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March 22, 2005
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China hype disease
It's so easy to get excited about China. The rapid growth, the growing affluence, the seemingly sudden transformation from backwater to dynamo. It induces a hypnotic effect on many. Indeed it helps otherwise rational people detach their faculty for critical thinking. It's the China hype disease. A case in point. From CDT: ZDnet.com are reporting China's official IT facts: China is expected to grow 28% this year to 120 mln, according to Xinhua news agency, which quotes an official with China's Ministry of Information Industry. In 2004 the number of Internet users grew 16% to 94 mln. IDC reports that China is the world's #2 PC market - it shipped nearly 16 mln units last year. That number is expected to grow by 13% in 2005. China is the world's biggest telecom market by number of subscribers, with 316 mln fixed-line users, and 340 mln mobile users as of January, according to Xinhua. China will have 402 mln mobile subscribers by the end of 2005.Exciting, especially from a site called "IT Facts" and a post titled "China facts". But often China's predictions aren't worth the paper they are written on. The rate of China's internet useage has been slowing since 1999. From 1999 to 2000 there was 323% growth in internet users; from 2003 to 2004 it was down to 35% and from 2004 to 2005 down to 18%. That's a natural consequence of the growing numbers of users - it's exponential growth approaching its limit. It is hard to see how or why growth will buck this trend. Especially as the numbers for both come from the same report by the official CNNIC. It's not a new phenomena. Back in 2001 the prediction was China would break the 100 million internet user barrier during 2004. Remember in January 2005 the number was still 94 million. If (and it's a big one) the growth rate continues at 18% for this year, the 100 million user mark will be passed around May 2005...a minimum of 6 months "late" or a roughly 10% miss. Prediction is difficult at the best of times. But casually applying growth rates without looking at past trends or having good reasons to expect differently just leads to overestimates and hype. It happens all the time with Chinese data. China often boggles the mind with its possibilities and potential. It also seems to boggle many minds. posted by Simon on 03.22.05 at 02:46 PM in the
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