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Grasp opportunities and Speed up E-Commerce in Ningbo IT & Information Office of Ningbo Municipal Government Chengbo TAO Abstract: The Information Technology and the Industrial Revolution, focusing on the worldwide application of Internet, are becoming a power that impulses the growth of economy and accelerates the transfer from Industry Economy to Information Economy, which is also called Internet Economy, Digital Economy or New Economy. Moreover, the development of E-Commerce based on the Internet，brings about an even profound impact on the world the global economy and greater changes into the original trade form and system. The article incorporating the physical situation, discusses the foundation and advantages of Ningbo to develop E-Commerce and the importance of the developing, and then proposes several pieces of advice on how to quicken the development of E-Commerce. Key Words: E-Commerce; Government; Policy 1. The Importance of developing E-Commerce in Ningbo First of all, developing E-Commerce is an international trend in the 21st century. The new millennium is an epoch of Information Technology. At present, as Internet is developing with a dramatic speed, people can not only transmit and acquire information via Internet, but can also carry out business activities. The prediction of E-Commerce’s worldwide application is always modified because of its dramatic development. At the beginning of 1998, the Forest predicted that the volume of B2B model business among the states’ companies would arrive at 300 billion dollars by the year 2002. Whereas its latest report believes it can reach 300 billion dollars by the year 2001, and 1300 billion by the year 2003 while the global total volume will reach 3200 billion. By that time, International Business’s E-Commercialization will come into being. Now, developed countries, along with Singapore, China Taiwan, and Hong Kong, are ready to promote E-Commerce Strategies. Under such circumstances and faced with such challenges, it is doubtless for us to grasp the opportunities to develop our e-commerce. Second, developing E-Commerce is a must for Ningbo to rebuild its economic advantages. Ningbo has always been a historic and important trade city in China, and its trade industry, winning leading position in the whole country, has developed rapidly since the implementation of reform and opening policy. In 2000, the amount of import and export totaled 7.5 billion dollars, while the amount of export exceeded 5 billions. Thus, the development of foreign trade is a crucial factor facilitating Ningbo’s economy. In the 21st century, we will face a lot of opportunities, however, we will face some difficulties as well: due to the limit of market’s capacity, the developing speed of international trade has somewhat slowed down for several years, it needs to go up to a new stage. The appearance of E-Commerce brings us a fresh and virtual market, which can globalize the local market, shorten the period it takes for commodity to enter the market, reduce the cost and raise the efficiency. Such opportunities will hoist the local economy’s competitive ability and help rebuild the Ningbo’s advantages for economic development. Finally, developing E-Commerce is a key to Ningbo’s modernization. There are lots of things to do to realize our objectives. Though the modernization’s connotation is plentiful, we ought to foresee that the rapid development of information technology is becoming the engine to impulse the development of economy and society. Information technology, typically featuring in informatization, a peak of global competition in economic and technological field, comes forth onto the front stage of the national economy. It has two-fold implications, when discussed in terms of the relationship between modernization and informatization: first, informatization is the main content branch of modernization, second, informatization is the premise and foundation to achieve modernization, just as what Comrade Jiang Zemin indicated, “We could hardly achieve four modernizations without informatization”. According to the tenth five-year-plan stipulated in the 5th Session of the 15th Chinese Communist Party, promoting vigorously the economic and social informatization is the most important strategic act which penetrates the overall modernization construction. Thus, it is doubtless that E-Commerce, the content and symbol of the informatization, is a key to implement modernization. The extensive application of E-Commerce will transform the conventional ways of manufacturing and operating, alter the current model of service and consumption and implement the organic combination of information flow, cash flow and physical distribution, bringing the society a historical revolution. Then, E-Commerce will be the main barometer to measure the local modernization. Therefore, it may be well said that developing E-Commerce is an important part for the city’s modernization. 2. The practical foundation of Ningbo to develop E-Commerce What are the foundation and the premise of Ningbo to develop E-Commerce? First, the local information infrastructure has been much improved over the past several years, offering a favorable environment for E-Commerce’s development. The Municipal CCP Committee and the city government have attached great importance to this aspect. In 1996, to build the city into a modern international port, they propose a new strategy of expediting the building of Ningbo’s seaport and airport, and turning it into an information port at the same time. After years’ efforts, Ningbo’s information infrastructure, which is in the leading position in the mainland, has been mainly completed, covering the Ningbo’ downtown and its suburbs. The urban broadband network also offers departments of finance, banking, and insurance preferable conditions to build their own industry networks, and thus enables the connection of local information networks and the installation of community optical fiber. The telecommunication network can transmit digitalized local information. Now the population rate of fixed and mobile phones ranks the top across the country. The data communication network is developing rapidly. The comprehensive development of Broadcasting & TV network will be launched; the installation of Cable Modem and city’s SDH key network project has been started. The information infrastructure is the base to develop E-Commerce. Second, the enterprises in Ningbo are highly marketized. In addition, Ningbo’s citizens are famous for running businesses, and they are keen to develop E-Commerce. Most of Ningbo enterprises are of small and medium size, in forms of collective-owned, individual-owned and private-owned. Thus, Ningbo has sound mechanisms