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Strategies & Market Trends : China Warehouse- More Than Crockery -- Ignore unavailable to you. Want to Upgrade?

To: RealMuLan who wrote (4832)	5/21/2005 3:20:32 PM
From: RealMuLan	Read Replies (1) \| Respond to of 6370

China's Future: A Nation of Geeks? Yahoo’s Terry Semel and eBay’s Meg Whitman say that the country could be their biggest market within a decade, but they'll face competition from Chinese companies. By David Kirkpatrick David Kirkpatrick To see the future of wireless, go to China. There, you’ll also find the future of online gaming. And hang around a year or two to see the future of battery power, just to name another fast-moving area of Chinese technology. You already knew that most of your electronic devices are made in China. But it is becoming state-of-the-art in the use of technology too. For instance, China has 350 million cellphone users, according to Information Industry Minister Wang Xudong, who spoke at the FORTUNE Global Forum earlier this week in Beijing. That’s more than any other country in the world. As for the Internet, about 100 million Chinese are already online. That puts it No. 2 behind the U.S. As more and more of its 1.3 billion people get online in the next few years, China will lead the world in this too. And it won’t be long before it becomes the world’s largest market for personal computers (it recently passed Japan to become No. 2). The most popular song in China recently has been a silly romantic ditty entitled, "Mice Love Rice." It originated on a blog. The once-anonymous singer-songwriter is now a national celebrity, and the song has been released commercially in both Mandarin and Cantonese. Four million Chinese now maintain blogs. What I realized at the forum is how comfortable China has become with technology. Many of the discussions at the forum, which included CEOs of the world’s largest and most important companies as well as Chinese business leaders and government officials, had a technology edge. Yahoo’s Terry Semel and eBay’s Meg Whitman, both of whom played prominent roles at the forum, both told me that China could represent the largest part of their business in 10 years. "It’s an incredibly dynamic and changing economy," said Whitman. "Every time I come here it’s a different place." She is so sure about China’s growing importance to the world that last year she helped convince her son to spend his senior year of high school living with a Beijing family. But while Yahoo and eBay are global tech giants, their market leadership in China is not pre-ordained. This country is too entrepreneurial for that. The biggest web portals are local—Sina and Sohu. Both are among the world’s top 10 Internet sites in terms of traffic. And eBay is facing tough competition in China from Taobao, which entered the online auction market later than eBay, but made its listings free, forcing eBay’s prices down. Both now claim to be No. 1 in China, but it’s a hard-fought battle, made more so by Yahoo’s auction joint venture with Sina. And the complex machinations around Sina indicate how much ferment there is in the Chinese Internet market. China’s most valuable Internet company, online gaming giant Shanda, recently bought 20% of Sina’s stock, uninvited. Shanda aims to pressure Sina into a closer relationship, possibly a merger, apparently to take advantage of Sina’s huge visibility for marketing purposes. Sina’s news site is so widely read that top government officials find it a daily essential just like the top print press, according to local Internet experts I spoke with. Shanda is a phenomenon in its own right. Over 200 million customers have registered for its online games, and two million can be online at any given time. No other online game company has numbers like that. In this hot and increasingly important area of consumer technology, China leads the world. You could see one reason the Internet is flourishing at the forum. Attitudes in China about openness—an inevitable accompaniment to Internet growth—are changing. When President Hu Jintao addressed the conference’s opening session, he said one of the country’s top priorities was to "improve democracy." That’s not to say China doesn’t remain a generally undemocratic and sometimes repressive state, but one doesn’t get the feeling here that people generally feel cowed. They seem more interested in personal progress and business success than in political activism. One surprise at the forum was how willing government ministers were to mix it up with the international attendees and tackle sensitive topics onstage. "I have taken a very challenging job which puts much pressure on me," said Wang Jingchuan, commissioner of China’s State Intellectual Property office. He didn’t mind sitting on a panel next to Dan Glickman, the former congressman and now head of the Motion Picture Association of America, who bluntly complained that 95% of all DVDs sold in China are counterfeit. Another plain-speaking official was Vice Minister Pan Yue of the State Environmental Protection Administration. "The proper future for China is green... socialist eco-civilization," he said, on a well-attended panel on China’s environmental crisis. Pan spoke warmly about the positive role of NGOs, some of whose heads sat in the room. Environmental protection came up over and over again at the forum as a Chinese government priority. President Hu said that the country needs to "vigorously develop the circular economy and build a resource-effective and environment-friendly society." U.S. venture capitalist Gary Reischel told me that because of priorities like this, he finds about four times as much university research into efficient battery technology in China as in the U.S. He plans investments in the sector soon. I leave China wowed not only by Beijing’s awesomely modern infrastructure, but also by the tangible sense of promise one feels here. Said Samsung CEO Jong-Yong Yun of Korea, in a meeting with FORTUNE’s editors: "China catching up with other countries is an inevitable long-term trend." I suspect none of the 800 or so attendees at the FORTUNE Global Forum would disagree. Next: Dangers of Playing Politics With China's Currency Questions? Comments? E-mail them to me at dkirkpatrick@fortunemail.com. fortune.com