By Zhao Zhiguo

Deputy Director of the Communication Security Bureau of the Ministry of Industry and Information Technology

Ladies and Gentlemen:

I would like first to thank the Internet Society of China and Microsoft for your work in bringing together representatives of the Internet industry from China and the US. I am honored to have this opportunity to offer a brief introduction to the development and administration of the Internet in China.

Firstly, I'd like to demonstrate the reality of development through the use of two examples. The first relates to Chinese farmers accessing the net. There is now a website designed exclusively for farmers - www.nongmin.com.cn. We can find a vast amount of information relevant to agriculture, rural areas and farming, such as information about seeds, fertilizers and agriculture apparatus, real-time prices, the demand for agricultural produce, and job vacancies. Moreover, the Website has become the communication platform between farmers and local governments.

The second is about e-commerce development. I talked about this at the Sino-British round-table conference in March. Last week I conducted another survey among my colleagues. What surprised me was that compared to the previous result, almost everyone surveyed now shops on the Internet, and many people even regard it as a form of leisure. The biggest C2C website in China – Taobao.com, whose name literally means search treasures on the net, reflects the Chinese public's fondness for e-commerce. We have Ma Yun, CEO of Alibaba and Taobao.com here with us today. I think he may share my view.

These two examples are only a small part of the rapidly-developing Internet industry in China.

The Chinese government has attached great significance to Internet development and regards it as an important measure to achieve economic and social informatization. The government has followed a principle of vigorous development and scientific administration.

In the past 14 years China's Internet industry has made considerable progress, with improvements in communication infrastructure and the regular emergence of new information technology. In addition to expanding urban net usage, the Internet has also spread into the vast rural areas.

As the administration department of the telecom industry, from 2004 we assigned six leading telecom enterprises, including China Telecom, with the task of launching a nationwide program to connect every village to the telephone network. The total investment involved exceeds 30 billion yuan (US$4.4 billion). A total of 75,000 administrative villages and 20,000 natural villages are now connected. All the administrative villages in 29 provinces are connected to the network and the penetration rate has reached 99.5 percent. The rate of broadband connection at the township level is now 92 percent.

With this communication capacity at our disposal, we have established over 2,000 information platforms and 6,000 websites serving the agriculture sector. Last year, the number of farming Internet users reached 52.62 million, increasing by 127.7 percent compared with the previous year, with the growth rate far exceeding that of urban users, which was 38 percent. New rural netizens accounted for 25 percent of the total number of new netizens nationwide.

We will further facilitate information network and technology development by standardizing the network, investing in resources, and improving facility efficiency, by focusing on a new generation of mobile communication, broadband connection, optical communication and rural communication, and by promoting the third generation of mobile communication and Internet applications. In addition, we will continue the "telephone program" mentioned above, increasing Internet connection at the township level, striving to reduce the "digital divide", and providing convenient services to farmers, thereby realizing the goal that "every village has the telephone, and every township is connected to the Internet" by 2010.

In the past 14 years, the Internet has spread into each and every facet of China's economy and society. The Internet has brought more and more information to traditional industries such as energy, metallurgy, engineering, and chemicals. It has had an even more obvious influence on the financial, commercial and media sectors.

In 2007, Shanghai Baosteel sold nearly 20 million tons of steel through its electronic trade platform and achieved accurate and zero-stock logistics.