Table of Contents

Comment Icon0 The grand task of watching Internet adoption and use in China fell upon the China National Network Information Center (CNNIC) working committee. Formed on 3 June 1997, the State Council’s Office for Information Promotion Leading Group directed the CAS to set up CNNIC within its own computer network information center, thereby turning it into the state Internet information center. By November 1997, CNNIC issued its first Statistics Report on Internet Development in China, where it highlighted how by October 1997, China had more than 290,000 PCs connected to the Internet and 620,000 Internet users, 4,066 registered domain names of cn, 1,500 websites and 18.64 Mbps of bandwidth for international outlets. The second Statistics Report on Internet Development in China showed how by June 1998, China had more than 542,000 PCs linked to the Internet and 1,175,000 Internet users, 9,415 registered domain names of cn, 3,700 websites and 84.64 Mbps of bandwidth for international outlets. The third Statistics Report showed that by 31 December 1998, China had more than 747,000 PCs linked to the Internet and 2.1 million Internet users, 18,396 registered domain names, 5,300 websites and 143 Mbps of bandwidth for international outlets. CNNIC issued the fourth Statistics Report illustrating how by 30 June 1999, China had more than 1.47 million PCs connected to the Internet and 4 million Internet users, 29,045 registered domain names, 9,906 websites and 241 Mbps of bandwidth for international outlets. This exponentially growing trend continued through the years.

Comment Icon0 By the time CNNIC issued its January 2005 report, the “15th Statistical Survey Report on the Internet Development in China”, there were already 94 million Internet users on the mainland by the end of 2004, a sharp growth of 152 times of that in 1997. Among the Internet users, the number of broadband users was 42.8 million. The number of computer hosts in China had risen to 41.6 million by 142.14%, up from 299,000 in 1997 over the past seven years. The numbers of domain names and websites registered under .cn were 432,077 and 668,900 respectively during the same period. China’s worldwide connectivity had also risen at rapid rates, with the total bandwidth of international connections in China reaching 74,429 Mbps. After modest beginnings in the mid-1990s, the number of Internet users jumped from 0.62 million in 1997 to 210 million by December 2007, making China rank second in the world in terms of the number of Internet users (CNNIC, 2009). In 2007, there were about 9 million domain names registered under China’s country code .cn, and 1.5 million websites in China (CNNIC, 2009).

Comment Icon0 As China’s government opened access to more information communication technology to the public, Internet connectivity started to go beyond fixed lines, as more Chinese users started to adopt mobile phone-based connectivity. Between 1997 and 2002, the growth rate of China’s telecommunication market was 20%, which was double China’s gross domestic product. The last few years saw the Chinese fixed-line and mobile operators investing an average of $25 billion United States dollars on the network infrastructure until 2004. With this level of investment, China grew from importing its first mobile phone telecommunication facilities in 1987, to gaining 10 million subscribers a decade later. By 2001, the Chinese became the largest users of both fixed network and cellular services in the world (Khan & Janjua, 2007). Within a decade, the telecommunication penetration rate had grown from 8.11% in 1997 to an astounding 66% in 2007. In July 2002, there were 201 million fixed telephone subscribers, as well as 180 million mobile phone subscribers, among which were 41.7 million Internet subscribers (Ministry of Information Industry, 2002). In September 2003, the number of mobile phone subscribers exceeded that of fixed lines. As of June 2005, there were a total of 700 million telephone subscribers, out of which 337 million were on fixed line while 363 million were on mobile phone (Khan & Janjua, 2007). By December 2005, the Ministry of Information Industry (MII) reported that China’s combined main lines and mobile lines exceeded 743 million. From January to August 2006, mobile phone users in the mainland sent 273.67 billion text messages (Gao, 2006). By the end of August 2006, there were more than 437 million mobile phone users, which meant about 327 mobile phones per 1,000 people. The combined main lines and mobile lines were expected to hit 976 million by 2008 (Xinhua News, 2008). A comparison between the cellular and fixed-line customers is shown in Figure 5, which illustrates that during the three-year period, the penetration rate of telephone had already doubled. This goes to show how the telecommunication industry is of strategic importance to the nation. China’s Ministry of Information Industry (2002) even reported that the industry reflected three times growth of the country’s national GDP in the last 10 years.


Figure 5: Growth of cellular and fixed-line customers in China (Khan & Janjua, 2007)

Comment Icon0 With the installation of advanced network technology to drive Internet Protocol (IP) connectivity across the metropolitan areas, China’s government has been determined to promote the Internet as a powerful communication medium to boost the nation’s economy. The Internet in China is still undergoing phenomenal growth, as it has revolutionized the ways Chinese communicate in their everyday lives. The rapid development of China’s Internet industry has now positioned China neck-to-neck with the United States in having the greatest number of Internet users in the world. Arguably, the New York Times, BBC News as well as numerous Western mainstream media shared the belief that sometime around June 2008, the number of Internet users in China reached about 253 million, placing it ahead of the United States with about 220 million Americans online. Based on a national phone survey by the China Internet Network Information Center (CNNIC) in Beijing, there was a powerful surge in Internet adoption in the country over the last few years, particularly among teenagers. In particular, the number of Internet users jumped more than 50%, or by about 90 million people, during 2007. Even though China may have the most number of online users, Internet penetration was still estimated to be a low 19% of the population. While developed nations such as the United States, Japan and South Korea have a fairly similar Internet penetration rate of about 70% of their population online, this report also underscored China’s immense potential for further Internet growth.

Comment Icon0 Interestingly, while China has made great strides in being ahead as an Internet-based superpower, this massive growth has also led to its fair share of problems. In September 2008, the director of IP business for CNNIC, Li Kai, highlighted that China would be running out of IP addresses by 2011 unless it makes the switch from IPv4 to IPv6, otherwise new Chinese netizens would not be able to gain normal access to the Internet (ChinaTechNews, 2008). While China’s population boom and exponential Internet penetration rate would have already led to this eventuality, this issue also recalled the problem of an uneven global distribution of “technological wealth”. Iljitsch van Beijnum of the respected technology blog, Ars Technica, noted how “[i]n the past, there have been stories about how China had fewer addresses than MIT or Stanford”. He further explained that this had since changed, with China recently passing Japan as the secondlargest holder of IPv4 addresses. China is now also the largest user of new addresses, with nearly 32 million addresses put into use this year, compared to the US’ 27 million, with Japan and Korea each using some 7 million, and Germany and Italy 6 million each (Beijnum, 2008). While IPv4 is currently the dominant Internet Protocol version, the Internet Engineering Task Force (IETF) has designated IPv6 as the successor. Simply put, the very large IPv6 address space supports 79 octillion times as many addresses as IPv4. As a result, this allows for greater flexibility in allocating addresses and routing traffic. The extended address length (128 bits) is intended to eliminate the need for network address translation to avoid address exhaustion, and also to simplify aspects of address assignment and renumbering, when changing Internet connectivity providers. While most in the industry would agree that IPv6 represents a major leap forward for the Internet, many also realize how the magnitude of a migration would affect so many millions of network devices. It is expected that there will be an extended period when IPv4 and IPv6 will co-exist at many levels of the Internet (Gunderson, 2008).

Chapter 4.2 – Trends in Telecommunication Development

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