Tags: china

The Secret China Boom

Wednesday, 05 Aug 2009 02:00 PM

There is a secret China boom that is happening right in front of our eyes. It is exploding as we speak, growing by leaps and bounds. The worst thing about this boom is we’ve been told about it over and over again but refuse to listen.

The secret China boom is the Internet. While Americans have a sour dot-com taste in their mouths, the Chinese are just beginning to explore the Internet, let alone utilize its full-blown potential.

The total number of China Internet users reached 338 million as of June 30, representing a 13.4 percent increase from the end of 2008, and over 100 million users more than this time last year, according to the latest report by the China Internet Network Information Center (CNNIC), a government-affiliated Web research organization.

Liu Bing, director of CNNIC’s research and development department, forecasts a 6 percent to 7 percent yearly increase in China’s online penetration rate in the coming years.

When you consider that the Internet penetration of China is only 25.5 percent (in the United States, the Internet penetration is around 75 percent), you can see the possibility for growth in this sector.

Investment in fiber networks and advanced-cable networks has increased household broadband penetration with estimates of 26 percent by 2012 and 31 percent by 2017, according to Media Partners Asia.

The chief beneficiaries of the Chinese Internet explosion will be Chinese Web portal companies.

With Google China facing consistent problems with the government, look for competitors such as Baidu.com, Sohu.com., Sina.com, and Netease.com.

These competitors that have built strong assets in search, online gaming, and mobile applications will be the best positioned to capitalize on the growth.

Remember that 3G mobile phone networks, the same networks that allow for mobile streaming videos and advanced mobile applications, have just been launched in China.

As mobile Web technology grows, we will see China increase its already 155 million mobile phone Web surfers, which currently represent a minority of overall Chinese Internet users.

Even U.S. companies that have purchased or invested in Asian assets will see significant growth. In particular Yahoo!, which owns a significant interest in Alibaba.com as well as Yahoo! Japan, will benefit tremendously because over one-third of the company’s asset value is in Asia, where Internet growth is happening.

Make no mistake about it. China will be the place for growth for the next 100 years. Experts such as Dr. Jeremy Siegel, Jim Rogers, and William J. O’Neill have all said it.

The question then becomes, where in China the growth is going to occur. The answer to that is very simple: the Internet.

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DanMangru
There is a secret China boom that is happening right in front of our eyes. It is exploding as we speak, growing by leaps and bounds. The worst thing about this boom is we’ve been told about it over and over again but refuse to listen. The secret China boom is the Internet....
china
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2009-00-05
Wednesday, 05 Aug 2009 02:00 PM
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