What is Internet Plus?
Internet Plus is a new model of industries based on the evolution of the Internet. It refers to the application of the internet and other information technology in conventional industries.
Chinese entrepreneurs in the IT industry first raised the concept in 2013 in a bid to extend their businesses into some service sectors. Premier Li Keqiang brought up the concept of Internet Plus and made it the national strategy in his Government Work Report presented to the National People’s Congress on March 5.
China has identified the development of internet services as an important way to boost industrial innovation and catch up with the advanced economies.
E-commerce giant Alibaba, based in Hangzhou, made history with its recordbreaking initial public offering on the New York Stock Exchange on September 19, opening at $92.70 (£62), nearly 40 per cent higher than its initial public offering price of $68, and surpassing Facebook in market value on the first day of trading.
The company is now valued at $231.4 billion, larger than Amazon and eBay combined, and more valuable than all but 10 companies on the Standard and Poor’s 500 Index.
Investing in online
The success of Alibaba has inspired not only China’s young entrepreneurs, but has also stoked the ambitions of the central government to upgrade industries through marrying them with the internet.
“Following the trend of Internet Plus can make Chinese economy rise,” Premier Li Keqiang said in response to a question on innovation at a media conference on March 15. “The internet creates more vitality and a bigger space.”
The mobile internet is like electricity; it has already brought fundamental change to many industries
In an action plan issued late last month, the central government vowed to implement the Internet Plus strategy, promoting the convergence of information technology and 10 key industries, such as equipment manufacturing, new energy and biopharmaceuticals, so as to evolve from the world’s workshop to a world-class industrial power by 2025.
The Chinese government has set a guidance fund of 40 billion yuan (£4.4 billion) for venture capital investment, and analysts said that the fund will stimulate hundreds of billions in capital from the market, while the 10 key industries will benefit from input in their merging with the internet.
“The mobile internet is like electricity; it has already brought fundamental change to many industries,” said Ma Huateng, also known as Pony Ma, the chairman of Tencent, one of China’s largest internet enterprises. “The internet has embraced not only the third industry - forming internet finance, internet transport, internet medical care and internet education - but has also started penetrating the first and second industries.”
However, Internet Plus is not a simple assembly of the web and the industries. There should be a chemistry there to forge a process of innovating new models, technologies and applications.
Other guidance issued by the government in March expounded explicitly on the importance and steps of building a pro-innovation environment.
China will expedite reforms of industries monopolised by Stateowned enterprises, restrict government intervention in the economy, lower the threshold for new technology and emerging industries, and boost competition by making the market more transparent and fair, the guidance said.
Laws and rules on angel investment will be drafted, along with those to play up the capital market’s role in promoting innovation and support qualified innovative enterprises to issue corporate bonds.
To speed up the transformation of ideas to reality, China will foster closer co-operation among universities, institutes and enterprises, and strengthen exchanges between laboratories and workshops, the guidance added.
Some analysts have compared the milestone files to Germany’s Industry 4.0 action plan and the United States’ reindustrialisation initiative, as they all look to the internet to break the information asymmetry, lower transaction costs, promote division of labour based on specialisation, and improve labour productivity.
Quality over quantity
Admittedly, there is still a big gap between China and its two main traders, the United States and Germany. Yet the fast-rising momentum of China’s input in research and development is laying a solid foundation for the world’s largest manufacturer to become more qualitative than quantitative and catch up with the advanced manufacturing powers.
According to the Organisation of Economic Cooperation and Development, China’s input in research and development has doubled in the past five years, hitting $311 billion last year, overtaking that of the European Union ($292 billion) for the first time.
China’s input in research and development has doubled in the past five years, hitting $311 billion
If the county can make its input account for about 2.5 per cent of its gross domestic product by 2020, it will surpass the United States to become the largest spender on innovation.
Meanwhile, the large scale of web applications in China, which has nearly 700 million internet users, means its benefits to other industries are huge and instant.
According to Tencent, its mobile social media platform WeChat, which has about 500 million active users, generated nearly 100 billion yuan last year and employs more than 10 million people.
China’s constant financial support for innovation can also accelerate the implementation of the Internet Plus strategy.
However, the country still needs to improve the quality of its vocational education system, encourage independent and critical thinking, and cultivate an inclusive attitude to failure.
“Internet Plus will help industries to better meet market needs, and allow the market to play a decisive role in allocating resources,” said Zhao Ping, a researcher of economics and trade at the Ministry of Commerce.
Source: - telegraph
No comments:
Post a Comment