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November 13, 2003
Study Shows Market Competition and Government Encouragement are Key Drivers of Growth of the Internet in China
Findings Detail Attitudes and Demographics of Chinese Internet Users Case Studies Document Social Impact in Chinese Society

New York, NY - A two-year study of Internet use and its impact in China reveals that the key drivers behind its growth are market forces, including people's increasing desire to go online and competition among service providers, and the government's view of the information technology sector as an engine for economic growth. The study also examines the demographics and attitudes of Internet users in China, finding that a majority of them expect the Internet will bring more freedom of speech and create more opportunities to express their political views.

Surveying Internet Usage and Impact in Twelve Chinese Cities is based on door-to-door interviews with 2457 Internet users (and 1484 non-Internet users) and was directed by Professor Guo Liang of Beijing's Chinese Academy of Social Science (CASS). In addition, case studies were conducted in five small cities. The project, developed and supported by the Markle Foundation, is a unique, in-depth look at Internet usage in China and its impact on Chinese society. The complete study is available at www.markle.org.

The report identifies the main drivers behind the growth of the Internet in China as:

• Internet Companies - Competition among Internet service provider companies has lead to low costs, better services and more access. The report notes that unlike other sectors in China, a single state-owned company does not control the Internet industry.
• Government - The Chinese government considers the IT industry an engine of economic growth. In addition, the Chinese government has created an aggressive e-government program to better share information between government agencies.
• Individual User Demand - The Internet provides a new and exciting source of entertainment and a way to communicate, especially for young people. The Internet also makes it easier to find information than through the traditional media and is a place where people can express their own opinions.
• Internet cafés - While the number of Internet cafés has greatly decreased in the metropolitan cities due to the government's efforts to avoid social problems," the number of Internet cafés in provincial capitals and small cities is growing rapidly.

"China is second only to the U.S. in the number of Internet users, with the number of users growing rapidly. The Internet has the potential to contribute significantly to the future of the people of China," said Zoë Baird, president of the Markle Foundation. "Professor Guo's findings show that in China, the Internet has the ability to expand the flow of information and spur economic growth."

"With the arrival of the Internet, the Chinese people have the opportunity to access information, communicate and conduct economic transactions in a new way," said Professor Guo Liang. "The findings of our study suggest that while the Internet is still relatively new to China, it is already changing Chinese cultural, social and political institutions."

The study also details the attitudes and demographics of Chinese Internet users and examines the emergence of e-business as well as the Internet's impact on media, communications and politics in China. Other key finding include:

• 71% of Internet users and 69% of non-users agreed that the Internet gives people more opportunities to express their political views.
• 79% of Internet users and 77% of non-users agreed that the Internet gives people a better knowledge of politics.
• 79% of Internet users and 73% of non-users agreed that the Internet will give government a better understanding of the views of its citizens.
• 60.8% of Internet users and 61% of non-users agreed that the Internet gives people more opportunities to criticize government's policies.
• 54% of respondents (users and non Internet users) think online content is reliable. However, 50% of respondents think that it is necessary to "manage and control" the Internet.
• 56% of Internet users are male and 58% are between the ages of 17 and 24.
• 62% of Internet users have access at home. 41% of users access the Internet at Internet cafes.
• 57% of Internet users go online to browse and read news. 51% said they go online to use e-mail, 49% for music, 36% for instant messaging, 5% for online shopping and 2% for online banking.

Internet use in China is growing rapidly, with the number of users having reached 68 million in July 2003. China has surpassed all countries in the world, with the exception of the U.S., in number of people online, with new users going online daily.

Professor Guo is deputy Director of the Center for Studies in Social Development at the Chinese Academy of Social Sciences in Beijing and one of the preeminent observers of the Internet in China. He is the author of several books and has published several articles about information technology developments in China.

About the Markle Foundation

Emerging information and communication technologies possess enormous potential to improve people's lives. The Markle Foundation works to realize this potential and to accelerate the use of these technologies to address critical public needs, at present principally in the areas of health care and national security.

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