Government interference is hampering the growth of electronic commerce and the Internet in China, experts speaking at a high-level conference in Seattle have warned.
BEIJING (SCMP.com) - An audience of 180 United States and Chinese business executives were bluntly told the mainland's potentially lucrative high-technology sector was also criss-crossed with slippery slopes that foreign investors should heed before rushing headlong into doing business there.
Kenneth DeWoskin, who heads PricewaterhouseCoopers' strategic and business development section in Beijing, made it clear it was impossible to prevent Chinese officials from sticking meddling fingers into the country's Internet evolution.
"The guiding hand of the state puts the timely development of e-commerce in China at risk," he declared.
Mr DeWoskin said that even as China's high-technology revolution gathered speed with official blessing, vague rules and regulations were at the same time scaring away foreign participation.
"In the end, China must try to resolve the dilemma between government support and stifling control," he told last week's conference which dwelt on the future of e-commerce on the mainland.
He listed licensing and registration requirements as well as content controls as among the hurdles that threatened a smooth development of the industry.
Stephen Anderson, a commercial attache at the US embassy in Beijing, urged US hi-tech businesses planning forays into China to always remember that the mainland relied on "rule by law" rather than "rule of law".
"This distinction is important and should be kept in mind," he told the conference organised by the Washington State China Relations Council which boasts such members as Microsoft and Boeing.
Mr Anderson believed e-commerce will grow rapidly on the mainland but warned: "We need to be aware of business risks in China".
He also expressed concern over privacy issues, making clear the US disagreed with the controversial rule that gave Chinese officials access to consumer data which Internet companies were required to retain for 60 days.
"I'm very concerned about that rule," Mr Anderson said, adding it was very much a front-burner item for discussion with the Chinese.
Microsoft's top legal adviser in Beijing, Liu Fengming, said China's preoccupation with national security and sovereignty was directly responsible for the many vague rules and regulations governing the information technology industry.
"Content is of huge concern to the Chinese," Mr Liu warned.
Mr DeWoskin predicted it would take at least three to five years before China's complex regulatory system stabilised.
he said foreign investors keen on the Chinese market must make their move now.