for market operations. There is a saying that no market exists if there is no Ningbonese. Especially such traditional industries as apparel, textile and equipment have been developing steadily, resulting in the emergence of some well-known international enterprises, whose markets have covered the whole country. Moreover, enterprises with preferable foundation and condition are interested in E-Commerce very much, such as Youngor, which is planing to doing business online. Thirdly, as a big international port, Ningbo is a convenient place for physical distribution. E-Commerce consists of information flow, cash flow and physical distribution. Physical distribution means commodity’s packing, storage and transportation, thus it is necessary to set up online physical distribution system so as to enable online transactions. Beilun of Ningbo, one of the Chinese four largest deepwater ports, has formed a distribution network with the port as the core. Therefore, Ningbo has the advantages to act as a physical distribution center. Fourthly, the increasing number of Internet users from government, enterprises, and households also offers a good condition to develop E-Commerce. According to statistics, Internet users have totaled150 thousand or so, the first place in Zhengjiang and leading place in the country. 60 percent of city departments, 90 percent of prefecture and regional governments and near 3000 enterprises have built their own web pages, thus laying a good foundation to develop E-Commerce. E-Commerce’s development in Ningbo is on the way. It is estimated that only concerning B2B model, of extroverted enterprises, 60 percent companies especially those engaged in export commodity producing and exporting have began to utilize internet to transmit information and seek trade opportunities. Some big skeleton enterprises, such as Younger, Firs and Veken are planing to develop E-Commerce; and markets with distinctive features have carried on online purchasing, such as China Plastic City, with Cpinfo.Net’s help, whose annual trading volume has reached 12 billion yuan, East China Materials City and Bridge 2 Foods Market. Concerning B2C model, both the volume and the impact of 82.Com have been on the rise. The company has realized online payment and distribution. Both Nbnet.Com and Orientonline.Com promote “online information” service. And concerning G2B model, the biding network of key projects is now able to have online government procurement and medicine purchase. At present, China Merchants Bank, China Construction Bank, Bank of China and Industrial and Commercial Bank of China’s Ningbo branch are all offering online payment transaction. Speaking of physical distribution platform, Ningbo’s physical distribution web site is undergoing its preparatory stage, meanwhile, the E-Commerce platform of port physical distribution is under planning as well. Considering such a favorable practical foundation, Ministry of Information Industry has authorized Ningbo to be the national model city of E-Commerce that should make experiments to improve E-Commerce’s environment and promote E-Commerce applications in enterprises, especially in international B2B model and physical distribution platform. 3. Several proposals to accelerate the development of E-Commerce in Ningbo According to the practical condition, the present kernel is to develop B2B model E-Commerce, particularly in the interior of industry, in other words, in a certain supply chain. Meanwhile, B2C, C2C and G2B models are to be developed steadily: 1.Strengthen government’s guidance and overall planning As E-Commerce is a complicated systematical project concerning different lines of business, it has high demand in security standards. It needs the regulation and planning from the government. The city’s head office of economic information promotion will strengthen leadership and coordinate different departments so as to promote local E-Commerce. To fulfill the demand of a national E-Commerce experimental city, the municipal government has stipulated plans and started to promote the civic E-Commerce development. 2.Construct three centers (centers of exchange, authentication and database) The information exchange center will have a connection built among different local networks to accelerate network’s transmission, to implement resource sharing and to lay a good foundation for E-Commerce’s development. The purpose of the database center is to offer free or cheap space service to support the development, serving as an incubator. The Authentication Center is the key infrastructure to establish the mutual credits and protect the online security of transaction and payment. 3.Set examples of E-Commerce We ought to pay much attention to exemplary project in four aspects. First, government shall play a leading role in the overall project, launching online government procurement. Second, the government shall bring enterprises’ enthusiasm into play, encourage and promote E-Commerce in manufacturing enterprises and marketing enterprises. Third, the city’s resource networks, such as Nbnet.Com, shall probe building online merchandise city upon the current network construction. Forth, the related departments also shall play a leading role in building a network of import and export commodity information to offer B2B platform to foreign trade corporations, thereby impulse the development of Ningbo’s foreign trade. 4.Improve the E-Commerce environment First, digitalization must be promoted in banking systems, as E-Commerce influences the trend of a bank’s development. In Ningbo, E-Commerce has become an advantage of China Merchants Bank to compete with other banks. Therefore, all banks shall launch E-Bank service, and construct unified payment gateway. Second, we shall probe ways of constructing physical distribution and cargo dispatching system. We can put our traffic advantages into play, and endeavor to turn Ningbo into an international physical distribution center. Third, we need to search favorable measures in tariff area. Forth, we shall also find out how to carry out E-Commerce technological standard to expedite the healthy development of E-Commerce. Fifth, publicizing and spreading E-Commerce concept by means of proseminar, forum or other forms will form an atmosphere of developing E-Commerce. 5.Nutrure and train professionals with E-Commerce expertise and innovative capability To meet the requirements of E-Commerce’s development, many universities and colleges, such as Ningbo University provide courses about E-Commerce to train professionals in such fields. Considering the long-term plan, enterprises also shall cultivate their own E-Commerce professionals. Meanwhile, to introduce experts in E-Commerce is also very important.
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