Govt to boost investment in rural networks

14 Apr 2016

The Chinese government has unveiled plans to invest additional funds in developing broadband networks with the intention of bolstering the nation’s economy. A statement issued by the State Council identified ‘out-of-date information facilities in rural areas’ as one of four bottlenecks slowing down the government’s Internet Plus Circulation action plan, adding that network development ‘will drive huge rural market demands, provide more services for rural residents and expand agriculture products markets.’ No specific details for the new investment were made public, however. Introduced last year by the Ministry of Commerce, the action plan aims to accelerate the integration of the telecommunications and circulation (i.e. logistics and distribution) industries to improve efficiencies, drive down costs, grow profits, stimulate consumption and boost employment.

China Daily writes that the move will be boon to China’s e-commerce giants such as Alibaba, Suning and JD, as the groups shift their focus away from increasingly saturated first and second-tier cities to more rural areas. Citing data from the China Internet Network Information Centre (CNNIC), the paper notes that China’s rural areas still have vast numbers of citizens that do not use the internet. The number of internet users in rural areas grew at almost twice the rate of urban areas in 2015. Further, rural users made up around 28% of China’s internet user base in June 2015, but penetration in the countryside (30.1%) is less than half the rate in cities (64.2%).