Currently 95 percent of China's IT service suppliers are losing money and almost all of them are eager to grab a share out of the expectable over hundred million yuan budget for e-government across the country, analysts said.

A Rising Market

Now the Chinese government is bending on three measures for online administration, according to Yang Xueshan, an information official with the State Council.

The first is to construct two unified platforms: the internal network to handle government affairs at all levels and the external web to handle businesses in connection with enterprises, public services and affairs between governments.

The second is to promote 12 key services involving customs, taxation, finance, public security, social security, and agriculture and water resources. The third is to accelerate establishment of important databank such as on population and agricultural information.

The flourishing of e-business put transaction costs under control and expanded the huge market of online consumption, while the following e-government will not only increase government efficiency and transparency but also help control prices and prevent embezzlement and deals behind the scenes, said Yang. Through information technology governments will be able to handle affairs coordinately and share resources, and promote open, high-efficiency administration in accordance with law as well as speed up informationization of the society as a whole.

As reported, the US finished its e-government plan in 2001, demanding federal departments to entirely realize online administration in 2003 at the latest. In Britain 60 percent government departments have opened or are constructing their websites. Japan planned to deal with various government businesses by the year 2003 and Singapore could provide over 200 items of services by last July whereas Hong Kong aimed at offering online choice for 90 percent public service items suitable for being logged on the Internet.

The core business pattern of e-business was transformed into online government purchasing. Departments involving trade, finance, public health, medicine supervision and logistics all promoted online purchasing in the year 2001, and large state-owned enterprises on steel and automobile, as well as medical system of certain provinces and cities as Shandong, Guangzhou, Hunan and Shanghai are all on the track of online purchasing.

Fierce Competition

The fund for e-administration construction will be mainly covered by governments both at central and provincial levels and enterprises are not shun out. The investment by central government alone is reportedly standing at least over 1 billion-yuan (US$121 millioin), the figure being unimaginably huge if extended to provinces, cities, or even communities.

On the market of government purchasing, fierce competition is staged among excellent software producers from both home and abroad. When the Beijing Municipal Government purchased copyright software through public bidding, including operation system and those for office use and anti-virus, almost all bid-winners were domestic companies. Some competitive domestic software producers have come to know the good of the e-government and they will stick to it more closely along with the deepening of the construction.

Whether a developing country could make good use of the technological gap with developed countries to speed up its economy depends on its correct strategy, as experts pointed out. On the China e-government technology and application seminar scheduled on December 10, experts from government, academic and business circles will gather in Beijing to discuss strategy on the nation's e-government construction and development and seek as well for new business opportunities.

(People's Daily September 24, 2002)