DATE=4/26/2000
TYPE=BACKGROUND REPORT
TITLE=CHINA INTERNET - FRENZY
NUMBER=5-46200
BYLINE=STEPHANIE MANN
DATELINE=WASHINGTON
INTERNET=YES
CONTENT=
VOICED AT:


INTRO:  It remains to be seen if the recent steep drop 
in high tech stock prices will dampen Americans' 
enthusiasm for investing in Internet companies.  Yet, 
enthusiasm for the new Internet economy is still high 
in Asia.  In China, the on-line economy has taken off 
(grown dramatically) in the last six months.  (In this 
first of four reports) Correspondent Stephanie Mann, 
just back from a month in Beijing, says Chinese people 
are turning to the Internet for -- just about 
everything. 

TEXT:  Every day in China it seems there is some new 
Internet-related development.  History fans can visit 
the Confucius website and learn about the Chinese 
philosopher who lived 25-hundred years ago.  A new on-
line consumer complaint site allows people to register 
their problems with shoddy products or poor service.  
Chinese investors can buy and sell stocks on-line. 
Rock collectors can view photos of stones shaped like 
animals or birds at a website devoted to strange-
shaped rocks.  

The head of an on-line bookstore, Peggy Yu, says 
Internet fever has hit China.

            /// YU ACT ONE /// 

      It is a frenzy.  And I think it's natural, 
      because the Internet is really changing people's 
      lives in a very fundamental way.  It's changing 
      the way people interact with each other - how 
      they get information, and how they stay 
      communicated, and how they make certain 
      decisions.

            /// END ACT ///

Ms. Yu is co-president of Science and Culture Book 
Infotech Company in Beijing.  Its website, Dangdang-
dot-com, began selling Chinese language books on-line 
last November.  She says just about everybody in China 
is starting or thinking about starting a dot-com 
company. 

            /// YU ACT TWO ///

      In the information age, or knowledge age, 
      information and knowledge are very important.  
      And the Internet is such a strong tool for 
      entrepreneurs and for management to get new 
      business ideas, new product ideas and to compete 
      on a knowledge basis with others.

            /// END ACT ///

Ms. Yu sees the greatest potential for growth in 
Internet use in China in the areas of education and e-
commerce.  She says the Internet can be a powerful 
tool to present the best teachers to China's millions 
of students.  And she adds, despite its large size, 
China does not have many national chain stores, so the 
Internet can help retailers reach more customers. 

Ms. Yu and other business executives say China's 
Internet-related market began to blossom in the second 
half of last year, and they are optimistic about its 
prospects. 

Tom Lasater is chief executive officer of Vertical 
Asia, a Hong Kong-based company that sets up what are 
called vertical portals -- Internet sites that can be 
either a destination or jumping off point for people 
searching for very specific information or products on 
the Internet.  

Mr. Lasater started his company in March of last year, 
and he says many people doubted it would work in 
China.  But that changed, he says, in July when a 
collection of Chinese internet-related companies, 
called China-dot-com, was listed on the New York stock 
market and became an instant success. 

            /// LASATER ACT ONE ///

      Over the next months, you had investment bankers 
      in Hong Kong quitting their jobs to start 
      portals.  Everyone just started jumping in the 
      game.  So, there's definitely a frenzy, so to 
      speak.

            /// END ACT ///

Anne Stevenson-Yang, president of Twin Poplars, a 
publishing and consulting firm in China, keeps track 
of Chinese telecommunications issues.  She says the 
government in Beijing apparently considers the 
Internet a tool to boost the economy and is strongly 
promoting it.  Ms. Stevenson-Yang says the Internet's 
influence on the Chinese economy over the last six 
months has been obvious.  

            /// STEVENSON-YANG ACT ONE /// 

      The economy was down.  Everybody's businesses 
      were kind of lagging a little bit.  There was 
      excess real estate space.  Everybody was . not 
      too optimistic about the future.  And then 
      suddenly comes dot-com.  And real estate is, you 
      know, everybody is 90-percent full.  You can't 
      get a phone line for your life.  Salaries are 
      doubling by the minute.

            /// END ACT ///

Ms. Stevenson-Yang says there is hope the Internet 
will allow China not only to catch up with the world 
economy, but perhaps to leapfrog (jump) to the 
forefront of the new high-tech economy.  She explains 
that many Western countries are using technology that 
is four to five years old and already outdated.  But 
China, she says, is bypassing some of that technology 
and going straight to the newest types of systems.  

/// OPT /// For example, Ms. Stevenson-Yang says some 
areas of China are installing broad band 
telecommunication systems, which can accommodate a 
large number of connections to send and receive data 
all at the same time - unlike traditional telephone 
lines which allow only one form of transmission at a 
time. /// END OPT /// 

At the end of 1999, the Chinese government estimated 
there were eight-point-nine million Internet users in 
China.  Tom Lasater says that number has risen in just 
a few months to about 10 million, and he predicts that 
by the end of the year China may have as many as 50 
million personal computers, or P-C's, connected to the 
Internet. 

And Anne Stevenson-Yang says the Internet will be 
accessible to even more Chinese people through other 
forms of technology, like cable television, or new 
wireless applications, including mobile telephones. 

/// BEGIN OPT /// 

            /// STEVENSON-YANG ACT TWO ///

      You can't expect average Chinese households to 
      get P-C's.  Even manipulating the keyboard is 
      difficult for Chinese.  And there's no 
      particular immediate use for a P-C in the 
      average Chinese household.  But through the 
      cable (T-V) system, sophisticated well-financed 
      municipalities, like Shanghai and Shenzhen, are 
      already upgrading to two-way cable, so that will 
      provide access quickly.

            /// END ACT ///

Ms. Stevenson-Yang says about 80 million Chinese 
already have cable television. 

She and Tom Lasater agree that new wireless computer 
applications, called WAP, can be easily adapted in 
China where many more people have mobile phones than 
have personal computers. 

            /// LASATER ACT TWO /// 

      The ratio of computers to mobile phones in the 
      U-S is like 10 computers to one mobile phone.  
      In China, it's 10 mobile phones to one computer.  
      So, with WAP, it opens up a whole new avenue for 
      the Internet in China.

            /// END ACT /// 

/// END OPT /// 

But Ms. Stevenson-Yang says new technology alone will 
not be enough to sustain China's Internet frenzy.  In 
addition to infrastructure, she says Chinese companies 
must pay attention to the content of what they offer 
on the Internet.  A high quality and wide variety of 
content will keep attracting on-line consumers and 
information seekers and will determine the success of 
internet-related business.  (Signed)

NEB/SMN/KL



26-Apr-2000 14:09 PM EDT (26-Apr-2000 1809 UTC)
NNNN

Source: Voice of America
.