Beijing Scene, Volume 5, Issue 8, May 7 - 13


It's the E-conomy, Stupid
China needs rules for its nascent electronic commerce industry to avoid monopolies and combat fraud, gambling and illegal entertainment, an industry regulator says.

"Through logging onto the Internet, some people have managed low-level entertainment or gambling. These activities are illegal," says Zhang Jing, director of the State Administration for Industry and Commerce. "The government should implement strict rules to eliminate these players and allow legitimate players into the market," Zhang told the World Economic Forum's China Business Summit in Beijing.

"E-commerce is advantageous to the people of China. Players that are qualified should put forward a common code of conduct," he says.
The powerful Ministry of Information Industry, which plays the dual role of regulator and chief player in the country's telecommunications sector, should take the lead in formulating the code, he says. Prerequisites for companies wanting to conduct e-commerce will include "proper professional status, assets, floor space and accounting procedures," he says.

The government will apply existing consumer rights and fair competition laws to prevent e-commerce monopolies, he says. Strict laws protecting against fraud on the Internet will also be enacted, he says without giving specifics.

Information technology executives attending the business summit said there is a laundry list of obstacles to the development of China's tiny e-commerce industry, from a lack of credit cards to high Internet fees and snail's-pace access. While roughly 80-100 million Chinese have debit cards, most are loath to use them to buy goods over the telephone or the Internet. The problem has less to do with a lack of technology governing financial transactions than with traditional Chinese habits, says Charles Zhang, chief executive officer of the Chinese-language web portal "It's a cultural issue. It's going to take some time to really observe the habits of using credit cards," he says. Almost all of the goods bought on-line by Chinese consumers are relatively large and expensive items that are paid for in cash on delivery, he says. Leehun Lee, the chief China representative of credit card company Visa International, cites bandwidth problems and high government-set telephone and on-line fees.

"It's too slow, there are too many interruptions and it's too expensive," Lee says. Some of the biggest opportunities for Chinese e-commerce appear to be in overseas business-to-business wholesale, an area on which the government has put a premium in order to boost exports. Vincent Lin of Sun Microsystems cites examples in which Chinese flower growers and Christmas ornament-makers have bypassed Hong Kong middlemen to sell their wares online directly to markets as far away as Brazil. "I think a lot of this is happening already," Lin says.

The Taiwanese computer wizard whose CIH Chernobyl virus damaged millions of computer programs worldwide recently has almost finished designing two more powerful versions, a report says.

The Central Daily News says Chen Ing-hou, the creator of the virus, told police he "had been embarking on two more types of CIH virus that would be more powerful than the existing one."

Mr. Chen reportedly says the design is 80 per cent completed. He says that one of the new viruses will be able to penetrate Microsoft NT servers and paralyze them.
The newspaper says police will search Mr. Chen's home in Kaohsiung despite his promise to destroy the viruses.

Socking It Away
Lady octogenarian Zhou Renhua deposited 388 kilograms of coins in exchange for a banknote worth 6,339.58 at a local bank branch. It took some 30 bank tellers 20 hours to count the 285,903 coins.

In late April, the elderly woman went to the bank branch, claiming that she had a lot of coins at home and asked whether she could "sell them to the bank." The bank promised to help her count the coins no matter how many she had.

The tellers were surprised when 18 sacks of coins were delivered to their doorstep. Zhou said the coins had been accumulated by her late husband who sold newspapers for 25 years.

Net Rumors
Authorities have arrested two men who allegedly spread false rumors on the Internet and sparked a massive run on the Bank of Communications, the government-run Newspaper Digest reports.

Wen Baocheng and Lu Peng - both employees at the Ping'an Insurance provincial headquarters in the capital of Henan province - are accused of posting news that the bank was in trouble because a top official had disappeared with a massive amount of embezzled funds.

The rumors prompted depositors to rush to multiple branches in the city to withdraw their funds, it says.
Local newspapers reported long lines forming outside Zhengzhou branches in the following days, and the bank was forced to extend its business hours to cope.
But the report says the situation returned to normal shortly after the arrests. A bank official says that withdrawals during the run totaled "several hundred million yuan."

