Wednesday, February 28, 2007

A Chill Wind from China

The Web goes Chinese

As we all know, in the 13th and 14th centuries, China led the world in printing, the leading 'information technology' of the time. But with the renaissance and later the industrial revolution, Europe drew ahead. In the 20th century of course, America strode the technology arena like a colossus. And in the 21st century, China is still way behind in what is one of the leading information technologies of today, the world wide web. And that's easily explained - they're a developing country with education and income levels substantially lower than in the West. And they are disadvantaged by a lack of familiarity with the English language, the lingua franca of today's Web. So, of course they are well behind in adoption and use of the world wide web.

Or so conventional wisdom says.

Well, conventional wisdom can be wrong. While researching for a presentation recently, I visited, which tracks world-wide web traffic. I pulled up the list of top 25 websites by traffic, fully expecting to find the usual suspects - Yahoo, Google, Myspace etc. Sure enough, there they were. But surprise, there was at #5. And, apparently a Chinese portal, at #9. The top 25 list was rounded off by 5 more Chinese websites.

Think about it. This means that fully a quarter of the 25 most popular sites on the web are written in Chinese, for Chinese users. And China is big on internet penetration too - according to reports, they may already have more broadband users than the US. Of course, China is not far behind in internet activity of the more nefarious kind - the country is one of the top sources of spam and phishing sites.

So, China is an awesome force on the world wide web. Couple this with their already phenomenal domination in IT hardware (much of the world's supply of computers, including IBM-Lenovo, and almost the entire gamut of electronics hardware, including iPods, are being made in that country), and you have a fairly staggering picture of just how influential this country has become.

And if you agree, as I do, that the world wide web is powerfully shaping social megatrends, then all of us had better accept that China is going to play a far bigger role in deciding how technology and society will evolve in the coming decades.

Who says the Chinese need to learn English?

Monday, February 12, 2007

The Developing World's Latest Export: Inflation?

Managing the world's economies just got tougher

Trepidation has been widespread among many quarters in America and the EU at the wave of exports emanating out of China and, to a lesser extent, India. Here are a couple of news items from the past week that are likely to bring a fresh outbreak of sweat on the brows of the hallowed folks who manage the world's leading economies.

China, reports Bloomberg, is planning to allow its currency to strengthen as a way of checking the unbridled rise in its foreign exchange reserves (which have crossed the staggering figure of a trillion dollars). The Indian government too has recently indicated its inclination to allow the Rupee to rise .

Is this bad? In fact, isn't it (at least in China's case) precisely what lawmakers in the US have been seeking to achieve?

Perhaps, but the effect of these two government's decisions to allow their respective currencies to strengthen is that their exports will get costlier for countries that buy them. And, in doing so, China and India are bringing to a halt the low-cost foreign goods and services the citizens of America and the EU enjoyed for the past several years. In other words, these countries will now begin exporting inflation to the West.

And so, while many in the West will exult to see these countries's exports get more expensive, they would do well to consider this aspect as well. Goes to show that it isn't always great to get your wish!