The turnabout for the Chinese economy is not coming in the form of better investments, but through the Chinese Internet. Many financial analysts are stating that in order for China to truly get over the economic downturn they have recently suffered, then the internet is going to play a huge role in this goal.
Chinese Internet Stats
As of June of this year, there were 668 million people in China who were using the Internet. This is a total of 48.8% of the population. What has led financial analysts to believe that that Internet was going to bring the economy back all boils down to ecommerce.
For 2014, ecommerce transactions increased to 59.4% which resulted in 16.39 trillion yuan being spent via online shopping. The goal for ecommerce was meant to be 18 trillion yuan by the end of 2015, something that is very much achievable if the statistics hold for the upcoming year.
The Goal for Chinese Internet
In order for ecommerce to dominate the economy as had hoped, better Internet is being implemented in and around the rural areas of China, in hopes of getting more people online. According to the deputy head of the National Development and Reform Commission, Lin Nianxiu:
The Internet Plus is going to help with economic growth and upgrade the economic structure
According to USITO (United States Information Technology Office), the Internet Plus strategy is meant to help drive more markets towards Chinese Internet. There are several different aspects associated with Internet Plus including:
- Integrating more mobile Internet
- Having more cloud computing
- Bigger data bandwidth
In order for the plan to work for China, this will entail converging the three big networks, constructing more fiber optic networks, improving the speed of the Internet for all users, and also promoting Chinese consumers to utilize the Internet.
How Businesses are using the Internet
There are several examples throughout China of companies who are using the Internet in order to reach more Chinese consumers, and ensure the economy is increasing. For example, Baidu has started integrating their Internet know how with the catering businesses. Through using the Baidu technology, the catering sector is delivering orders faster, making ordering even more convenient for Chinese consumers, and ultimately creating more profits for those restaurants who utilize these services.
Didi Kuaidi, the Chinese taxi and ride on demand provider, is utilizing the mobile and location technology provided by the Internet in order to find consumers who have notified them they need a lift. In addition, it has helped to increase their business.
“The Internet has made it easier for startups and slashed the costs associated with innovation.”
These are two key concepts that are going to be needed in order for the Chinese economy to have a complete turnaround in the future.
The Ministry of Industry and Information Technology has stated that by the end of this year, the Chinese Internet is going to be running at speeds of around 20 megabits per second. Right now, many Chinese consumers are only running at 9 megabits per second. The hope is that through the increase of speed, more businesses will begin using the Internet as a way to increase their revenue, and it will also allow Chinese consumers with a faster way of accessing ecommerce, resulting in more money being spent on these services and products available online.