TECHNOLOGY
JANUARY 12, 1998 VOL. 151 NO. 1
China Gets Wired
Sure, the censors still block some Websites, but Beijing
officials now agree that economic progress depends on
access to the Internet
By JOSHUA COOPER RAMO /BEIJING
t is a narrow room, a meter and a half wide, decorated with the
awkward minimalism that passes for modern chic in the still-communist
world: peeling white paint, tilting buffet tables, schoolroom chairs bolted
together into haphazard couches. The attraction here isn't the decor. It's the
machines--a beige Compaq Proliant 2500 computer and an off-white Dell
Poweredge-- hooked into a refrigerator-size rack of network routers, and
from there, via a thumb-thick black cable, to the infinite abundance of the
Internet. Edward Zeng, the 35-year-old Chinese entrepreneur who
commands this tiny outpost in the battle for information freedom, can't resist a
grin as he looks around the modest but astonishing room, buried in a warren
of offices in the bunker-like hallways under Beijing's Capital Stadium. As
state-sponsored basketball and badminton teams practice overhead, Zeng
fondles one of his purring servers and ponders an altogether more dramatic
kind of game. "Welcome to ground zero," he says.
There is very little you cannot have from Zeng's little room: Tibetan freedom
Websites, raunchy Danish porn, headlines from the New York Times. Zeng's
1,000 Internet subscribers can dial in to his computers from all over Beijing
and connect nearly limitlessly to the electronic world. They can send E-mail,
photos and news of China. And they can receive practically anything else.
When the government blocks a Website, as it still is wont to do from time to
time, Zeng's customers surf elsewhere. Is reuters.com jammed? They can
jump to washingtonpost.com. At night, hundreds of Chinese who don't own a
PC crowd into Zeng's six Internet Cafes, where Net time retails for $3.60 an
hour. Fast food for the information age. Zeng, whose Unicom-Sparkice
Information Network operates under a license from the government, says his
customers are hungry for every byte. "Don't you see?" asks Charles Zhang,
another Beijing Netrepreneur. "This is freedom."
This is China? In a country known less for freedom than for a historic fear of
information, Zeng and Zhang are signs that Beijing has settled on a firm and
astonishing policy for the Net: jump in with both feet. Though China still
blacks out dozens of sites (you won't read this story online in China: TIME's
Pathfinder site is on the list), a rising generation of Western-educated officials
is pressing home the argument that the Net is the perfect vehicle to transport
the Middle Kingdom into the 21st Century. It's as if Deng Xiaoping's dictum,
"To get rich is glorious," has collided with Moore's Law (of Intel founder
Gordon Moore), "The speed of microprocessors will double every 18
months even as prices fall by half," to produce something you might call Jiang
Zemin's Injunction: plug in, turn on, cash out. "The Chinese get the Net,
O.K.?" says Sean Maloney, the Asia-Pacific boss for U.S. chip giant Intel.
"China is going to be unrecognizable in five years. And a large part of that
change is going to come through the Internet and onto computer screens."
Maloney lets the idea sit for a beat as he ponders the idea of 1.2 billion
computer-hungry Chinese. "Unrecognizable," he marvels.
Maloney is taking his cues from China's bureaucratic stratosphere, where top
officials can't spend enough time chatting up Microsoft, Intel, IBM, Cisco and
other members of the Net's royal family. "We can barely keep up with the
demand for information," he says. Just last week the Chinese government
approved a new series of laws designed to control how citizens connect to
the Internet. But though the laws featured the usual restrictive rhetoric, they
were clearly designed to get Chinese onto the Net in an orderly way, not
keep them off altogether. The laws, and official curiosity about the power of
the Internet, have Beijing buzzing these days. From dinner parties hosted by
top officials at the Great Hall of the People to bull sessions among young
technocrat planners over cold Snowflake Beer in the cafes of Sanlitun, the
conversation has shifted from how to control the Net to how best to exploit
it. "The government is betting that PCs and the Net can help
competitiveness," says Thomas Lin, a Beijing-based product manager for
Microsoft. "Now they want them on every desk."
And in every home. Every rich promise you've ever heard about the Net
sounds especially beguiling in China. The country has 350 million children to
educate--what better vehicle than interactive television? The Finance Ministry
needs to establish bank and savings accounts for China's 284 million
workers--what more effective solution than smart cards? Agricultural
planners dream of more-productive Chinese farms--how better to send
weather and agro-science information to 323 million farmers than over the
Web?
