The internet evolved in America first as an academic and military packet switching network then, after 1991, as a commercial tool that came of age with the introduction of the World Wide Web in 1993 for multimedia transfer. The technology that China embraced was already fully fledged, and the Chinese looked for ways to innovate on what was already a working technology platform. In 2008 the number of internet users in China surpassed those in America at 298 million, the most users in any one country in the world. This is a milestone in the country's development over the two decades since Deng Xiaoping's southern tour. China's emergence from isolation to become one of the great cultural, economic, and of course internet, powerhouses in the world is remarkable, and in its own way, unique.
Chinese is the second most widely used language on the internet, and the number of Chinese internet users is growing by 40 percent annually. China's internet population now approaches 500 million - almost twice the US's 250 million - with three-fifths of Chinese using the internet primarily from mobile devices. New business models and stock market floatations by Alibaba, Tencent and Baidu have been highly successful - a global transformation influencing the balance of both economic and social power in today's world. Nonetheless, the character of the Chinese internet, and its experience for China's internet users is likely to remain substantially different from those in the West. China recognizes 55 ethnic groups and hundreds of dialects within 11 major language groups - all of which coalesce on China's internet. The internet will continue to be central to China's growth and influence around the world, precisely because of its traditional strengths in information-intensive disciplines. Red Wired's ground-breaking survey of the Chinese Internet opens new theoretical and empirical studies that will help us to understand China's emergence as a global power in e-commerce and internet innovation.
Arguably China's earliest international e-marketing success has been market maker Alibaba, and its founder, Jack Ma is rightfully considered one of the China's thought leaders. Alibaba supports China's logistics sector with a fluid and accessible market that links producers to wholesalers and retailers. Trade between China, India, US and Europe accounts for 65% of the more than 250 million containers moved around the world each year. Utilization of China's industrial capacity is enormously complex, and creates many new jobs for internet innovators. The percentage of China's exports generated directly or indirectly by foreign owned enterprises is approaching one-half of output (see figure 1).
Alibaba and other Chinese internet services have already moved into advanced logistics and additive manufacturing - the three dimensional printing of industrial parts and products from designs that may be transferred across the internet - is beginning to segue with electronic commerce to radically alter the face of logistics. Around 20% or $1.5 billion of 3D printing is applied to for-profit additive manufacturing, and this is growing 10% annually.
China is the single largest creator of jobs for design, financing, shipping logistics and marketing and retail logistics for Europe, US and Japan - and these countries also keep the profit from products. The trade similarly creates huge numbers of jobs for China which essentially produces goods to order on a cost-plus basis. Both sides have benefited. China has gained from the employment of its vast populace, helping to maintain social stability, and boosting the emergence of educated middle and professional class. Multinational firms have been able to control their labor costs, and have gained scale by sharing factory costs - especially in electronics - with other manufacturers, creating or keeping markets for many new and innovative products (this success is reflected in US-China trade balances, as shown in the figure 2).
Scholarship, science, and other information-intensive activities have traditionally held sway in China's culture. It takes only a small leap of faith to assert that the internet will become central to China's growth and influence around the world, precisely because of its traditional strengths in information-intensive disciplines. Our approach to this book, and to discovering in general what China's emerging internet industry is all about, has been to seek out successful internet firms and their management. We wanted to build our conclusions on first-hand interviews and stories from the entrepreneurs and operations people themselves who have succeeded in China's internet markets. Many, if not most, of these individuals are self-made entrepreneurs-far removed from the academic types that have been instrumental in forging internet businesses in America and Europe. For this reason alone, their stories make for much more interesting reading than those of their Western counterparts.
China is different - in language, culture, business practices and competitiveness. And it is huge - the most populous country on Earth, and now, the biggest user of the Internet. America's early dominance has not given it automatic license in China - many US entrants to Chinese Internet business have found both the challenges and rewards much greater than anywhere else in the world.
Red Wired is the first book to comprehensively survey the commercial, political and social roles of China's Internet at exactly the time that the World's future is being shaped by China's intentions. The internet will become central to China's growth and influence around the world precisely because of China's traditional strengths in scholarship, science and other information intensive activities.
Red Wired explores China's emergent Internet industry by seeking out successful Internet firms and drawing conclusions from first-hand interviews with the entrepreneurs and visionaries who succeeded in forging China's internet markets.
Red Wired will provide a captivating synopsis of what will surely be remembered as China's greatest Cultural Revolution - the explosion of China's 21st century innovations on the Internet.
J. Christopher Westland is Professor of Information & Systems Management at the University of Science & Technology, Hong Kong. He has more than eight years' experience working in industry and more than thirty years' consultancy experience with firms such as Microsoft, V-Tech, Aerospace Corporation, PacBell and others.
1 Source: Chuck Saletta, "Why the 21st Century Belongs to China," www.fool.com, Feb 3, 2009.