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Factors Influencing the Diffusion of the Internet in China: 1997-2001
Unformatted Document Text:  21 down, more people can own a PC at home, which is the prerequisite for connecting to the Internet. In reality, the telecommunication costs had continued to increase since 1997, and the telecommunication market has remained monopolistic. The obstacles for China’s Internet development have been widely discussed, though without empirical evidence, and the major barriers have been identified as slow network connections, rising expenses, regulatory uncertainty, and lack of competition from the telephone monopoly (Anderson, 2000). WTO entry does not mean a total opening of China’s Internet market. China’s membership status in the WTO will not fully clear the institutional barriers on its telecommunications regulatory reform and implement the WTO Agreements in this sector (Zhang, 2000). The Chinese government will likely seek a smooth and orderly progression based on “licenses and strong legal and regulatory oversight” (Anderson, 2000). Rather, WTO entry will accelerate the regional discrepancy within China, and the digital divide will be widened with China’s entry into World Trade Organization. WTO entry required the permission of 25% percent of foreign investment on data services at the first phase in Beijing, Shanghai and Guangzhou in next three years. Fixed service will not allow foreign investment in three years, after which only 25% foreign investment will be allowed in Beijing, Shanghai and Guangzhou. These cities already have high Internet penetration, so the WTO entry will not bring large-scale change nationwide in the foreseeable future.

Authors: Lin, Jia.
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21
down, more people can own a PC at home, which is the prerequisite for
connecting to the Internet.
In reality, the telecommunication costs had continued to increase since
1997, and the telecommunication market has remained monopolistic. The
obstacles for China’s Internet development have been widely discussed, though
without empirical evidence, and the major barriers have been identified as slow
network connections, rising expenses, regulatory uncertainty, and lack of
competition from the telephone monopoly (Anderson, 2000).
WTO entry does not mean a total opening of China’s Internet market.
China’s membership status in the WTO will not fully clear the institutional barriers
on its telecommunications regulatory reform and implement the WTO
Agreements in this sector (Zhang, 2000). The Chinese government will likely
seek a smooth and orderly progression based on “licenses and strong legal and
regulatory oversight” (Anderson, 2000). Rather, WTO entry will accelerate the
regional discrepancy within China, and the digital divide will be widened with
China’s entry into World Trade Organization. WTO entry required the permission
of 25% percent of foreign investment on data services at the first phase in
Beijing, Shanghai and Guangzhou in next three years. Fixed service will not
allow foreign investment in three years, after which only 25% foreign investment
will be allowed in Beijing, Shanghai and Guangzhou. These cities already have
high Internet penetration, so the WTO entry will not bring large-scale change
nationwide in the foreseeable future.


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