Growing and making profits on the internet has been relatively easy for China’s tech firms when the industry took off, says veteran Internet watcher Matthew Brennan to the state-owned CGTN. But those easy gains are over now the government stepped in to regulate the industry and massive growth is harder to get, he adds.
In mid-2016, word started to go around that the Chinese internet had started to enter the “second half of the game.” The number of internet users in China exceeded 1 billion by June this year, making it the country with the largest internet user base in the world. But the rate of growth is slowing, from a 20-percent year-on-year growth rate before 2011 to single-digit growth in recent years.
“The bonus period of consumer internet is now fully over,” said Matthew Brennan, a China-based technology analyst. “The lower-hanging fruits are gone, and the growth opportunities are either going international or going into lower-tier cities.”…
“Before, it was very wild in terms of how those companies operated,” said Brennan. “Now it’s a matter of restoring orders.”…
Attempts to develop the industrial internet also surfaced, with a series of policies introduced to use technology to transform China’s industrial base. In November 2017, China’s State Council issued a guideline on deepening the “internet plus” advanced manufacturing to develop the industrial internet.
Given that China is moving up the value chain, there is a strong emphasis on manufacturing from the government’s perspective, said Brennan. “China has a considerable advantage in manufacturing, having been the world factory for many decades now. Keeping that advantage makes a lot of sense.”
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