China Gets Wired

By Joshua Cooper Ramo/Beijing

It is a narrow room, a meter and a half wide, decorated with the awkward minimalism that passes for modern chic in the still Communist world: peeling white paint, tilting buffet tables, schoolroom chairs bolted together into haphazard couches. But the attraction here isn't the decor; it's the machines: a beige Compaq Proliant 2500 computer and an off-white Dell Poweredge, hooked into a refrigerator-size rack of network routers and, from there, via a thumb-thick black cable, to the infinite abundance of the Internet. Edward Zeng, the 35-year-old Chinese entrepreneur who commands this tiny outpost in the battle for information freedom, can't resist a grin as he looks around the modest but astonishing room buried within a warren of offices in the bunker-like hallways under Beijing's Capital Stadium. As state-sponsored basketball and badminton teams practice overhead, Zeng pats one of his purring servers and ponders an altogether more dramatic kind of game. "Welcome to ground zero," he says.

There is very little you cannot reach from Zeng's tiny room: Tibetan-freedom websites, raunchy Danish porn, headlines from the New York Times. Zeng's 1,000 Internet subscribers can dial into his computers from all over Beijing and connect nearly limitlessly to the electronic world. They can send e-mail, photos and news of China. And they can receive practically anything else. When the government blocks a website, as it still is wont to do from time to time, Zeng's customers simply surf elsewhere. Is reuters.com jammed? They can jump to washingtonpost.com

At night, hundreds of Chinese who don't own a PC crowd into Zeng's six Internet Cafes, where Net time retails for $3.60 an hour. It's fast food for the information age. Zeng, whose Unicom-Sparkice Information Network operates under a license from the government, says his customers are hungry for every byte. "Don't you see?" asks Charles Zhang, another Beijing Netrepreneur. "This is freedom."

This is China? In a country known less for freedom than for a historical fear of information, Zeng and Zhang are signs that Beijing has settled on a policy for the Net that is as bold as it is surprising: jump in with both feet. Though China still blacks out dozens of sites (you won't read this story online in China; Time Warner's Pathfinder site is on the list), a rising generation of Western-educated officials is pressing home the argument that the Net is the perfect vehicle to transport the Middle Kingdom into the 21st century. It's as if Deng Xiaoping's dictum "To get rich is glorious" has collided with Moore's Law (Intel founder Gordon Moore's observation that the speed of microprocessors doubles every 18 months, as prices fall by half) to produce something you might call President Jiang Zemin's Injunction: Plug in, turn on, cash out. "The Chinese get the Net, O.K.?" says Sean Maloney, who ran Intel's Asia-Pacific operations for three years. "China is going to be unrecognizable in five years. And a large part of that change is going to come through the Internet and onto computer screens." Maloney lets the idea sit for a beat as he ponders the idea of 1.2 billion computer-hungry Chinese. "Unrecognizable," he marvels.

Maloney is taking his cues from China's bureaucratic stratosphere, where top officials can't spend enough time chatting up Microsoft, Intel, ibm, Cisco and other members of the Net's royal family. "We can barely keep up with the demand for information," he says. In January the Chinese government approved a new series of laws designed to control how citizens connect to the Internet. But although the laws featured the usual restrictive rhetoric, they were clearly designed not to keep the Chinese off the Net but to get them online in an orderly way.

The laws, and official curiosity about the power of the Internet, have Beijing buzzing these days. From dinner parties given by top officials at the Great Hall of the People to bull sessions among young technocrat planners over cold Snowflake Beer in the cafes of Sanlitun, the conversation has shifted from how to control the Net to how to exploit it. "The government is betting that PCs and the Net can help competitiveness," says Thomas Lin, a Beijing-based product manager for Microsoft. "Now they want them on every desk."

And in every home. Every rich promise you've ever heard about digital technology sounds even more beguiling in China. The country has 350 million children to educate--what better vehicle than interactive television? The Finance Ministry needs to establish bank and savings accounts for China's 284 million workers--what more effective solution than smart cards? Agricultural planners dream of more productive Chinese farms--how better to send weather and agro-science information to 323 million farmers than over the Web?

