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Lehman Lee & Xu - China Lawyers, Patent and Trademark Agents

CHINA INFORMATION TECHNOLOGY LAW NEWSLETTER

Vol. 2, No. 13 - September 25, 2001

TOPICS THIS ISSUE:

  • China Holds Digital City Conference in Guangzhou
  • Router Technology Seen as Breakthrough for the Internet in China
  • Competition in China's free Email Market Heats Up
  • Results of the First Survey of the Internet in China
  • China Digital Library Corp to Set up Digital Content Service Platform
  • Online Auction of NPAs a Success

China Holds Digital City Conference in Guangzhou

A three-day conference entitled "The China International Conference on Digital City Construction", sponsored by the Ministry of Construction, the Ministry of Science and Technology, the Chinese Academy of Sciences, the China News Agency and the Guangzhou Municipal Government, was held this month in Guangzhou.

Forums at the conference included e-commerce, the Internet, entrepreneurship, science and national macro-policy. The event aimed to promote communication between the government and Internet-related industries by exploring ways to develop digital cities across the country.

It is hoped that the process of urban digitalization will curb illegal development, corruption and other weaknesses in the present system of project bidding and construction. Also, using digitalized information technology, local officials are expected to make more standardized decisions concerning urban planning, construction and administration.

Already, major centers have designed digital centers serving citizens' and government's needs. In Beijing, the use of a "digital Beijing" is a major marketing tool in developing Zhongguancun (the self-styled "Silicon Valley" of China), while Shanghai is considering an "information port". Li Shusen, mayor of Guangzhou, the capital of south China's Guangdong province, plans to design a digital base with movies, text and images that will provide over half of the public services by 2006.

The digital divide was also a topic at the conference. Jiang Mianheng of the Chinese Academy of Sciences pointed out that Beijing, Shanghai and Guangzhou are responsible for 60 percent of the domain names in China. He added that because of different economic and technological levels, developed countries with only 16 percent of the world's population are home to over 90 percent of the host computer network.

In order to narrow the digital divide, Jiang promoted the idea of already digitalized cities providing technical support and resources to less developed cities and regions.

Accompanying the conference was the China International Exposition on Digital City Construction. Over 70 Information Technology companies and research institutes exhibited the latest technologies and digital city construction developments.

(Source: Asia Pulse)

Router Technology Seen as Breakthrough for the Internet in China

"863," the core router project of the "Chinese high-speed information demonstration network," recently underwent testing by the Ministry of Science and Technology in Beijing.

Routers, likened to the hearts of the Internet, pump flows of information to surfers. China's netizens will be able to use a high-performance core router with Chinese intellectual property freely moving through the Net at speeds hundreds or thousands of times faster than existing technology.

Professor Wu Jiangxing, director of the research and development project's headquarters, proudly noted that "China's major breakthrough in core router technology is no less important than the period in the mid-90s when China achieved success in digital program controlled-switch technology."

Experts claim that core routers independently developed will enable China to bid farewell to the practice of importing routers and enable the country to set up its own industry, saving capital and creating huge economic benefits. Meanwhile, the technology will also make it possible for China to set up a new generation Internet, effectively ensuring information security, important to national defense. Furthermore, these recent breakthroughs will enable China to further close the technology gap with developed countries.

It is claimed by industry experts that core routers will allow China to independently establish online video, distance education and distance medicine, services that are currently greatly hindered by low transfer speeds and low transfer capabilities.

A broadband high-speed infrastructure, with core routers as a basic component, is needed to solve these problems.

The national "863" plan was a result of the increasing digital gap. In 1999, the State Ministry of Science and Technology decided to concentrate resources and skilled-labor in the "863" plan. Its focus was the information sector and computer-related topics, such as telecommunications and opto-electronics. The "national China high-speed information demonstration network" was set up to overcome difficulties with developing key technologies concerning the new generation Internet.

(Source: Xinhua News Agency)

Competition in China's Free Email Market Heats Up

The recent decision by some email service providers to charge for traditionally free online services has left some Chinese email users grumbling.

NASDAQ-listed Sina.com announced on August 16 that it would reduce its email carrying capacity from 50 MB to 5 MB, and begin to charge new mailbox subscribers.

The day after Sina's announcement, its major competitor, Sohu.com, asserted itself by launching a faster and more stable free mail service, dubbed "Lightning Mail" to its users. Yahoo got involved in the confrontation by moving its Chinese free mail server from the United States to Beijing at the end of August, aiming to optimize the service.

There are some 21 million regular email users in China. Sina has the major share, roughly 10 million, according to figures from the China Internet Network Information Center (CNNIC).

Sina was the first among Internet portals in China to provide free mailbox service in 1999. Its 50 MB email carrying capacity wowed China's fledgling network industry. But just two years later, it has reversed its lead by cutting the free mail service and asking for fees.

Wang Yan, president of Sina.com, explained that the era of providing free services to attract users with the purpose of making money from ads and investment capital is gone.

In order to maintain such a large mail system for 10 million users, the company has spent more than RMB 100 million (US $12.5 million) every other year, said Wang.

