Ray Van Eng (06/09/97)                      

Sensing that there will be tremendous opportunities in providing Internet access in the Far East in the days and years ahead, the White Plains, NY based Prodigy Inc. is entering the Chinese market and hopes to roll out services within a month's time.

Under tight regulation from the Chinese government, Prodigy has taken on a Chinese partner, the China North Industries Corp (Norinco) Group who will actually operate the networking system, provide connections to users and on behalf of the state-owned Ministry of Posts and Telecommunications (MPT) filter out "forbidden" web sites and areas that carry subversive contents (e.g. political dissident views, pornography etc.)

Prodigy will invest about $50 million in the joint venture over the next three years. Initial services will be available in the Shanghai area. The thousands of users who have already signed up with Prodigy will pay the equivalent of about USD$32 for 30 online hours.

There are currently about 50,000 Internet users in Shanghai and the penchant for Net access is running high, although those yearning to be netizens would have to register with police authorities first and sign releases stating that they will not harm the state or create trouble.

Many who are current customers with local providers (there are 20 of them in Shanghai) are young (under 30) and computer literate. Access charges have dropped from 20 yuan an hour a year ago to 9 yuan (roughly USD$1) today.

However, the lack of household computers and to a lesser degree telephone lines will continue to hamper the Internet expansion. Shanghai officials say that of the city's 17 million people, only six percent of families own PCs.

Total PC sales in China are expected to grow from 1.8 million units in 1996 to 3 million units this year. China has often been dubbed as "the second fastest-growing personal- computer market in the world". Japan is the first.

China is also racing to finish to install 90 million phone lines by the year 2000.

Despite the restrictive measures it imposes on its citizens who want to tap onto the open global network, China has very favorable views of the Internet as a valuable business tool for communication between trading partners both here and overseas.

On May 18, the Chinese government launched an advance information system known as the National Stockpiled Goods Redistribution Network centered in Beijing to shed its load of unwanted products produced by state-owned entities under the planned economic regime of the past.

The network would not only allow Chinese businesses to purchase or barter the goods, international buyers would also get a chance to go bargain hunting for these merchanidze over the Internet.

It is just another sign that the most populous country in the world is further opening itself up for a market economy. It will be interesting to watch how China is going to balance the supply and demand for the most abundant commodity - information - in the coming global networking era.