To tap these benefits, China has embarked on a series of nine "golden
projects" that will shotgun state-of-the-art technology into everything from
health-care to finance. By 2010 hundreds of millions of Chinese will be wired
to the Golden Bridge financial network, carrying Golden Card smart cards
and automatically forking over a chunk of their salaries to the government via
a microchip-enabled Golden Tax. Says Bryan Nelson, Microsoft's
commanding general in the region: "China is going to be the ultimate proof of
all that the Internet can do. And the amazing thing is the Chinese seem to
understand that. Better than some people in the West, actually." At a recent
dinner in Beijing, Jim Jarrett, Intel's president for China, sat next to an 80-ish
woman whose 80-plus husband is a senior Chinese official. "She told me the
first thing her husband does every morning is start up his computer and sign
on to the Wall Street Journal and the New York Times," he recalls. "That's
his window on the world."
The window is still small--only 300,000 Chinese have access to the Internet,
vs. some 25 million in the U.S.--but it is opening quickly. Officials at China's
Ministry of Posts and Telecommunications say they hope to have 4 million
Chinese connected by the year 2000. At the same time, access to the outside
world from China--once tightly controlled over a narrow pipeline--has
quadrupled this year, the result of newly liberalized government regulations.
As late as 1996, most Net traffic to and from China had to flow through a
single 56-kilobit circuit in Shanghai--some U.S. homes have more bandwidth
than that. Now China has a pipeline a hundred times wider, and AT&T has
just been hired to make it even bigger. Will China really have 4 million citizens
online by 2000? "Try 20 million," says Zhang, who has watched the
government exceed growth targets in everything from telephones to
agricultural output.
Actually getting onto the Net is still difficult for the vast majority of Chinese.
An Internet account requires a trip to the local phone office, which includes
(after hours of waiting in line): your signature on an intimidating-sounding
agreement not to violate dozens of Net rules (no pornography, no using the
Net for anti-government activities, no downloading viruses), a registration
with the police of your intent to surf and a hefty deposit--generally about
$120, or more than a month's income for most Chinese. But the Net has such
allure in improvement-obsessed China that usage continues to grow at more
than 40% a year--doubling the country's Net population every two years.
"It's a daily necessity," says Beijing Foreign Studies University student Zhang
Tao. "I plan to get online soon. I feel like I miss a lot of things. I don't want to
lag behind."
That fear of falling behind has led the government to quietly approve one of
the most revolutionary features of China's new Net openness--a willingness
to let select firms run unregulated leased-line networks from Beijing, Shanghai
and Shenzhen directly to Hong Kong. From there, the entire Web beckons,
uncensored and unmonitored. Walk the halls of high-tech companies in
China, and you see Websites from around the world reflected in the
eyeglasses of young Chinese engineers. As you watch these young surfers
poke into any site that interests them, you can't help but think: these are the
faces of Tiananmen--young, well-educated and now, more than eight years
after the crackdown on Beijing's pro-democracy movement, enjoying
essentially unlimited access to the outside world. "Nobody could have
anticipated this," says Hong Lu, chief executive of UTStarcom, a
wireless-communications firm that has been working in China since 1991.
"The speed of change is so fast that all of your assumptions are wrong."
Among the wrong assumptions: that this gigabit-glasnost is just a passing
phase. "This is a revolution," says Zeng, who plans to open 100 additional
Internet Cafes throughout China by 2000. "I don't think there's any risk of
turning back." Zeng's confidence comes from a sense (more than a sense
actually--he serves on two government committees) that at the highest levels
Chinese leaders are sold on the Net. The theory behind their enthusiasm is
that technology and competitiveness are deeply linked. Much of this comes
from China's ninth five-year plan, which was unveiled in 1996 and fired a
kind of starter's pistol in the race for new technologies. After decades of
autarchy, China began to look outside for the latest innovations. How to
adapt technologies like computer networks and pagers to China's unique and
delicate culture? The age-old mantra is still zhongxue weiti, xixue weiyong:
Chinese thinking for our essence, Western learning for application. It's an
idea with deep roots. "You don't have to look too far back in Chinese history
to understand that this is a nation that has suffered because it didn't have the
best technology," says Intel's Maloney. "The British were able to run wild
here in the 1800s, not because they were better fighters but because their
technology was 100 years ahead of China's. The Chinese don't want that to
happen again."
But there's a catch: China still may try to build the electronic equivalent of the
Great Wall around the country. Citizens would have easy access to domestic
Websites but sites outside the mainland--cnn.com, for instance--might be
blocked. China would become one big, self-contained Internet--what techies
like to call an Intranet--sealed off from the rest of the world. Access to
foreign sites would remain under government control. Says a Hong Kong
engineer who has worked with China on high-level info policy for two
decades: "The Chinese worry about the Net. Will it just be an inundation of
Western content, or will it reflect Chinese culture? China has every right to
find a balance between local and foreign content."
