Seize Opportunity and Steer Right Direction to Actively and Practically Promote the Development of E-Commerce in China

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1 Seize Opportunity and Steer Right Direction to Actively and Practically Promote the Development of E-Commerce in China Song Lin, Director of Informatization Promotion Department of Information Industry Ministry, P. R. China On May the 8th this year, President Jiang Zemin pointed out in the opening speech of the Fortune Global Forum 2001 in Hong Kong that It will work hard on e-commerce, accelerate the process of informatization, and support enterprises in applying modern information network technology and international co-operation and exchanges.. Chinese government has always paid much attention to the development of e-commerce. Recently, the Tenth Five-Year Program of National Economy and Social Development Of People s Republic of China passed on the Fourth Session of the Ninth National People s Congress has pointed out explicitly that we should speed up building the electronic certification system, modern payment system and credit system to develop e-commerce. we should promote the revolution of ways of marketing, transportation and service providing. In order to achieve this, in the following 5 years, Chinese government will further promote the development of e-commerce and create a good development environment in the field of technology, network, commerce and legal rule. The policies, laws and regulations concerning taxation, tariff, e-payment, electronic-signature, identification authentication, network intellectual property rights etc, will be stipulated, which are suitable to the development of e-commerce. We should create a modern logistic system covering the whole nation and a consummate financial supervising system, while speeding up security certificate authentication (CA) system, 1

2 especially the CA system of enterprises and customers and popularizing the application of e-commerce in the fields of finance, foreign trade, taxation, custom, railway, communications, iron and steel, oil and chemistry, automobile, construction material industries and other suitable areas. At the same time, the informatization of enterprises, especially large enterprises is encouraged while actively participating in the multi-lateral and bilateral negotiations concerning e-commerce legislature, standardization and the formulation of other rules. All the above-mentioned work needs to be done by the government which will coordinate related departments according to the development of the market. E-commerce is a brand-new way of conducting commercial activities relying on network and digital environment, which involves almost every trade. From the 1990s, economic globalization and information network wave has become the mega trend of world economic development. E-commerce, as the product of the economic globalization and information network wave have become the most active growth point in global economy and has promoted the development and prosperity of the world economy. In the future it will represent the development direction of future trading forms, the popularization of which will bring enormous benefit and immense reform to social economy. Since last year, with slowdown trend of the growth rate of world economy, the Nasdaq index had fallen sharply. Popular in the new economy, the dot-com stocks have come into the stage of adjustment. More and more jumped-up enterprises have shifted from focusing on the former so-called eyeball economy to physical economy which has better prospect and begin to develop industrial network such as e-commerce; at the same time, many traditional enterprises have announced their 2

3 participation in e-commerce, which has added new vigor and dynamism to the development of e-commerce. The development of e-commerce in China has also entered into a new stage under the impact of world trend. With China s emerging accession to WTO, more and more enterprises have noticed the great changes that will be brought to the trade and industry and the raising of competitiveness of enterprises by developing e-commerce after the accession. Therefore they have increased the investment of intelligence, technology and finance to explore a brand-new way of management and marketing. The basic information network construction of our country has achieved a lot during the Ninth Five-Year Plan, which has laid foundation for the development of e-commerce. By the end of 2000, the popularization rate of telephone in China had reached 20.1%, and the number of telephone subscribers had exceeded 230 million, among them 85 million mobile phone users, while the Internet registered 25.5 subscribers. After several years of experiment, research and development, we have acquired precious experience in developing e-commerce information exchange platform that has independent intellectual property rights while having successfully developed and put to use the comprehensive open exchange platform of e-commerce based on XML information exchange standard. The business modes of e-commerce enterprises have been diversified, with e-commerce developing form the traditional mode of B to B that is based on EDI to data exchanging modes of B to B, and B to C through the Internet. According to a survey conducted by our information promotion department, by the end of 2000, there were 620 ISPs, 677 websites of B to C, 370 B to B websites in China. The trade volume of B to C e-commerce is about 390 million yuan, that of the B to B is 3

4 about million yuan. With regard to the international cooperation, we have exchanged with many countries concerning information technology, while many types of international commercial forum and seminars were organized. We have discussed the issue of promotion of e-commerce with the International Telecommunication Union, APEC, ASEAN and other regional and international organizations. We advocate the corporative principles of openness, creation, equality, reciprocation, competition and coordination to contribute to the development of e-commerce. Though China s e-commerce has developed very fast in recent years, we must see that the general level of e-commerce in China is still in the preliminary stage. Compared with developed countries, we still lag behind in the fields of the infrastructure of informatization, operation and informatization degree of enterprises, logistic system, financial supporting system, socialization credit system and consciousness, which still need to develop quickly and make improvements. There are several aspects concerning e-commerce that can be summarized as the following: 1. The Standardization and Construction of E-Commerce Platform The platform of e-commerce is a problem that enterprises are very concerned about. The e-commerce platform refers to not only a basic platform of network infrastructure, but also the information exchanging platform of e-commerce, while it is not only a public platform but also an e-commerce platform with the characteristics of different enterprises and trades. But in order to share all the resources through interoperability, we must 4

5 conform to a certain standard and norms In the respect of basic network standard, TCP/IP protocol is generally accepted. What will be the information exchange standard of e-commerce platform on the basis of this protocol, the consensus is reached on the following points: it must conform to international standard, and being suitable to China s national conditions, while the future development of market economy and business should be open. These are basic starting points when the standards or norms are stipulated. Another very important problem is that the standardization of e-commerce platform must be beneficial to the industrialization of e-commerce and to the users of e-commerce. While it should be suitable to various environments to enable traditional enterprises to adopt e-commerce conveniently and efficiently so that they can increase the benefits of the enterprises, to help ordinary citizens to make use of e-commerce in a simple way to raise their living quality. It should also help e-commerce walk down from its altar, let e-commerce transactions as convenient as telephones and electric light, while bringing e-commerce into its economic results. 2. The Security Problem of E-Commerce E-commerce is realized in networks, especially in public computer network environment. Due to the openness of network, it also emerges the problem of security, which concerns the interests of both enterprises and customers, and more importantly, the economic security of the nation. Since it is related to the security technology and products and state policies and laws, how to construct China s e-commerce security system needs to be further discussed and researched. 3. The Logistic Distribution of E-Commerce 5

