The China Internet Network Information Centre, China’s state-run internet watchdog, released its 37th semi-annual report on the development of China’s internet last Friday. With no commercial interest involved, it is regarded as the most comprehensive and credible source for socio-economic data on the Chinese internet.
The report shows that China now has 688 million internet users with an Internet penetration rate of 50.3%, an increase of 6.1% from last year. Though it’s still far behind America’s 87.4%, the number is 10.1% more than the Asian average of 40.2%, based on the latest data from the World Bank.
It’s also noteworthy that China’s mobile internet user population has reached 620 million, covering 90.1% of the total population of Chinese internet users. 71.5% of new internet users are using mobile phones as their primary way of accessing the internet, reinforcing China’s mobilization trend.
The report also reveals Chinese people’s usage of the internet in both their personal life and in the business world.
Rural areas to be the driver for further growth
China’s urban internet penetration rate is relatively high: first-tier cities like Beijing have a penetration rate above 70%. In comparison, as of December 2015, internet users from rural areas of China only account for 195 million or 28.4% of total users.
Residents from rural areas account for 50.32% of the Chinese population according to China’s latest demographic reports. The disparity between the two sets of data indicates underdevelopment of internet infrastructure in China’s countryside.
Boosting internet usage in rural areas is now a focus of the Chinese government for the next few years. Based on an earlier plan, the administration plans to invest RMB 140 billion (USD 21.3 billion) to lay broadband in 98% of China’s countryside over the next five years.
Benefiting from the project, internet users in China’s rural areas swelled at a faster pace last year. As of December 2015, users from China’s rural areas had increased 9.5% from 2014, double the growth of the urban area during the same period. For apps exhausted for further growth, the rural market is the next great opportunity.
A plateau for instant messaging apps
Unsurprisingly, instant messaging apps, such as WeChat, are the most popular app category in China. 89.9% of China’s internet users are using at least one instant messaging app. With 4.957 million new users last year, the growth of mobile IM apps in China actually fell short of the increase in internet users, which implies a bottleneck for the category overall.
Runner-up in rank is mobile news readers, used by 77.7% of users on the Internet. Mobile search engines came close, with a 77.1% penetration rate among internet users. Both categories still see double-digit growth but will also need a boost of overall internet users soon to keep up momentum.
Made in China 2025 is not yet in full swing
Though China is actively promoting the concept of smart manufacturing and digitalization with the government’s ‘Internet+’ strategy for industry, most Chinese companies still lag behind in upgrading both their practice and knowledge of modern manufacturing.
The report shows that only 19.9% of companies in the manufacturing sector are conducting or planning on establishing projects in automated manufacturing. Even less are considering introducing industrial robots — only 43.7% have a basic conception of the concept and only 11.0% are having, or are willing to have any pertinent projects.
China launched its Made in China 2025 initiative in May 2015, aimed at upgrading Chinese industry in a manner similar to Germany’s “Industry 4.0” plan. The initiative sets a goal of generating 70% of core componentry and materials domestically by 2025. However, considering the low percentage of automation in the manufacturing sector, there’s likely to still be a winding rocky road ahead for the Chinese manufacturing industry.