Caixin writes about “a mounting crisis for the Internet in China” which is largely due to vested interests in the industry:
The industry’s revenue structure is marked by strange distribution patterns. Online game industry revenues exceeded 30 billion yuan in 2009. But revenues from online advertising were only 20 billion yuan, and Internet commerce and services income totaled less than 20 billion yuan. So unlike the Internet industry in developed countries, or in any other Chinese business sector, China’s Internet industry revenue structure is freakish, unstable and unsustainable.
The reason is simple: Areas into which the Internet industry can and should be moving are chock-full of longstanding vested interests, especially those of the state-owned monopoly variety. Internet entrepreneurs trying to gain a foothold in these areas are subject to overt or covert resistance, often under a banner of morality, social values, national stability or public safety. They may be attacked and punished. The heavy handedness, artless technique, shallow reasoning, disrespect of human rights, and brazen acts of interest groups are all reminiscent of another time: It’s as if we’ve returned to the days of the Cultural Revolution.
But anti-competitive acts violate China’s effort to build an information society and market mechanisms. Some 2009 events as well as ongoing activities have been unprecedented in the decade since China connected to the Internet. Worth noting are the Green Dam debacle, the World of Warcraft incident, Web site blocking, wireless WAP site cut-offs, and putting popular sites such as Facebook and Twitter behind a regulatory firewall.
