GregSheaWiltonPark

1、Comments for the Wilton Park Conference on China and her NeighboursPrepared by Gregory SheaVP, Internet Business DevelopmentXin De TelecomChairman, GNovember 22, 2000First, I would like to thank our gracious hosts at Wilton Park for welcoming us here and providing such impeccably courteou

2、s hospitality as well as John and the folks at XRG for helping to put together the forum and guide our progress.About Xin De TelecomI d like to open my remarks with a brief description of Xin De elecomT that may help you understand why we have support this event. Xin De Telecom is dedicated to the g

3、rowth of the new networked-economy in China through development of communications networks and related technologies and services. Since its inception in 1996 as a 70/30 JV between Seimens and CITIC, Xin De Telecom has providing a combination of consulting and innovative financial services to a numbe

4、r of partners, including Unicom in mobile networks and more recently with the China Railway Telecommunications Centre on a broadband IP network. We also have several other initiatives in cable, satellite, iDEN and trunk mobile radio network domains.Xin De Telecom is also undertaking some strategic I

5、T development projects and direct investments that will complement our network initiatives across a range of areas including IC cards, set top box, and e-commerce and e-Learning investments. E-learning, is a strategic focus for Xin De as it offers a means to accelerate thedevelopment of human capita

6、l. In this regard, Xin De has made the lead investment in G, an online management training site focused on enabling Chinese enterprise managers to learn how to harness the power of the Internet to improve their business performance and better compete post WTO accession. In this regard we

7、also look forward to next years conference, which will focus on the Chinese Enterprise and its role in Chinese society and economy.Introduction1.On Monday we heard the question posed“ where is Europe I”.d like to suggest that we will also need to ask the question where is Technology and state my the

8、sis that technology adoption and development will become an increasingly important common denominator in the next chapter of China reform and opening up effort. s2. That China s technology development has been a core priority of the Government s reform drive since the outset, and has two fundamental

9、 elements: the development of domestic capacity, and the utilization of that capacity by organizations and individuals.3. Technology capacity development has focused heavily on an extraordinary commitment, twenty years ago (given the overall social and economic situation China was in a that time) to

10、 developing world-class communications infrastructure. To a lesser but still significant degree, the Government has worked to build the domestic IT and telecoms hardware industries. Attention to software and tech services industry development has been more recent and uneven.4. Technology capacity de

11、velopment will become increasing driven by (and mark the rise of) the new private sector, particularly in the areas of software and value added services. As the success of failure of China to catch up with India or the US in these sectors will depend as much on human capital as financial capital, it

12、 will pose a real test of the sophistication of Chineseregulators to participate in new ways that do not discourage the special breed of techpreneurs needed to pull it off. If all goes well, we may also see China s tech-preneurs play a more important role in the fourth and fifth generation leadershi

13、p much as we have seen technocrats contribute to the third and fouth generation leadership. More than ever, authority will be derived from education and career achievement, both in China and abroad, rather than from bureaucratic skills in early times.5. Technology adoption has focused to date on ins

14、titutions rather than individuals, especially to enterprises, as seen by the inter-agency effort under the State Council announced this past January to promote the e-commerce adoption by China s top 520 state-owned enterprises, and by many other programs aimed at SMEs. There are also more recently s

15、ignificant initiatives announced in e-Learning, e- government and e-health care.6. In the area of technology adoption, E-commerce is, with some justification,seen as the first real chance China has to“ leap frogEarlier”its economy.catch-up efforts based on capital-intensive industries such as steel,

16、 oil, andautos have met with varying degrees of success. The Internet offers for the first time at comparatively reasonable capital cost the chance for systemic gains in competitiveness across all industries. This is afforded by the instant and universal access to commercial knowledge and collaborat

17、ion, as well as related systems efficiency and methods training. This also plays to intrinsic advantages in Chinese society, namely collaborative networking and a powerful desire and ability to improve through learning.7. While information and communications technology are the initial government pri

18、ority area, biotech, genetics and new materials science will also beimportant areas.Across all sectors of technology, China s success of failurewill depend on the development of healthy and transparent capital markets, reasonable and responsive regulatory environments, welcoming work and living envi

19、ronments for to attract back overseas Chinese and retain the best and brightest young Chinese in the country.8. China s increasing commitment to technology capacity development and adoption has been made very clear in the recently announced outline for the2001-2006 five year plan.As has been pointed

20、 out earlier, China sgovernment has moved away from the paradigm of political revolution to thatof economic development as its primary goal and claim to legitimacy.Increasingly, the government has pronounced have linked this mandate toChina s success or failure in the new global information economy.

