Prepared by Gregory Shea VP, Internet Business Development(英文版)(doc 10页).doc

Comments for the Wilton Park Conference on China and her NeighboursPrepared by Gregory SheaVP, Internet Business DevelopmentXin De TelecomChairman, GNovember 22, 2000First, I would like to thank our gracious hosts at Wilton Park for welcoming us here and providing such impeccably courteous hospitality as well as John and the folks at XRG for helping to put together the forum and guide our progress. About Xin De TelecomId like to open my remarks with a brief description of Xin De Telecom that may help you understand why we have support this event. Xin De Telecom is dedicated to the growth of the new networked-economy in China through development of communications networks and related technologies and services. Since its inception in 1996 as a 70/30 JV between Seimens and CITIC, Xin De Telecom has providing a combination of consulting and innovative financial services to a number of partners, including Unicom in mobile networks and more recently with the China Railway Telecommunications Centre on a broadband IP network. We also have several other initiatives in cable, satellite, iDEN and trunk mobile radio network domains.Xin De Telecom is also undertaking some strategic IT development projects and direct investments that will complement our network initiatives across a range of areas including IC cards, set top box, and e-commerce and e-Learning investments. E-learning, is a strategic focus for Xin De as it offers a means to accelerate the development of human capital. In this regard, Xin De has made the lead investment in G, an online management training site focused on enabling Chinese enterprise managers to learn how to harness the power of the Internet to improve their business performance and better compete post WTO accession. In this regard we also look forward to next years conference, which will focus on the Chinese Enterprise and its role in Chinese society and economy. Introduction 1. On Monday we heard the question posed “where is Europe”. Id like to suggest that we will also need to ask the question where is Technology and state my thesis that technology adoption and development will become an increasingly important common denominator in the next chapter of Chinas reform and opening up effort.2. That Chinas technology development has been a core priority of the Governments reform drive since the outset, and has two fundamental elements: the development of domestic capacity, and the utilization of that capacity by organizations and individuals. 3. Technology capacity development has focused heavily on an extraordinary commitment, twenty years ago (given the overall social and economic situation China was in a that time) to developing world-class communications infrastructure. To a lesser but still significant degree, the Government has worked to build the domestic IT and telecoms hardware industries. Attention to software and tech services industry development has been more recent and uneven.4. Technology capacity development will become increasing driven by (and mark the rise of) the new private sector, particularly in the areas of software and value added services. As the success of failure of China to catch up with India or the US in these sectors will depend as much on human capital as financial capital, it will pose a real test of the sophistication of Chinese regulators to participate in new ways that do not discourage the special breed of techpreneurs needed to pull it off. If all goes well, we may also see Chinas tech-preneurs play a more important role in the fourth and fifth generation leadership much as we have seen technocrats contribute to the third and fouth generation leadership. More than ever, authority will be derived from education and career achievement, both in China and abroad, rather than from bureaucratic skills in early times. 5. Technology adoption has focused to date on institutions rather than individuals, especially to enterprises, as seen by the inter-agency effort under the State Council announced this past January to promote the e-commerce adoption by Chinas top 520 state-owned enterprises, and by many other programs aimed at SMEs. There are also more recently significant initiatives announced in e-Learning, e- government and e-health care. 6. In the area of technology adoption, E-commerce is, with some justification, seen as the first real chance China has to “leap frog” its economy. Earlier catch-up efforts based on capital-intensive industries such as steel, oil, and autos have met with varying degrees of success. The Internet offers for the first time at comparatively reasonable capital cost the chance for systemic gains in competitiveness across all industries. This is afforded by the instant and universal access to commercial knowledge and collaboration, as well as related systems efficiency and methods training. This also plays to intrinsic advantages in Chinese society, namely collaborative networking and a powerful desire and ability to improve through learning. 7. While information and communications technology are the initial government priority area, biotech, genetics and new materials science will also be important areas. Across all sectors of technology, Chinas success of failure will depend on the development of healthy and transparent capital markets, reasonable and responsive regulatory environments, welcoming work and living environments for to attract back overseas Chinese and retain the best and brightest young Chinese in the country. 