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Factors Influencing the Diffusion of the Internet in China: 1997-2001
Unformatted Document Text:  17 arbitrarily according to people’s registered permanent residence, so the proportion of urban population by itself could not represent the cosmopolitanism level. The high rate of population with higher education, average production capability (GDP per capita), income of whole population including those in rural area, and the procession of high-tech facilities (number of computers per 100 people) can portray the big picture of the cosmopolitanism level. In a developing country with more than 50% of population earning less than 2 US$ each day (World Bank, 1998), making ends meet is a major concern when individuals decide whether to adopt the Internet. The charge for an Internet connection comprises a phone connection fee and an Internet Service Provider (ISP) fee. CNNIC (Jan. 2002) statistics show that the majority of Internet users’ (51.4%) monthly expenditure was falling to between 50 and 200 RMB (around 6- 25 US$). A statistic from the Global Competitiveness Report shows that the average annual ISP for 20 hours of monthly Internet access in China is equal to 9.33% of GDP per capita. This is a significant expense compared with the same variable of 0.65% in the U.S. and 0.49% in Japan. It is within expectation that the income level is a key indicator of Internet diffusion and adoption, and it is natural that more expenditure on telecommunication corresponds with higher income. Only urban residents’ income level is significant in the model as a predictor of diffusion. Again, it suggests that cosmopolitanism is a significant predictor, since rural residents’ income is not a matching significant predictor on Internet population. Furthermore, the overall literacy rate is not a significant indicator to predict Internet diffusion, but the proportion of population with higher

Authors: Lin, Jia.
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17
arbitrarily according to people’s registered permanent residence, so the
proportion of urban population by itself could not represent the cosmopolitanism
level. The high rate of population with higher education, average production
capability (GDP per capita), income of whole population including those in rural
area, and the procession of high-tech facilities (number of computers per 100
people) can portray the big picture of the cosmopolitanism level.
In a developing country with more than 50% of population earning less
than 2 US$ each day (World Bank, 1998), making ends meet is a major concern
when individuals decide whether to adopt the Internet. The charge for an Internet
connection comprises a phone connection fee and an Internet Service Provider
(ISP) fee. CNNIC (Jan. 2002) statistics show that the majority of Internet users’
(51.4%) monthly expenditure was falling to between 50 and 200 RMB (around 6-
25 US$). A statistic from the Global Competitiveness Report shows that the
average annual ISP for 20 hours of monthly Internet access in China is equal to
9.33% of GDP per capita. This is a significant expense compared with the same
variable of 0.65% in the U.S. and 0.49% in Japan. It is within expectation that the
income level is a key indicator of Internet diffusion and adoption, and it is natural
that more expenditure on telecommunication corresponds with higher income.
Only urban residents’ income level is significant in the model as a
predictor of diffusion. Again, it suggests that cosmopolitanism is a significant
predictor, since rural residents’ income is not a matching significant predictor on
Internet population. Furthermore, the overall literacy rate is not a significant
indicator to predict Internet diffusion, but the proportion of population with higher


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