Your right on the number of internet users in China today and in 2000. Your too conservative on VCD player units. It's because of the lack of wired telephones. Here's the USA Today article.............................
China Turns to the Net
[November 14--USATODAY] The Internet is at a very different time and place in China.
The Internet is tiny here--about 300,000 users. It's under the thumb of the government, which controls all access, screens content and makes users register with the police. Yet it's surging ahead, wriggling out of the government's grasp as mainstream middle-class families get online.
Tiny Internet start-ups, many on the edge of the law, are sprouting in Beijing's high-tech Haidian district. As AT&T signed a deal Thursday with China Telecom to help boost China's Internet link to the rest of the world, China Telecom predicted there will be 3 million to 4 million Internet users in the nation by 2000.
Two recent stops in Beijing say more about the Internet in China than volumes of official reports. The first is the two-room apartment of Zhou Jianguo and his family--Internet users since August. The second is the cramped offices of U-net, an aspiring Internet company staffed by recent graduates of Beijing and Tsinghua universities.
Zhou, 45, is upper middle class. He works in personnel at the People's Bank of China, where he has used a computer for several years. In 1995, the bank sent him for a course at Stanford University in Palo Alto, Calif., and he used the Internet for the first time. Zhou is energetic, animated and patriotic. He speaks a little English. On a Saturday, his hair is mussed and he wears a blue shirt, dark pants, socks and sandals that say "Golf" on them.
Buzzing around the apartment are his wife, Liu Yan Ping, 45, and his daughter, Zhou Nan, 11. The apartment, midway up a gray high-rise on a traffic-clogged street, is jammed floor-to-ceiling with stuff. In one tiny room are a TV, a piano, several bookshelves and cabinets, a couch, Nan's dolls, a small Chinese flag and a computer.
Like a lot of PCs in China, Zhou's doesn't sport a brand name. About two years ago, Zhou bought parts, including an Intel 486 chip, and had a freelancer put them together. The finished product looks a lot like any PC you'd see anywhere. Zhou has continued buying parts, adding more memory and a CD-ROM drive. His PC runs a Chinese language version of Windows 95 and Netscape Navigator 3.0.
He says he bought the PC to do work at home and track bills and so his daughter could use educational software. His wife, Liu, concocted a compelling application for overcrowded Chinese life: "We have a lot of things in this room all stacked up," she says. "I register them in the computer along with where they are. If I can't find something, I look in the computer and it tells me where it is."
The family has relatives in Shenzhen, China, and in Canada. Phone calls are expensive. Zhou started thinking that e-mail could save them money. So he looked into the Internet, which had yet to catch fire in China. The government, suspicious of easy access to potentially liberating information, kept the lid on until it could figure out how to control access and block sites. There had never been much demand, anyway. Even now, far less than 1% of homes in China have PCs.
Finding a way on line
Zhou could have picked from about 40 Internet access companies in Beijing. Internet access has been available to home users since 1996, when China's state-run phone company, China Telecom, first offered home Internet access and let independent companies resell access.
Zhou chose access through Beijing Telecom, the local flavor of China Telecom. To sign up, Zhou had to physically go to Beijing Telecom's office. At one window, Zhou signed a letter promising not to violate a long list of rules, which include bans on downloading pornography and using the Net for anti-government purposes. He went to another window, where he registered with the police. "I'm sure the police have some way of controlling the Internet," Zhou says matter-of-factly.
The service costs 100 RMB ($14) a month for six hours of access. Zhou never goes over the six hours, after which it costs 10 RMB an hour. Few consumers in China--including Zhou - have a credit card, so they can't just sign for the service. At Beijing Telecom, Zhou had to put down a deposit of 1,200 RMB for a year. "It's not too expensive, I don't think," Zhou says--though it would be prohibitively expensive for the vast majority of Chinese. Most make less than 1,200 RMB a month.