8. Chinas increasing commitment to technology capacity development and adoption has been made very clear in the recently announced outline for the 2001-2006 five year plan. As has been pointed out earlier, Chinas government has moved away from the paradigm of political revolution to that of economic development as its primary goal and claim to legitimacy. Increasingly, the government has pronounced have linked this mandate to Chinas success or failure in the new global information economy. Everything from enterprise reform to reform of the education, research and health systems, and even government administration are founded on embracing “informatization” i.e. the rapid and intelligent adoption of information and communications technologies. In fact “informatization” is seen as the key to successful competition after WTO accession as well as success of the equally important Western development drive. I would recommend to your reading the recently published outline for the 2001-2006 five year plan to see just how clear this commitment is and how carefully laid out. Again, I believe it supports the claim of my thesis: that technology adoption and utilization is the primary driver in Chinas ongoing reform and opening drive.9. I will try to illustrate this impact in four areas; finance industry development, human capital development, economic and trade policy development and finally political development.Body: refer to mind map and related points1. First finance. The link with technology capacity development and adoption is perhaps strongest here, and can be seen in every domain. Economic efficiency will be improved through increased transaction efficiency through technology. Again the Government led the way in the early 90s with a wide range of “golden projects” including the golden customs, golden tax and golden cards. The state sector has joined with the leading state banks launching e-banks earlier this year and soon to adopt the unified Certificate of Authentication developed by the Peoples bank as well as interoperating credit card settlement systems in the first half of next year. Watch again for the new techpreneur innovators to make the major contribution by providing online trading (see A), procurement (see AsiaEC.com) and payment solutions (see China Merchants Bank). The tech sector has become the primary target of direct investment as well as it most rewarding on balance. Similarly Venture Capital has greatly expanded in the past two years and is primarily focused on tech ventures. Of equal importance is the creation of China-based VCs that will surely play an important factor in the development of Chinas capital markets. The most important and profound development will be the launch next year of Chinas tech board in Shenzhen. The greater transparency and liquidity planned for this market can only hasten the day of similar improvement in Shanghai. Shenzhen has also last month released a new policy of allowing for 100% foreign ownership in tech ventures. If this takes hold, it would play an even more significant role in future economic reform. 2. Next human capital. China has come under the management of technocrats, many of whom, like President Jiang, are electronic engineers by training. Generational change in economic leadership will be increasingly leavened with successful techpreneurs returning from overseas (Edward Tian, CEO of Netcom, or Ying Wu, CEO of UTStarcom) or springing from the many foreign invested tech companies or emerging Chinese tech giants like Legend Computers (who have outdone their mentor HP in applying the internet to their own distribution systems) or Huawei Telecommunications, who sport over 50% staff with advanced degrees in technology. Even in more traditional industries like consumer goods, we see the emergence of a new kind of tech-savy leadership. Take the case of Haier, Chinas leading white goods maker. Haiers founder Mr. Zhang Rui-min whose legendary stature as a business leader began with his successful breaking of the “iron rice bowl” actually the smashing of defective refrigerators in front of his line managers soon after assuming production responsibility at the original Qingdao plant over twenty years ago. Today Zhang has steered his Haier towards the production of IT products and services and is amongst the leaders in adopting e-business practices. 3. Economic Policy as mentioned before, informatization has become the buzz word of choice. In addition to the e-commerce adoption initiatives, China has announced a range of projects to encourage the development of software and value-added services, including tax incentives, national treatment for returning Chinese techpreneurs, special State Council investment funds totaling over 10 billion RMB annually, and the creation of special technology and software parks in Beijing, Shanghai and Shenzhen. This marks quite a shift from the previous focus on pressuring foreign tech companies to assemble in China with ever increasing targets for local component sourcing. A formula for narrowing, but never close the tech gap. In trade policy, concessions in technology and telecommunications services marked key elements to the US and EU WTO accession agreements. In fact, I would argue that technology development and adoption rivals national security in policy priority. Take the case of the highly restrictive regulations on encryption products issued late last year. These were imposed ostensibly to improve national information security. When it became obvious that the more extreme of these restrictions would seriously threaten existing and future technology trade and investment from all of Chinas trading partners, the guidelines were quickly clarified. Since then, the Government has been more open to dialogue before rather than after the fact on such technology and economic regulatory issues such as IPR. 4. Political Reform I see the tech development and adoption in China impacting Chinese political reform in four ways:1) led by, and enabling further the development of mature private sector. This in turn broadens the constituency base in the social polity, and will inevitably be factored into power. In addition to the increasing throng of returning techpreneurs, look for the home-growns to play a role. Even directly within the party I sight the example of the China Young Entrepreneurs Association under the Communist Youth League, a carefully cultivated 50,000 strong talent pool for future leadership in the Party2) Meritocracy the rise of the Knowledge Worker vs. the Relationship Worker. Even Princelings are facing this reality. To be successful, you now need more than an impressive family pedigree; you need an advanced degree at a foreign university and experience in foreign invested companies, all the better if with a tech company. In