read Investment Holdings, the parent company of Read China, is one of ten
companies that have been licensed to build nationwide Internet bars in
China. Furthermore, China's Ministry of Culture (MOC) has already announced
that it will not issue new licenses in the future upon such applications,
as Interfax previously reported.
The other nine licensed companies are China Youth Network Home Co., Beijing
Zhonglu Shikong Culture Development Co., China Digital Library Ltd., Asia
United Telecom Network Co., Greatwall Broadband, China Antique Information
Consulting Center, Capital Network, China Unicom and CEC Huatong