IT Capability Sourcesheet Date:__4/12/2006______

Team members: Dave Buck Country: China

Dimension / # / Category / High / Med. / Low / Comments/Notes/URL Sources
Political environment / 1 / Political stability / ü / Medium to Low
Calm for now, but facing a questionable future.
http://www.odci.gov/nic/confreports_chinafuture.html
2 / Extent of government promotion of IT / ü / Considerable promotion of central infrastructure, but controls on use by citizenship.
Course readings May 9, 2005 Section: Enterprise Edition: U.S. Edition Page: 36 Blue in a China Shop Steve Ward is still Mr. ThinkPad--just not with IBM.Newsweek Case Studys
3 / Open to IT diffusion
(few trade barriers to IT diffusion) / ü / Medium to High
Open to diffusion, but requires foreign investors to transfer IT knowledge. Weak IP controls make this a difficult situation.
4 / Liberal policy of IT ownership (vs. Regulation/restriction of IT ownership) / ü / Still predominantly state owned, but slowly opening up to private market. Govt owns controlling shares of those privates that do exist. Competition between state entities.
Course readings, case study (Cisco China)
5 / Legal protection for international software copyrights & trade secrets / ü / Low but improving
Outdated Copyright laws that do not cover electronic or digital media. Lack of resources to enforce laws that do exist.
http://www.odci.gov/nic/research_landscape.html
http://www.wpherald.com/storyview.php?StoryID=20060327-113948-8248r
Educational System / 6 / Literacy / ü / China Population = 90.9%
US Population = 97%
Japan = 99%
Spain = 97.9%
Brazil = 86.4%
http://www.odci.gov/cia/publications/factbook/index.html
7 / IT literacy / ü / Increasing rapidly for business, but still very low for population as a whole.
http://www.worldpaper.com/2005/june/1a.html
http://www.worldpaper.com/archive/2002/february_13/february3.html
8 / Extent of knowledge of English / ü / No specific numbers, but evidence of Govt involvement in English language education leads to an estimate of Medium to High
http://www.miis.edu/docs/langpolicy/ch15.pdf#search='China%20english%20language'
http://www.ets.org/Media/Tests/TOEFL/pdf/Test%20and%20Score%20Data%20Summary%2004_05.pdf
9 / Extent of set of written symbols in native language / ü / Country is attempting to unify and simplify its language.
Still large number of characters (2,000) in simplified language.
http://www.odci.gov/csi/kent_csi/docs/v05i1a06p_0001.htm
10 / Hofstede MAS (Target Country / U.S) / ü / http://www.geert-hofstede.com/hofstede_dimensions.php?culture1=95&culture2=18#compare
11 / Hofstede UAI (Target Country / U.S) / ü / http://www.geert-hofstede.com/hofstede_dimensions.php?culture1=95&culture2=18#compare
12 / Hofstede PDI (Target Country / U.S) / ü / http://www.geert-hofstede.com/hofstede_dimensions.php?culture1=95&culture2=18#compare
Language/ Culture / 13 / Hofstede (IND) (Target Country / U.S) / ü / http://www.geert-hofstede.com/hofstede_dimensions.php?culture1=95&culture2=18#compare
IT Diffusion / 14 / Extent of phones per capita (ratio) / ü / 0.011
15 / Extent of computers per capita (ratio) / ü / 0.0007
16 / Extent of TV per capita (ratio) / ü / 0.045
Low to Medium
17 / Extent of IT usage (ratio) / ü / 0.2
Telecommun-ications / 18 / Extent of Internet connections (ratio) / ü / .012
CABC Case, Farhoomand
Infrastruct. / 19 / Support for EDI / ü / CABC Case, Farhoomand
14 Cities connected globally
http://www.ge.com/china/biz/info.html
20 / Availability of digital networks / ü / Medium to High
Significant digital networks in urban areas, less so in rural
CABC Case, Farhoomand
http://www.ebusinessforum.com/index.asp?doc_id=6922&layout=rich_story
21 / Availability of ISDN/fiber / ü / Very sophisticated connections in very small areas. Low penetration of ISDN/Fiber nationally.
http://web.ptc.org:8080/library/proceedings/ptc2000/sessions/monday/m11/m112/
Dimension / # / Category / High / Med. / Low / Comments/Notes/URL Sources
Computer Industry / 22 / Extent of native software industry / ü / Currently low, but Govt 5 yr plan includes considerable development in this area
http://www-128.ibm.com/developerworks/rational/library/may05/pollice/
23 / Extent of native hardware industry (new manufacture, copy, assemble) / ü / Significant manufacturing of lower end network equipment, but growing rapidly in sophistication. Increasing level of R&D ability.
Economy / 24 / Quality of physical infrastructure / ü / Still lacking in effective network of roads and highways, improving steadily. Growing number of quality education facilities. Heavy investment by Govt.
http://english.people.com.cn/200210/17/eng20021017_105203.shtml
25 / Extent of privitization / ü / 1/3 of China’s output is still from State Owned Companies
Discovery Times
26 / GNP per capita / ü / http://www.rediff.com/money/2005/sep/27china.htm?q=tp&file=.htm
Economy / 27 / Extent of joint ventures with international firms / ü / Low to Medium
28 / Extent of foreign direct investment / ü / http://internationalecon.com/currentissues/china/berkun.pdf#search='China%20foreign%20direct%20investment'
29 / Existence/strength of its stock market with respect to world marketplace / ü / Low due to weak banking market and govt involvement
http://www.atimes.com/atimes/China/GE24Ad03.html

Other Pertinent Information:

·  Very high rate of change of many of the above indices

·  most of the trajectory implied by course reading seem to hold true in more recent information sources

·  Rapid development of basic infrastructure elements (roads, electricity, etc. in preparation for 2008 Olympics

·  Serious problems:

o  Land ownership – Much of urban population allowed to own property, not so for rural farmers, leading to frequent unrest

o  Shifting demographics – Much of the young, rural population moving to urban areas to seek employment, stressing urban social and infrastructure

o  Banking industry – Top 4 banks still state owned and controlled, Large number of bad loans, propped up by large foreign currency reserves (mainly U.S. and Japanese)

o  Stock Market – 2/3 of listed businesses are still state owned, due to currency pegging it is difficult for investors to value listed stock

o  Government – Facing questionable future, struggling to find legitimacy under rapidly advancing economic pressure and increasing sophistication of population

o  Political posturing/Nationalism – Growing military capability, combined with increasing govt reliance on nationalism of population for legitimacy has many developed countries very worried.

·  Advantages:

o  Large, low wage, relatively well educated population, attractive to foreign and domestic enterprise

o  Government commitment to improved infrastructure, including higher education, IT, etc.

o  Controlled movement toward increased market based economy

Overall Assessment of IT Capability of Country (2 sentences maximum):

China IT capability is good and growing. Significant resources invested by the government could propel the nation into the ranks of developed nations within 10 years.

Attractiveness of the Country from an IT Strategic Perspective (2 sentences maximum):

Moderately attractive from an IT prospective. Good and growing IT capability is offset by a questionable political environment interfering in investment and basic freedoms.