That's a balance the most nimble Chinese gymnast would find tough to
maintain. The Net, after all, is fundamentally about openness. And if the idea
of the Web is to make Chinese firms more competitive, that means letting
them have access to everything from DuPont's chemicals Website to the U.S.
Patent Office's listing of new inventions. For that reason, some Chinese think
the government will drop all its talk about an Intranet and throw open the
doors. Says a 24-year-old engineer at Sparkice: "Walk into any Chinese
company with Net access and look at the hard drives, look at the bookmarks
in the browsers. It's all U.S. content."
Even the most vigorous Net-proponents argue for a bit of patience. "Some
control is needed at this point because otherwise China would go wild," says
UTStarcom's Lu. "If you just jump too fast, it's not good." In an early attempt
at a Net policy, the government in 1996 banned access to a range of sites,
from playboy.com to time.com, in order to help combat "spiritual pollution."
But an afternoon's surfing in Beijing shows the government fire walls that
block access to these sites work only with limited success. While cnn.com is
resolutely blocked, other Western news-focused sites are occasionally
accessible because of software glitches on the black-out servers. And most
Chinese with Net access are smart enough to find what they want even in the
face of a watchful, nervous government. One group of university students in
Tibet fired up a browser in front of a reporter recently and pointed the
program at the most controversial site they could imagine: Bill Clinton's own
www.whitehouse.gov. The opening screen, "Good evening from the White
House," came up with no problem at all.
The job of policing the net falls to a rapidly growing team of full-time surfers
inside the Public Security Bureau (PSB). Says an engineer who has seen the
room in Beijing where the work goes on: "It's something of a joke. Here you
have all these bureaucrats sitting around looking at dirty pictures all day. They
know they can't control it. There are too many sites. They just want to stop
the most high-profile sites for form's sake." Lin Quan, secretary-general of
the State Science and Technology Commission, told a conference this year
that official censorship would not be allowed to stop the growth of Net use.
Instead, the government, like those in other countries, primarily wants to
protect public morality.
The government has, however, been quick to stomp on any politically themed
electronic bulletin boards. In the past few years the PSB has shut down
several that were gaining a following. "No bulletin boards for us," one
Chinese content developer swears. "That's looking for trouble." But you don't
have to scrape very deep to find a political undercurrent to much of China's
Net activity. A few curious E-mails sent from the U.S. to Chinese who had
posted messages to international Net discussion forums yielded replies that
were prompt and unfettered. "We use the E-mail to think what we want," one
hacker from Nanjing wrote. "But watch out for these guys [in the
government]. They're our KGB!"
The KGB, though, is losing to the MPT--the Ministry of Posts and
Telecommunications--which is pushing for a large Chinese Web presence.
The MPT is encouraging local entrepreneurs to create Chinese-language
versions of the same sort of electronic resources--from search engines to
weather services--that are popular in the West. The number of Chinese Web
pages has exploded from fewer than 100 in 1994 to more than a quarter
million today, offering everything from book reviews to travel guides. Says
Netrepreneur Zhang, an MIT-trained physicist who is dreaming of creating a
Web-based media conglomerate: "Print publishing is very restricted in China,
but the Net is considered a technological area. So we can do a lot of things
without running into trouble." Already Zhang has licensed content from U.S.
publishers and hired a local staff to create Chinese-language Web pages. His
next step, inevitably: a stock market offering.
The MPT in Shanghai is funding a local-information network called the
Infoport that will offer Chinese everything from maps of the city to electronic
bill payment. Already the Shanghai Stock Exchange, working with Microsoft,
has built a Website (www.stockstar.online.sh.cn) that offers real-time price
quotes--something even the New York Stock Exchange hasn't yet managed.
And Shanghai officials promise that the Infoport will become a Chinese
Alexandria, the largest virtual library in the world. Zhang Linde, general
manager of the project, is a patient, ambitious man: "Judge us in 2010," he
says.
There are plenty of obstacles to overcome between now and 2010. But the
two biggest--thin ownership of both personal computers and telephones--are
fading. Last year, Chinese purchased 2.1 million PCs, up from 190,000 in
1992. When figures for 1997 are in, PC sales should top Japan's, and by
2000 China will be a bigger market than the U.S. Telephones are also
proliferating, from 70 million in 1995 to 100 million today. To install the first
million phone lines in Shanghai took from 1893 to 1992; the second million
required two years, and the next two million only 18 months. And China is
busy installing a sophisticated fiber network that rivals anything in the West.
The government has invested $28 billion on more than 100,000 km of optical
fiber that now links 85% of the country. And in a land where guanxi
(connections) are vital, marrying the PC and the telephone is an idea with
resonance. "It's not just know-how here in China, it's know-who," says Mark
Mechem, a U.S. trade official in Beijing. "E-mail is the ultimate guanxi tool."
