Presentation
Meeting the Digital Opportunity: Accelerating the Pace of Enterprise Digitalization

Mr. Zhang Ming
Deputy Chief Economist, Economic Information Centre, State Economic and Trade Commission, P.R. China

There are many opportunities facing Chinese enterprises in meeting the digital opportunity: to improve productivity and production technology, reduce costs and expand international markets. The digital opportunity brings challenges, given the fast pace of technological progress and market competition.

According to the National Statistics Bureau of China, the index of China's ability of digitalization is 6.17, which is equivalent to a mere 8.6% of the USA's ability and only 15.2% of Korea's ability. According to World Bank statistics, compared to the average level of 63.1, the numbers of Internet connecting computers per 10,000 are only 0.16 in China. A study was undertaken in China during the course of last year to ascertain the status of digitalization in large companies. The top enterprise in utilizing IT was found to be Shanghai Motors.

While Chinese enterprises are establishing networks, including intranets, and connecting to the Internet, and although still in a state of development, many companies (over 60%) have established a website, with 90% of companies having access to the Internet. However, e-commerce in China is underdeveloped with in excess of 70% of companies not venturing into the e-commerce market.

With regard to investment in digitalization over the next three years, the top 100 companies in China have committed to investing a total of 3.8 billion Yuan in digitalization, but research has showed that the digitalization of enterprises is still low. In addition, investment in digitalization is insufficient and R&D, products and applications do not yet meet the needs of digitalization. It is important that enterprises realize the importance of digitalization.

In the Ninth Plan of National Development, from 1995-2000, the digitalization of the economy was cited as a key goal. The importance of the promotion of digitalization was stressed at the fifth meeting of the Communist Party of China. The Tenth Plan of National Development highlights the importance of accelerating industrialization through digitalization.

In order to promote digitalization, the Chinese government has introduced some policy measures, such as reducing the tax rate for software companies, the establishment of a venture capital fund, and offers of financial support to key technologies and for the training of senior technicians.

In China, the State Economic and Trade Commission of China, the Ministry of Information Industry and the Ministry of Science and Technology have founded a "lead group of enterprises digitalization" designed to instruct and promote enterprise digitalization. This has been followed by a meeting held in January 2000 on the promotion of the digitalization of enterprises, which was attended by many large companies. The government also sponsors promotional activities, such as forums for enterprise digitalization and supporting the digitalization of large enterprises, and gives recognition to best practice enterprises, which have utilized IT effectively in their businesses and are pursuing policies that include e-commerce.