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Published by: Asia Case Research Centre, The University of Hong Kong
Published in: 1999

Abstract

This E-commerce case is a challenging, high-level policy-oriented case. Most analyses of the development of the Internet and/or the use of E-commerce, work from two basic assumptions: (1) the Internet (and hence E-commerce) is global in nature, ie, it has no respect for borders and boundaries; and (2) the development of E-commerce - while dramatic - is evolutionary, ie, it is built upon an existing infrastructure (technical, legal and commercial). However, in China, something ostensibly different has been happening with the government''s drive to develop E-commerce and to promote the use of the Internet. Specifically, for the Chinese leadership, E-commerce is seen to offer the possibility of increasing national trade, and hence the nation''s wealth, without compromising their political control. To do this they have attempted to facilitate business-to-business (or, more correctly, business-to-government) E-commerce while allowing the broader business-to-consumer market to build more slowly of its own accord. Their focus has been the massive trade potential locked into the giant, but extremely unprofitable, state-owned enterprise sector. In other words, E-commerce is seen by the government as potentially providing their ''killer app'' in undertaking SOE reform. The danger in this strategy is that if E-commerce (which by definition disregards national boundaries) were to expose the fragile Chinese banking and financial system to the full onslaught of international trade, the results could be disastrous for the banks, trading system, and the entire government. For the Chinese government therefore, E-commerce encompasses the entire challenge of their ongoing integration into the international community.
Location:
Other setting(s):
1998

About

Abstract

This E-commerce case is a challenging, high-level policy-oriented case. Most analyses of the development of the Internet and/or the use of E-commerce, work from two basic assumptions: (1) the Internet (and hence E-commerce) is global in nature, ie, it has no respect for borders and boundaries; and (2) the development of E-commerce - while dramatic - is evolutionary, ie, it is built upon an existing infrastructure (technical, legal and commercial). However, in China, something ostensibly different has been happening with the government''s drive to develop E-commerce and to promote the use of the Internet. Specifically, for the Chinese leadership, E-commerce is seen to offer the possibility of increasing national trade, and hence the nation''s wealth, without compromising their political control. To do this they have attempted to facilitate business-to-business (or, more correctly, business-to-government) E-commerce while allowing the broader business-to-consumer market to build more slowly of its own accord. Their focus has been the massive trade potential locked into the giant, but extremely unprofitable, state-owned enterprise sector. In other words, E-commerce is seen by the government as potentially providing their ''killer app'' in undertaking SOE reform. The danger in this strategy is that if E-commerce (which by definition disregards national boundaries) were to expose the fragile Chinese banking and financial system to the full onslaught of international trade, the results could be disastrous for the banks, trading system, and the entire government. For the Chinese government therefore, E-commerce encompasses the entire challenge of their ongoing integration into the international community.

Settings

Location:
Other setting(s):
1998

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