April 21, 2016, by Tony Hong
The Internet Economy
By Tony Hong,
PhD Student from the School of Contemporary Chinese Studies UNNC.
There are advantages of managing the Internet because it is an most important wealth generator in the economy. For more than 30 years, China has managed under successive administrations to have its economy grow at a rate of nearly 10% year on year. However, to maintain breakneck double digit growth rates is unsustainable and would only exacerbate several structural problems embedded within China’s economy: excessive debt, profitless SOEs, the real estate bubble, lack of new sources for growth to name a few. The severity of these problems has led China’s economic planners to put all their eggs in one basket since the post-2008 Financial Crisis – China must escape export led growth to a domestic consumer growth model. The Chinese economy is predicted to slow down to 6.5% in 2016 and onwards.
Nine percent plus is no the longer the norm for the Chinese economy. As China shifts into becoming an advanced economy, it’s Big 3 tech companies: Baidu, Alibaba, and Tencent; as well as technology firms such as Huawei, Xiaomi and others are advancing and are en par with other more established. In the beginning they were incubated and protected from larger and more established international companies. Over time, in literally just more than a decade, they have grown indigenously their own innovations and creativity. As such, these Chinese companies are now mature major global players not afraid of competition.
China’s successful nurturing of these previously small IT companies have helped them to grow into a formidable force on the global tech scene. These are now the new kids on the block with success under their belt.
To further support their success the leadership has been promoting the notion of “cyber sovereignty” since late last year, the concept has won support including China’s friend – Russia. The concept is that the internet should not be viewed as a borderless platform for the unhindered exchange of ideas in which it could fall prey to rumour, crime, fake news, and conspiracy theories. But, instead it should be protected through the platform having multiple sovereignties, with rules that govern each of those sovereignties.