Not only can Sina not afford the cost. Many dot.coms in China are struggling.

Internet portals have resorted to generating revenue from their email services. Well-known dot.coms, including 21CN, 163 and 263 have all announced they will charge for email service.

However, this has provoked a hostile response from users. They claim that dot.coms are " removing the plank after crossing the bridge."

Many have vowed to abandon Sina's mail service. A user surnamed Yang, a Chengdu resident, has considered filing suit against Sina for unilaterally violating the free email service "agreement".

At this critical point, the third leading website, Sohu.com, won the confidence of surfers by offering its Lighting Mail. Daily registration for the service was twice as high as for the old mail system.

Zhou Yunfan, executive vice president of Sohu, told the press that there's no need for a dot.com company to charge for every product.

According to Wang Jing, a publicity official of the company, Sohu profited mainly from ads, providing Internet technology and e- commerce.

For paying web users, the service quality of the charged mailboxes is their prime concern.

Though Sina guaranteed high quality, speed and security to customers, Yang Ning, chief technology officer of Sohu, raised the doubt that complicated legal matters concerning mail service contracts could be solved due to technical limitations.

For example, Yang said, is it the sending or receiving server that is responsible in case of a failed mail delivery?

Meanwhile, Yahoo moved in to become the first international website to locate a mail server in China by moving its Chinese free mail server from the United States to Beijing.

Zhang Xing, a publicity official at Yahoo, claimed that the move is aimed to optimize their free mail service by making it steadier and much faster. It reflects Yahoo's long-term strategy for gaining a big chunk of China's e-market.

Sohu and Yahoo have decided now is not the time to charge for email use -- a choice that came after conducting market surveys, according to Yahoo senior executives.

Analysts here said it's still too early to say which of the rival teams will see the most profit, or whether the dispute will reposition the top dot.com runners in China.

(Source: Xinhua News Agency)


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Results of the First Survey of the Internet in China

The first Internet resources survey performed by a State agency reported that by the end of April, China had 238,249 websites or approximately 3.5 percent of all the websites in the world.

The survey, sponsored by the State Council's Information Application Promotion Office and completed by the CNNIC, the Ministry of Information Industry Research Center (CCID) and Nanjing University.

CNNIC also conducts an Internet survey based on users, which showed that there are over 242,739 websites in China.

Mr. Hong, an official with the Ministry of Information, said that the data from the State Council's survey was not extensive enough due to this being the first survey of its kind. It did not provide information concerning online traffic or the quality of online data. However, he added that this survey will be repeated on a regular basis and the survey techniques will be more refined.

The survey proved that ".com" and ".com.cn" websites made up more than 80% of the websites in the mainland. It also showed that 11 percent of the online databases in China are pay services.

The survey provided interesting results, such as that one third of the websites were maintained by only one or two people and that only 5 percent of the content on 60 percent of the mainland based websites was refreshed weekly.

The China Daily pointed out that only four years ago, China had 1,500 websites. The survey also showed that China had over 690,000 domain names registered and set up almost 46,000 databases.

It was also discovered that the majority of databases were found on the prosperous east coast.

(Source: South China Morning Post)

China Digital Library Corp to Set up Digital Content Service Platform

The China Digital Library Corp Ltd. has announced an ambitious plan to develop a digital content service platform in a bid to solve the copyright issues concerning on-line resources.

The corporation has signed an agreement with Enpia System, a leading Korean DOI (Digital Object Identifier) provider to build such a service platform. An official with D-Library said the Internet boom has offered quick access to digitized content but the copyright issues have been thorny for both providers and users.

As the most complete marketing and service system pertinent to digital libraries across China, the D-Library will adopt Enpia System's technology to identify audio-visual contexts, photos and essays in their virtual library.

Relying on the abundant resources of the National Library, the D-Library will specialize in digital content production, solutions for digital technologies and construction of digital repositories. It will also provide professional and systematic multi-media information content services by using core digital library technologies and advanced operating concepts.

(Source: BBC World Monitoring)

Online Auction of NPAs a Success

The first time an online auction was used by a Chinese asset management firm to sell Non-Performing Assets (NPAs) has proved successful. Approximately RMB 21 million (US $2.53 million) was sold using the website of China's largest auctioneer, the China Guardian Auction Company.

Via the online auction, the Jinqiao Hotel in Tianjin was purchased by a local investment company. It has been idle for years since the China Huarong Asset Management Co. (Huarong) took it over from China's largest Commercial Bank, the Industrial and Commercial Bank of China (ICBC).

Experts say this new method of selling NPAs could experience great growth in the future as the company prepares to sell a large pool of bad assets collected from ICBC.

Meng Shengqin, a senior official with China Huarong, said "Online treatment could help us maximize the value of non-performing assets, which are the core of our business."

She said the online auctions could make their assets available to a larger number of companies, both domestic and foreign, putting the assets in a better position to recoup their value.

Lu Ang, chief executive officer with Guardian Online, said that there will be more online sales of NPAs in the coming months.

(Source: China Daily)

 


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