6 E-commerce usually has three flows to deal with: information, capital and material flows. Since capital and information are basically online flowing information, which has nothing to do with real entity, it is easy to realize it if we take effective measures compared with material matter. Viewing from the present situation of e-commerce in China, the development of logistic distribution system is comparatively slow. Some enterprises that deal with logistic distribution cannot adapt to the logistic distribution need of e-commerce in the real sense. China Post Office, an enterprise of the largest logistic distribution of our country, enjoys its big advantage. It has the foundation and strength for food delivery of e-commerce and has done a lot of logistic distribution. In the developed coastal areas such as Guangdong, it has acquired a preliminary scale. But, being faced with the competition of logistic distribution, enterprises at home and abroad should make more efforts on how to occupy the market. 4. The Macro-Environment of E-Commerce The development of e-business or e-commerce must rely on the support and guidance of government, the protection of unified norms, laws and regulations. At present, the macro-guidance of government, policy support and perfection of corresponding regulations are needed in developing e-commerce in China. This is mentioned in their speech by many representatives. The enterprises that are engaged in the development of technology related e-commerce and production related e-commerce hope that the authorities concerned can give a flexible policy environment and necessary support in policy and capital, which will be beneficial to the development of this industry while developing the technology and products with our own intellectual property rights. This is of great significance from the 6

7 perspective of propping up the development of national information industry and industrialization of e-commerce. At present, we must push forward the e-commerce in a vigorous and pragmatic way. 1. seize the opportunity and steer our efforts in the right direction With the rapid development of the global informatization, the e-commerce revolution that is brought forth by the development of the information technology has made profound impact on the global trading form, market structure, as well as on the styles of economic and social life. It also accelerated the transformation from industrial society to information society. The development of e-commerce does bring forth us profound influence, great economic benefits and convenience, which has been proved by the fact of the development of e-commerce in China and abroad. The development of e-commerce is an inevitable consequence of the development of information technology and network technology, and the indispensable requirement of the development of the economy and society; therefore, we should be fully confident about it. What is most important now is that we should seize the opportunity, steer our efforts in the right direction to push forward the development of e-commerce in a vigorous and pragmatic way. 2. The e-commerce should be oriented towards industrialization The enormous potential of global e-commerce evolution and the global competition brought forth by it made us have to make an important choice. According to the current situation of the development of e-commerce in China, we must emphasize the connection, and resources sharing of in the construction of 7

8 e-commerce platform. We should take application as the leading consideration, use application to promote development, use e-commerce to reconstruct and upgrade traditional enterprises so as to realize the industrialization of e-commerce. We should design the integrated strategy and implement measures in China through establishing a framework of e-commerce development tallying the China real conditions. We should establish the technological standards and norms of information exchange that are in line with international criteria. We should do research and develop technology and products related e-commerce independently. We should establish and perfect relevant laws and regulations to provide a good industrial environment for the leaping development of e-commerce in China while pushing forward the development of e-commerce in China comprehensively, vigorously and quickly. 3. Establish the e-commerce infrastructure and comprehensive service platform The industrialization of e-commerce in China is an irresistible trend. To adapt to the need of the development of e-commerce industrialization, we must have a comprehensive and systematic layout of the e-commerce system and establish e-commerce infrastructure such as security system, payment system, credit system and modern logistic distribution for e-commerce. We need to learn the advanced technology abroad and combine it with our own technological achievements available to establish the e-commerce comprehensive service platform with our own intellectual property rights. Great attention must be given to the promotion of industrialization of comprehensive e-commerce service platform with our own intellectual property to promote the development of our country s e-commerce. 4. Quicken the pace of establishing standards for e-commerce 8

9 The standards for e-commerce are relevant to the development of e-commerce industry and the security of e-commerce and even to the economic security of our country, which is the key to the industrialization of e-commerce in our country. In the process of the development of e-commerce in our country, we must establish a set of e-commerce standards and norms not only in tally with China s actual conditions, but also with the international standards. We should coordinate and standardize the practice of developing various kinds of e-commerce application system under the guidance of uniform planning and standards. 5. Establish new operation mode of e-commerce On the basis of uniform e-commerce comprehensive service platform, we should explore vigorous new operation mode of e-commerce with Chinese characteristics, and realize integrated access, application and management of e-commerce. In this way, we can boil the complex e-commerce down to the simple platform operation so as to create a new operation and service system, while realizing the opening and cooperation among the chains of e-commerce such as e-commerce operation, security certification and payment, logistic distribution, application development, and information service, and make a win-win e-commerce mode. The process of economic globalization and the informatization is quickening now. The development of China s economy is an important part of development of the global economy. The development of world economy is inseparable from China while the development of China can t be separated from world too. Informatization and e-commerce are the core of the development of global economy in the 21st century. We should 9

10 seize the opportunity to establish norms of the e-commerce tallying with the current situation of our country, while promoting the research and application of e-commerce technology, product and comprehensive service platform with our own intellectual property right and realizing industrialization of e-commerce. We should actively explore the e-commerce operational mode being based upon China s current situation and exert the function of e-commerce. We should use informatization to promote industrialization so that we can make contribution to the economic and social development of our country and promote the peace and development of human beings. 10