Perhaps the biggest obstacle to the growth of computers and the Net in
China is the tyranny of English in the digital world. Western-style keyboards
aren't set up to type Chinese characters. The best system for doing so, the
stroke-based input method editor, was devised in the 1960s and involves
using complex three- and four-key combinations to enter specific characters.
Where Westerners can be taught to use a standard keyboard in hours,
learning to type in Chinese can take months. Worse, the Web, which is still
largely rendered in English, is impenetrable to the vast majority of Chinese.
Technology is solving many of these problems. Already, ingenious local
programmers have hacked together a program that translates
English-language Web pages word by word. Users simply point their mouse
at a word they don't understand, and a translation appears on the screen. The
future holds greater promise: Intel and Microsoft are each spending millions
of dollars to develop Chinese-language voice-recognition systems that will
obviate the need for a keyboard. Possibly as soon as 2005, Chinese will be
able to talk to their computers and see their words on the screen. Intel's
Maloney, for instance, suspects voice recognition will open up the PC market
to more than 100 million new Chinese customers.
It's a dazzling proposition that has lured the best and brightest U.S. tech
executives to China, confident that it will be the next infotech bonanza.
Microsoft's Nelson, who has quietly watched his sales double and then
double again, is expanding his staff and investing huge amounts of time selling
the Microsoft message everywhere from Shenzhen to Nanjing. "There's no
real mystery here," he says over dinner at a restaurant in Hong Kong, where
he is based. "We've been into hundreds of markets where there's no
information-technology business. And we know how to build those
businesses. This just happens to be the largest market in the world."
Insiders say Nelson, whose Hong Kong office is sprinkled with totems of
quiet power (photos with Bill Gates and Deng, for instance), is among the
most powerful Westerners in China, a man who can get any call returned.
Among his latest coups: a deal with the Communist Party newspaper
People's Daily to build a state-of-the-art Website using Microsoft
technology. Though Microsoft still faces tremendous piracy and counterfeiting
problems--some estimates suggest that only 5% of Microsoft's programs are
used legitimately--Nelson thinks the problem, with patience, is fixable. "It's
simply a matter of education." Already Microsoft has launched an advertising
campaign to explain that while information may want to be free, the software
that delivers it isn't.
Many Chinese already understand that. In their eyes, the Net is as much a
tool for the rapid creation of wealth as anything else. Zeng's Sparkice, for
instance, recently won a contract to put details on 750,000 private, state-run
and joint-venture businesses into a Web database. When the project is
complete in two years, firms from around the world will be able to use the
Net to interact with Chinese companies. A Singapore concern looking to sell
bamboo roofs will be able to bid on a Shanghai construction project via a
Web browser. Sparkice will take a piece of every deal. "It's win-win," says
Zeng. "The government wants to promote these companies. The companies
want to advertise, and we want the business." Zhu Wei, 44, who runs the
research institute of the Science and Technology Commission and serves as
president of Wanfang Data Corp., a state-funded info-services business, says
a new appreciation of technology is quickly taking root. "There's a popular
saying in China now: modernization means knowing how to master a foreign
language, drive a car and use a computer," he says. "If you want to survive in
the information age, you have to know how to use a computer."
Still, it's not clear that China will ever have the sort of open information
society that has become commonplace in the West. So far, access to the
world of the Net is still limited to China's elites. It's not hard to imagine a
two-tier information society, along the lines of something in Plato's Republic,
with a small group of info-haves dominating a much larger group of
have-nots. Arrayed against this vision of limited freedom, however, is the
Net's record of openness everywhere else it has landed--and even a sense
among some Chinese that the Net may be the country's last, best hope of
modernizing. "Much has to change here," says Michael Tung, a Beijing-based
telecom engineer. "Technology is the only way."
The ultimate question is whether Jiang Zemin's government will continue to
allow such information gifts to float into China. Amid the pressures of
Communist Party politics and the demands of managing a nation of 1.2 billion
people, will he be able to tolerate the triple threat of an Internet society:
openness, transparency and democracy? Smarter, better-informed
businessmen may be more competitive in the new global economy but they
are also, inevitably, better informed about life in the outside world--and the
rights and freedoms that China doesn't yet permit.
Jiang, however, may be China's Surfer-in-Chief. In a recent interview with
TIME, he confided that he has a PC at his Zhongnanhai home and uses it to
log onto foreign data bases. And top officials insist he is committed to a wired
China, fully aware that the country's future depends on growth, which relies,
in turn, on technology. Is it just possible that the real great leap forward
begins with the initials www?
--With Reporting by Jaime A. Florcruz /Beijing |
