The 4th “World Internet Conference” took place In Wuzhen, near the city of Shanghai. Over the course of four days, 1500 attendants from 80 countries discussed the future of the Internet, including topics such as internet control, technological innovation, and the digital economy. Whilst in the past only big players from China like Jack Ma, founder of the online vendor Alibaba, Robin Li, CEO of Baidu or Ma Huateng from Tencent participated, this year’s guest list included also foreign representatives like Google-Boss Sundar Pichai, Vice-president of Facebook Vaughan Smith and Tim Cook, Chairmen of Apple, who was also one of the event’s keynote speakers.
China counts more than 700 million internet users, which is more than one out of five of the whole world population with internet access.
The future of the Chinese internet
In his welcome speech, Wang Huning, member of the Standing Committee of the Politburo, defended the position of Chinese “Cyber-sovereignty”. Although China is committed to openness towards the outside world, the international community should respect each country’s national authority over the internet, Wang said (the full speech in English can be read here).
The Chinese government sees the Internet as a driving force for its economy, but maintains that it has to be regulated: „We should support security, create order and ensure a safe, stable and flourishing cyber-world.”
However, a big number of international websites and internet services are unavailable for Chinese internet users. In the meantime, China has created its own e-commerce champions. China’s equivalent to eBay is Alibaba, instead of Google there is Baidu, and in place of Facebook and WhatsApp, Chinese users spend their time on Wechat. Before this background, the participants discussed the construction of a common Internet community spanning the globe.
Furthermore, in his speech, Wang Huning praised China’s technological progress and mentioned continuous government support for innovation like artificial intelligence, big data, or the development of quantum computers.
One point of discussion was also the new cybersecurity law, which is in force since 1 June 2017 and has created uncertainty among foreign companies. According to its content, companies have to store customer data on servers within Chinese borders. This has caused worries about data security, industrial espionage, and the theft of intellectual property. Additionally, stricter rules for websites and content are set (for more information read our article).
What to expect?
The Chinese government acknowledges the importance of the internet in the daily life of its citizens and wants to improve quality and customer protection. While in the past people cooked for themselves or went to a supermarket, today more and more is ordered conveniently on the internet and delivered directly to one’s home or workplace. This led to a rapid increase in the online service sector. Alone in 2016, this segment grew by 26.2%. To continue this trend, internet and online services have to be affordable and accessible.
What’s more, Chinese online companies will further expand abroad and create new opportunities for both Chinese and foreign companies alike. Payment systems like WechatPay or Alipay are already accessible in different countries, and Chinese bike-sharing companies have recently launched operations in several Western countries.
ECOVIS Beijing’s take
In the short term, e-commerce will likely grow further and make it easier for Chinese customers to buy products directly from foreign businesses (see our Webinar). At the same time, administrative controls will be equally reinforced. Since the approval of the new cybersecurity law last year, new regulations for data transfer and online services have already been announced. Foreign companies that want to expand to the Chinese market should, therefore, make sure that they fulfill all legal requirements when entering China.
Richard Hoffmann is a partner at ECOVIS Beijing China. Richard obtained an honors degree in law and worked in Germany, the United States, and China for various prestigious law firms prior to joining ECOVIS. In addition to being a member of the board of ECOVIS International, he is Supervisor for the China business of a respected German company and shares his extensive knowledge to students by teaching commercial law in China at SRH Hochschule Heidelberg. He has published more than fifty articles in international magazines, frequently speaks at high profile events in China and abroad and is often invited as a legal expert by international TV stations. Contact: firstname.lastname@example.org
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