When entrepreneur Benjamin Joffe described Internet in China as a well-protected ecosystem with unique digital species he put the finger on something important: Internet in China is different. The country is challenging our ideas about what Internet is, and as its influence grows this will get global implications.
Nowadays, it more or less seems to be common knowledge that the Chinese Internet is censored, and that many of even the most globally essential sites are nowhere to be found in China. At the same time, many underestimate the sophistication of the country’s IT industry. So what is the most important things to know about Internet behind the Great Firewall?
The Sheer Size of It
There are more than 650 million Internet users in China today, and the number is growing fast. This makes China the country with the largest number of users in the world. Nonetheless, this still only includes 50% of the total Chinese population - about the same percentage that is residing in cities.
The rapid growth in the number of Internet users are the result of targeted strategies from the Chinese government. The latest Five-Year-Plan prioritizes digitisation across the economy and the growth of the online sector. The government has also launched the Broadband China strategy, in which it is aiming for nationwide broadband connectivity by 2020. This means that the growth of Internet users is not set to stop any time soon.
China is leapfrogging into the mobile Internet sector. Today, the majority of new Internet users are connecting on mobile devices. This was not always the case. The launch of 3G-technology was delayed in China due to authority’s decision to promote a domestic standard. Perhaps to compensate for the delays, mobile operators are rapidly expanding their 4G networks. One year on from the launch of the first 4G services, there was already more than 200 million 4G users. The development of cheap smartphones is also helping, with companies as Xiaomi constantly cutting prices and releasing more powerful devices. This means that a smartphone is affordable for most Chinese today - not to mention these devices are selling far beyond China's shores.
Under an Watchful Eye
It might seem surprising that an authoritarian regime is promoting the Internet so vigorously, but the Chinese government is the strongest supporter of the industry’s development. The government sees Internet as a channel for growth and is confident that they can remain in control.
In official documents, the government’s clearly stated goal is to bring the Internet under the jurisdiction of the state. The government makes no secret of the active censorship of online content. Internet services that does not accept the authority of the Chinese regulators face consistent problems, and even Google has not been immune to the pressure. Other foreign services like Facebook and Twitter are also off-limits. It should then come as no surprise that many of the leading Internet companies in China have very close relationship with people high up in the government.
Due to the extensive censorship of Internet in China, the industry has been protected from much of the competition on the international arena. This has given the Chinese Internet ecosystem some unique characteristics.
The first: with essential Western social media services blocked in China, copycats are effectively filling the gaps of a blocked foreign companies. However this unique ecosystem is also fostering truly innovative companies.
In fields such as eCommerce and messaging, the industry is showing impressive novelty and could in some aspects be seen as a global leader. Wechat has been an inspiration for the development of Facebook for mobile platforms. The fierce competition in the eCommerce sector is speeding up delivery and leading to ever more competitive prices. As the industry matures we can expect to see even more innovation coming out of the Chinese Internet industry.
The startup movement has already reached the country with full force and innovative firms are popping up at an unprecedented rate. The Chinese government is also pulling their weight to support the industry, notes Silicon Valley veteran Steve Blank. In January this year, Chinese Premier Li Keqiang presented his plan to support start-ups and what he calls “entrepreneurship in the Internet age”. This will include more support for small innovative companies as well as reforms to make it easier to run a business, which makes it an exciting time to be in the Chinese Internet industry.
So what can we expect from online Chine looking forward? China is trying to establish its own model of administrating the Internet. A model that brings Internet under the jurisdiction of the government but at the same time is open for innovation and development. Whether this will be successful or not is impossible to say. What we do know however is that this this challenging view of what Internet should be will get global implications.