Since getting on the Net, the Zhou family has come to rely on e-mail, but they've done little Web surfing. For one, there is little Chinese language or China-based content on the Web. Second, there is only one trunk line that connects all of China's Internet with the rest of the world's Internet. That's the one AT&T will help expand. But for now, the connection can be excruciatingly slow. Sometimes, when people in China think the government has blocked all Western Internet sites, it's really because the lone pipe is jammed or has gone down.
Zhou has a 33.6 modem, but pulling in Yahoo's main menu can take several minutes, eating away at his six-hour monthly limit. Daughter Nan is not allowed to surf. "I use the Internet only to write letters to friends abroad," she says.
Does Zhou get frustrated that China blocks some Internet sites? "I don't know if any sites are blocked because I don't visit them," he says. Among sites China's government blocks are Playboy and Time online magazines. "They should block some things. People like us are not involved in that kind of activity. We only want to do useful things."
When his wife Liu begins to say something about reading about politics on the Net, Zhou surreptitiously kicks her under the chair to get her to stop.
And yet, Zhou and his family say they've clearly felt the power of the Internet. "It's not possible to restrict the Internet in China in the long term," he says. "For people like my daughter, this will follow them wherever they go. They are more open to new ideas. It will help with freedom of speech."
Welcome to U-net
Haidian Road, in the Haidian district of Beijing, is an electronics carnival. A constant flow of cars, bicycles and pedestrians jockey for position on the broad avenue. Twelve-foot-wide shops packed next to each other sell computer parts, printers, modems and whole systems, many of them made in China. A shop called Dr. Gold advertises a Pentium 166 megahertz machine called Golden Baby for 6,450 RMB--less than $1,000.
On the 12th floor of a glass office building in the middle of this cacophony are the offices of U-net, one of the dozens of start-ups in China searching for ways to gain some traction in the Internet industry. It's a struggle.
Twenty worn desks are parked inside cubicles of an odd pinkish nature. PCs sit on many desks. Around a corner is a high-powered computer server from Sun Microsystems and a router from Cisco Systems--the engines of U-net's Internet access business. To the side is a conference room of dirty white walls bearing a large map of China, a tile floor and a bare table. Zhang Xinhua, 21, U-net's head of marketing, brings tea in thin plastic cups. He's joined by Zhu Zhuoming, 40, the general manager. The other employees are under 25.
U-net has been in business three years. It has 400 subscribers and loses money on them all.
China Telecom has an absolute grip on the Internet. It is the biggest Internet access provider. Other companies that want to sell Internet access have to essentially resell China Telecom service. Part of the deal is that no company can charge more for access than China Telecom charges. China Telecom charges its customers 12 RMB per hour. U-net has to pay China Telecom 10 RMB per hour for each connection. To try to lure customers, U-net sells access at its cost--10 RMB per hour, about $1.40. "All ISPs in China lose money," Zhu says.
To get service from U-net, customers would go through the same process Zhou Jianguo went through at Beijing Telecom, signing the forms, registering with the police and making a deposit. U-net charges a 100 RMB fee to open an account. For 200 RMB, U-net will come to your home to install the software.
Will Internet business become more open and competitive in China? Zhu shrugs: "I've heard the policy will be changed." What money U-net makes comes from helping businesses use computer networks. It has connected 15 Beijing hotels in a network so they can share information. "For now, we concentrate on business customers," Zhang says. "It's more money."
As Zhou and Zhang talk about some of their activities, it seems they are unclear which are perfectly above-board and which skirt China Telecom's rules. That's not unusual, China watchers say: China Telecom has been known to suddenly change the rules in its favor, or decide to enforce long-forgotten rules. A couple of times, Zhu asks that something not appear in print for fear of repercussions from China Telecom.
If all that makes U-net sound like a difficult, depressing place to work, it's not, the employees say. They are as gung-ho as the staff of a Silicon Valley start-up. "I came here because I believe the Internet will be prosperous, and I love it very much," says Zhang. He and his colleagues are some of the nation's brightest young computer minds, and they are pouring their lives into this wobbly little enterprise.
By Kevin Maney, USA TODAY |