To tap these benefits, China has embarked on a series of nine "golden projects" that will shotgun state-of-the-art technology into every field from health care to finance. By 2010 hundreds of millions of Chinese will be wired to the Golden Bridge financial network, carrying Golden Card smart cards and automatically forking over a chunk of their salaries to the government via a microchip-enabled Golden Tax. Says Bryan Nelson, Microsoft's commanding general in the region: "China is going to be the ultimate proof of all that the Internet can do. And the amazing thing is, the Chinese seem to understand that. Better than some people in the West, actually."

At a recent dinner in Beijing, Jim Jarrett, Intel's president for China, sat next to an eightysomething woman whose 80-plus husband is a senior Chinese official. "She told me the first thing her husband does every morning is start up his computer and sign onto the Wall Street Journal and the New York Times," he says. "That's his window on the world."

The window is still small--only 300,000 Chinese have access to the Internet, vs. some 25 million in the U.S.--but it is opening quickly. Officials at China's Ministry of Posts and Telecommunications say they hope to have 4 million Chinese connected by the year 2000. At the same time, access to the outside world from China--once tightly controlled over a narrow pipeline--has quadrupled this year. As late as 1996, most Net traffic to and from China had to flow through a single 56-kilobit circuit in Shanghai, less bandwidth than many U.S. homes enjoy. Now China has a pipeline a hundred times wider, and at&t has just been hired to make it even bigger. Will China really have 4 million citizens online by 2000? "Try 20 million," says Zhang, who has watched the government exceed growth targets in everything from telephones to agricultural output.

But there's a catch: the Chinese government may still try to build the electronic equivalent of the Great Wall around its country. As enthusiastic as they may be about the efficiencies of the Net, government officials admit they are still curious about the notion that the Net could somehow be "boxed." In that imagined future, Chinese citizens would have easy access to domestic websites, but sites outside the mainland--cnn.com for instance--might be blocked. China would become one big, self-contained Internet--what techies like to call an intranet--sealed off from the rest of the world. Access to foreign sites would remain under government control. Says a Hong Kong engineer who has worked with China on high-level information policy for two decades: "The Chinese worry about the Net. Will it just be an inundation of Western content, or will it reflect Chinese culture? China has every right to find a balance between local and foreign content."

That's a balance the most nimble Chinese gymnast would find tough to maintain. The Net, after all, is designed to be open. And if the idea of the Web is to make Chinese firms more competitive, that means letting them have access to everything from DuPont's chemicals website to the U.S. Patent Office's listing of new inventions. For that reason, some Chinese think the government will drop all its talk about an intranet and throw open the doors. Says a 24-year-old engineer at Unicom-Sparkice: "Walk into any Chinese company with Net access and look at the hard drives; look at the bookmarks in the browsers. It's all U.S. content."

Even the most vigorous Net proponents argue for a bit of patience. "Some control is needed at this point, because otherwise China would go wild," says UTStarcom's Hong Lu. "If you just jump too fast, it's not good." In an early attempt at a Net policy, the government in 1996 banned access to a range of sites from playboy.com to time.com in order to help combat "spiritual pollution." But an afternoon's surfing in Beijing shows the government firewalls that block access to these sites are only partly effective. While cnn.com is resolutely blocked, other Western news-focused sites are occasionally accessible because of software glitches on the blackout servers. And most Chinese with Net access are savvy enough to find what they want even in the face of a watchful, nervous government. One group of university students in Tibet fired up a browser in front of a reporter recently and pointed it at the most controversial site they could imagine: Bill Clinton's own www.whitehouse.gov The opening screen, "Good evening from the White House," came up with no problem at all.

The ultimate question is whether Jiang's government will continue to allow such information gifts to float into China. Amid the pressures of Communist Party politics and the demands of managing a nation of 1.2 billion people, will he be able to tolerate the triple threat of an Internet society: openness, transparency and democracy? Smarter, better-informed businessmen may be more competitive in the new global economy, but they are also, inevitably, better informed about life in the outside world--and the rights and freedoms that China doesn't yet permit.

Jiang, however, may be China's Surfer in Chief. In a recent interview with TIME, he confided that he has a PC at his Zhongnanhai home and uses it to log onto foreign databases. And top officials insist he is committed to a wired China, fully aware that the country's future depends on growth, which relies, in turn, on technology. Is it just possible that the real great leap forward begins with the initials www?

--With reporting by Jaime A. FlorCruz/Beijing

With reporting by Jaime A. FlorCruz/Beijing