Busi­ness will boom in open cy­berspace

China Daily (Canada) - - LIFE -

China holds a piv­otal role in the In­ter­net. It had more than 650 mil­lion In­ter­net users by the end of last year and it is the largest and fastest grow­ing in­for­ma­tion and com­mu­ni­ca­tions tech­nol­ogy con­sumer mar­ket in the world. The Chi­nese ICT sec­tor is cur­rently val­ued at €433 bil­lion ($474 bil­lion) and it is grow­ing at an an­nual av­er­age rate of 7 per­cent, the fastest in the world. The coun­try has made tremen­dous progress in In­ter­net de­vel­op­ment in the past decade hav­ing be­come the most ac­tive e-commerce mar­ket in the world.

How­ever, ifwe look at the dis­tri­bu­tion of the world’s ICT sec­tor, China does not rank first. It ranks third. In 2012 China ac­counted for 13 per­cent of the world’s ICT mar­ket, be­hind theUnited States (32 per­cent) and the Euro­pean Union (23 per­cent). In the same year, the value of the EU’s ICT sec­tor ex­ceeded €516 bil­lion.

Th­ese fig­ures show the tremen­dous growth op­por­tu­ni­ties of China’s ICT in­dus­try. Ob­vi­ously, the strat­egy should not be just to copy lead­ing brands or seek to pro­duce “Chi­nese” prod­ucts. The ICT in­dus­try is not the car in­dus­try. It doesn’t just pro­duce a se­ries of fi­nal prod­ucts; it pro­duces in­ter­con­nected sys­tems too. In the ICT in­dus­try, we can­not in­no­vate in iso­la­tion. Each sin­gle new­prod­uct or sys­tem needs to be com­pat­i­ble— to in­ter­op­er­ate— with those of up­stream ser­vice providers and of the ap­pli­ca­tions that users want.

Even more than in other glob­al­ized in­dus­tries, the key­word in ICT is spe­cial­iza­tion. In other words, China should not pro­mote in­vest­ments in ar­eas where other coun­tries or economies are strong, but seek co­op­er­a­tion in­stead. In this re­gard, an anal­y­sis of the ICT sta­tis­tics of China and the EU show how com­ple­men­tary China’s and Europe’s ICT sec­tors are.

China is very strong in man­u­fac­tur­ing— more than 50 per­cent of the ICT sec­tor com­prises the man­u­fac­tur­ing of tele­com equip­ment, con­sumer elec­tron­ics and elec­tronic com­po­nents. The EUin­stead dom­i­nates in high-end in­no­va­tive ser­vices and IT ap­pli­ca­tions, which to­gether ac­count for more than 55 per­cent of re­gional ICT sec­tor.

The EUis a ma­jor tech­nol­ogy hub and it can pro­vide a key con­tri­bu­tion for the growth of newICT mar­kets in China if ad­e­quate co­op­er­a­tion agree­ments are timely dis­cussed and con­cluded, for ex­am­ple, in niche mar­kets like the In­ter­net of Things, smart cities, big data, e-health, cloud ser­vices, which will drive growth in the ICT in­dus­try in the next decade.

But op­por­tu­ni­ties for co­op­er­a­tion also ex­ist in the “tra­di­tional” tele­com seg­ment. China and the EU are home to the world’s ma­jor tele­com ven­dors. Syn­er­gies in 5G de­vel­op­ment are clear, es­pe­cially fol­low­ing the sign­ing of the EU-China Agree­ment on 5G in Septem­ber in Beijing.

The EU-China po­lit­i­cal and eco­nomic re­la­tion­ship is very de­vel­oped, though there are some chal­lenges, which we need to over­come to im­prove co­op­er­a­tion in the dig­i­tal field, such as the lack of mu­tual un­der­stand­ing of the re­cip­ro­cal mar­kets, di­ver­gences in the ap­proach to cy­ber se­cu­rity and, re­lated to it, a lack of global In­ter­net con­fi­dence. More­over there are sub­stan­tial reg­u­la­tory di­ver­gences be­tween the Chi­nese and EU rules, for ex­am­ple, on con­sumer pro­tec­tion and data pro­tec­tion.

The EUhas just started its am­bi­tious Dig­i­tal Sin­gleMar­ket strat­egy, which should in the com­ing years re­duce bar­ri­ers to do­ing busi­ness across the EU’s in­ter­nal bor­ders, pro­vide EU com­pa­nies scale and re­sources to grow and make the EU an even more at­trac­tive lo­ca­tion for global com­pa­nies.

The EU’s Dig­i­tal Sin­gleMar­ket strat­egy will of­fer sub­stan­tial in­vest­ment op­por­tu­ni­ties to Chi­nese ICT com­pa­nies.

How­ever, in the global In­ter­net ecosys­tem, the con­cept of at­tract­ing in­vest­ment by making one’s in­vest­ment con­di­tions more at­trac­tive than those in com­pet­ing economies is out­dated. We need a global sin­gle, open cy­berspace.

The sec­ondWorld In­ter­net Con­fer­ence in­Wuzhen, East China’s Zhe­jiang prov­ince, could be the start­ing point of dis­cus­sions be­tween China and the EU, for in­stance, on how to fa­cil­i­tate on­line pur­chases of dig­i­tal con­tents and pro­mote af­ford­able high qual­ity par­cel de­liv­ery. Ob­vi­ously, at a later stage anec­do­tal ev­i­dence should be com­ple­mented through aca­demic study of re­spec­tive In­ter­net reg­u­la­tions in China and the EU.

The au­thor is pres­i­dent of Chi­naEU, a non-profit plat­form aim­ing to boost bi­lat­eral dig­i­tal co­op­er­a­tion.

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