The report did not specify the motive, but another official with the bank in Shanghai speculated prior to the arrests that the rumors may have come from another financial institution.
He said the Bank of Communications has been unusually successful in Zhengzhou in attracting deposits, perhaps providing competitors with an incentive to take illicit action.
In an early attempt to calm the public, both the Public Security Bureau and the bank's Zhengzhou branch director Deng Siming denied the rumors on local television.
The rumors' impact spread beyond the city, however, causing falls even on the Shanghai Stock Exchange.

Online Piracy
A court has ordered compensation for the author of an article illegally reprinted from the Internet, marking China's first case of on-line copyright infringement, state media says.

A Beijing court ordered financial compensation paid to writer Chen Weihua after the Computer Business Information Weekly last year published an article without Chen's permission.
In May, Chen - using the pseudonym Wu Fang - posted an article on 3-D animation software on a computer-related web site, accompanied by the statement 'All Rights Reserved; No Reprint Without Permission', Xinhua news agency says.
The same article appeared in the Oct. 16 issue of the Computer Business Information Weekly.

The publication later refused to apologize or pay compensation to Chen, claiming that Chen could not prove that he was "Wu Fang."
A Haidian District Court judge ordered the weekly magazine to pay Chen 924 (US$111) and offer a public apology, adding that the article fell under copyright law protection because "it was published on the Internet so the public could read it," the report says.
China's copyright law became effective in 1991.

Better than Viagra
Chinese herbalists say their traditional medicines are as effective as Viagra in ensuring male sexual potency and there is little risk of unwanted side effects.

"Hey, these herbs work better than Viagra. Come and take a look!" shouts a shopkeeper at a Chinese herbal medicine shop to a passing middle-aged man.
Shops specializing in traditional cures abound in China's crowded street markets and shopkeepers insist the array of animal and plant parts will cure many ailments, including impotence.
Ingredients for anti-impotence cures or performance boosters include a variety of processed plants or animal parts, ranging from ginseng root and cinnamon to deer tails and dog kidneys.
Chinese potency medicines, which date back several thousand years, can give either a long-term cure or an immediate boost, according to herbalists.

Viagra, a blue diamond-shaped tablet made by New York-based pharmaceutical giant Pfizer Inc., created a sensation in China even before it hit local pharmacy shelves in February.
From July through November last year, customs seized at least 9,200 Viagra tablets bound for the black market.
There are as yet no official figures on the legal sale of the drug, marketed under the Chinese name "Fierce and Steel."
But long before the Viagra craze, Chinese men dabbled in alleged potency boosters such as ginseng, dried tiger penis or raw snake gall bladders.

Tales of the wonders of Chinese potency cures abound in the PRC, which wants to develop into an international research and trading center for traditional Chinese medicine.
Chinese potency drugs take the form of herbal tea or pills. Herbalists prescribe a mix of herbs to be cooked together with water creating a bitter, dark-colored tea to be drunk. In some cases, the ingredients are made into pills.
The medicine works by stimulating hormones, dilating blood vessels and improving health in general, according to herbalist Yao Zhousan, who is also a medical doctor.

The ingredients prescribed and the quantity varies depending on the kind and degree of sexual impairment.
"The dosage differs from man to man. If the dysfunction is very severe, then he may need 20 to 30 bowls a month," Yao says.
The dosage may decrease gradually with gradual improvement in the patient's system.

While doctors have warned of Viagra's side effects such as headaches, facial flushing, heartburn and vision problems, herbalists say Chinese potency medicine has few side effects unless inappropriately used.
"Chinese medicine is safe," Yao says.

    Previous Stories...

May 7 - 13, 1999

April 30 - May 6, 1999

April 23 - 29, 1999

April 16 - 22, 1999

April 9 - 15, 1999

April 2 - April 8, 1999

March 26 - April 1, 1999

March 19 - 25, 1999


cartoon FYI In Short