China's Internet Structure: Problems and Control Measures

By Rayburn, J. Mike; Conrad, Craig | International Journal of Management, December 2004 | Go to article overview

China's Internet Structure: Problems and Control Measures


Rayburn, J. Mike, Conrad, Craig, International Journal of Management


The Internet has transformed the economically advanced countries of the world into an e-commerce environment. The Internet in China is composed of a four tier system which is connected through a fiber-optic grid matrix. The Chinese government controls, censors and monitors all aspects of their Internet system and the international gateway which connects China to the World Wide Web. There is also unclear delineation of jurisdictions over encryption technology and domain names and lingering questions concerning e-commerce tax, security regulations, state secret regulations and access questions. This control leads to increased risk for foreign firms doing e-commerce business in China.

Introduction

Individuals in the economically advanced countries of the world have been transformed by the implementation of the Internet. There has been a fast rate of growth of the Internet in the last ten years. There are over 100 million network hosts, some 200 million personal computers connected online and more than thirty million websites on the worldwide web. In addition to increasing the world's communication capabilities, the Internet has had large social and economic impact. Users perceive the Internet to be one single homogeneous network. However, it is an integrated heterogenous network of networks which have end-to-end design architecture and transmission and control mechanisms. The fixed cost of joining the network is minimal (Paul, 2002).

Several years ago, one of the main reasons that the Internet was not popular in China was the scarcity of Chinese language content on the Internet. Today, this is changing (Kennedy, 2000a). It is projected that the Chinese language will be the second most popular language, after English, on the Internet by the year 2005. China has ten million people on the Internet today, and this number will expand to 300 million by the year 2005. Personal computer sales are expected to exceed twelve million units a year. The Internet is converging with cable television which already reaches 100 million households, and cellular telephone use will exceed 100 million units in the next three years (Hale, 2001). With this explosive growth of the Internet, the Chinese government is attempting to devise laws and regulations to oversee its development (Lapres, 2000). The Chinese government's aim in regulation and control of the Internet is to restrict access to politically harmful information and to safeguard national security. The Chinese Communist Party wants to enjoy the growth resulting from Internet technology and at the same time retain control over the free flow of information (McCarthy, 2000). In China, outlets for liberal political ideas have multiplied rapidly on the Internet through informal discussion groups. In a time of rapid economic and social change, China's leaders clearly view this growth trend as a threat to their political power (Rosenthal, 2000a).

China's Internet Structure

Since 1993, a fiber-optic grid has been laid across China. Eight, high capacity fiber-optic lines run north-south, and eight, high capacity fiber-optic lines run east-west connecting China's principal cities. This net has allowed the state telecommunication monopoly, China Telecom, to install new telephone lines at a rapid rate. In 1990 there were fewer than 10 million telephone lines in China. At present there are over 125 million lines with more than 2 million being installed each month. The speed with which cities are becoming connected through high capacity lines has allowed the Internet to surge through Chinese society. China has invested over $50 billion in telecommunication and data processing hardware (Wired China, 2000).

China's Access Control

The government of China has been able to effectively firewall the entire country and control connections with the rest of world's Internet and to also monitor the content of internally generated traffic. This control and monitoring by the Chinese government is possible due to the relatively small number of paths connecting its domain to the rest of the world network. …

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