Beijing, April 26, 2006 — Information
and communication technologies (ICT) are vital to managing China’s unprecedented
growth challenges, according to a new World Bank study titled China’s
Information Revolution: Managing the Economic and Social Transformation.
This report, the first to comprehensively map out China’s current ICT
landscape, provides a forward-looking assessment of the state of the country’s
China has the world’s largest telecommunications
market and its IT industry has been an engine of the country’s economic
growth—growing two to three times faster than GDP over the past 10 years.
However, as China’s development has entered a new stage, it requires an
updated “informatization” strategy to reflect the current economic and
social challenges as well as opportunities. If China is to reap the full
benefits of ICT, the report says, it needs to deal decisively with several
“China is serious about putting in
place a good foundation for equitable and sustainable economic growth”
said Jim Adams, World Bank Vice President for the East Asia and Pacific
region. “This report reinforces how important to that effort is a well
thought-out ICT strategy that brings the benefits of the online world closer
to everyone’s daily lives.”
The report says that legal and regulatory
reforms are urgently needed in areas such as telecommunications, open access
to government information, data protection and privacy. A stark urban-rural
divide in access to telecommunications infrastructure puts internet penetration
40 times higher in urban areas compared to rural.
The report also says the domestic ICT
industry needs more innovation so that it moves up the value chain and
beyond production of low-end products and applications. Currently, software
exports account for just 1-2 percent of China’s total IT industry exports
– reflecting China’s comparative strength in IT manufacturing and weakness
in software development. Furthermore, only 16 percent of teachers in China
have ICT training, resulting in a major shortage of skilled ICT workers.
‘Brain drain’ further exacerbates this situation.
According to the report, China also
stands to benefit from expanding into e-government as online applications
could make government functions more service-oriented, efficient and transparent.
Rural areas in particular can benefit from online information services.
Fostering e-business can boost productivity, increase technological innovation
and enhance international competitiveness of Chinese enterprises. A 2004
Ministry of Commerce survey of 838 firms found that 58 percent of those
that had participated in e-commerce increased their number of supplier
contacts, while 70 percent increased their number of client contacts.
“Given the cross-cutting nature of
ICT, government decisions about ICT can also be seen as decisions on the
course of the economy as a whole” said Mohsen Khalil, Director of the
World Bank Group’s Global ICT Department. “The issues affecting China’s
ICT policies and strategies are similar to those faced in other sectors.
The rapid pace of technology development just means that ICT issues are
being addressed before other problems, and that the effects of ICT development
will be felt throughout the entire economy.”
For more information on the report,
To learn more about the World Bank in
China, visit www.worldbank.org/china.
For more information on the World Bank’s
Global ICT Department, visit www.worldbank.org/ict.