21、Everything from enterprise reform to reform of the education, research andhealth systems, and even government administration are founded onembracing“ informatization” i.e. the rapid and intelligent adoption ofinformation and communications technologies. In fact“ informatization” isseen as the key to

22、 successful competition after WTO accession as well as success of the equally important Western development drive. I would recommend to your reading the recently published outline for the 2001-2006 five year plan to see just how clear this commitment is and how carefully laid out. Again, I believe i

23、t supports the claim of my thesis: that technologyadoption and utilization is the primary driver in China s ongoing reform andopening drive.9. I will try to illustrate this impact in four areas; finance industry development, human capital development, economic and trade policy development and finall

24、y political development.Body:refer to mind map and related points1. First finance. The link with technology capacity development and adoption is perhaps strongest here, and can be seen in every domainEconomic. efficiency will be improved through increased transaction efficiency throughtechnology.Aga

25、in the Government led the way in the early 90s with a widerange of“ golden projects” including the golden customs, golden tax andgolden cards. The state sector has joined with the leading state banks launching e-banks earlier this year and soon to adopt the unified Certificate ofAuthentication devel

26、oped by the People s bank as well as interoperating creditcard settlement systems in the first half of next year. Watch again for the new techpreneur innovators to make the major contribution by providing online trading (see A), procurement (see AsiaEC.com) and paymentsolutions (see China

27、Merchant s Bank)Thetech. sector has become theprimary target of direct investment as well as it most rewarding on balance. Similarly Venture Capital has greatly expanded in the past two years and is primarily focused on tech ventures. Of equal importance is the creation ofChina-based VCs that will s

28、urely play an important factor in the development of China s capital marketsThe. most important and profound developmentwill be the launch next year of China s tech board inTheShenzhengreater.transparency and liquidity planned for this market can only hasten the day of similar improvement in Shangha

29、i. Shenzhen has also last month released a new policy of allowing for 100% foreign ownership in tech ventures. If this takes hold, it would play an even more significant role in future economic reform.2. Next human capital. China has come under the management oftechnocrats, many of whom, like Presid

30、ent Jiang, are electronic engineers bytraining. Generational change in economic leadership will be increasingly leavened with successful techpreneurs returning from overseas (Edward Tian, CEO of Netcom, or Ying Wu, CEO of UTStarcom) or springing from the many foreign invested tech companies or emerg

31、ing Chinese tech giants like Legend Computers (who have outdone their mentor HP in applying the internet to their own distribution systems) or Huawei Telecommunications, who sport over 50% staff with advanced degrees in technology. Even in more traditional industries like consumer goods, we see the

32、emergence of anew kind of tech-savy leadership.Take the case of Haier, China s leadingwhite goods maker.Haier s founder Mr. Zhang Rui-mn whose legendarystature as a business leader began with his successful breaking of the bowl ” actually the smashing of defective refrigerators in front of his line“

33、 iromanagers soon after assuming production responsibility at the original Qingdao plant over twenty years ago. Today Zhang has steered his Haier towards the production of IT products and services and is amongst the leaders in adopting e-business practices.3. Economic Policy as mentioned before, inf

34、ormatization has become the buzz word of choice. In addition to the e-commerce adoption initiatives, China has announced a range of projects to encourage the development of software and value-added services, including tax incentives, national treatment for returning Chinese techpreneurs, special Sta

35、te Council investment funds totaling over 10 billion RMB annually, and the creation of special technology and software parks in Beijing, Shanghai and Shenzhen. This marks quite a shift from the previous focus on pressuring foreign tech companies to assemble in China with ever increasing targets for

36、local component sourcing. A formula for narrowing, but never close the tech gap. In trade policy, concessions in technology and telecommunications services marked key elements to the US and EU WTO accession agreements. In fact, I would argue that technology development and adoption rivals national s

37、ecurity in policy priority. Take the case of the highly restrictive regulations on encryption products issued late last year. These were imposed ostensibly to improve national information security. When it became obvious that the more extreme of these restrictions would seriously threaten existing a

38、nd future technology trade and investment from all of China s trading partners, the guidelines were quickly clarifiedSince. then, the Government has been more open to dialogue before rather than after the fact on such technology and economic regulatory issues such as IPR.4. Political Reform I see th

39、e tech development and adoption in China impacting Chinese political reform in four ways:1) led by, and enabling further the development of mature private sector. This in turn broadens the constituency base in the social polity, and will inevitablybe factored into power. In addition to the increasin

40、g throng of returning techpreneurs, look for the home-growns to play a role. Even directly within the party I sight the example of the China Young Entrepreneurs Association under the Communist Youth League, a carefully cultivated 50,000 strong talent pool for future leadership in the Party2) Meritoc

41、racy the rise of the Knowledge Worker vs. the Relationship Worker. Even Princelings are facing this reality. To be successful, you nowneed more than an impressive family pedigree; you need an advanced degree at a foreign university and experience in foreign invested companies, all the better if with a tech company.