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2011 has just passed. It was a lively year for the China’s internet and tech industry. We look back at some of the year’s biggest stories such as Foxconn explosion, Chinese hacking, more censorship and the rise of the Chinese brand smartphones. Follow along after the break, we will run you through all the greatest China tech news in 2011, enjoy !
1. Alibaba’s Fraud Scandal
Early this year, China’s largest e-commerce website, Alibaba.com, has disclosed widespread fraud on its online marketplace that connects mostly China suppliers with buyers around the world. The company disclosed that more than 2,300 of its suppliers engaged in fraudulent sales, with the help of Alibaba’s sales staff. Alibaba lost about $1 billion in market value, and it hurts the company’s reputation. To improve the company integrity, Alibaba has launched real-name authentication for all China users, and also introduced order inspection service. On the other hand, the online shopping site Taobao.com, which operated by Alibaba, was named “notorious markets” by the U.S. trade representative for helping sustain piracy and counterfeiting. Taobao got sued by Swiss watch manufacturers for selling fake watches. To build a trust was always going to be a challenge for Alibaba and Taobao, where counterfeiting and the production of dangerously flawed products are rifed in China.
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2. The Fall of ‘Shanzhai’ Mobile Phones
The Chinese government continuously crackdown on knockoff products in China. A large number of Shanzhai manufactures were penalized by the authority for several months, and successfully forced over 2000 shanzhai phone manufacturers to move away from the city of Shenzhen. Those companies occupied almost 60 percent of the entire knockoff operators in the country. A huge loss resulted behind this industry sector. On the other hands, Shanzhai mobile phones are not as popular as in the past. More and more people choose 3G smart phones. The knock-off manufacturers are weak in research and development. The competition now is in mobile phone operating systems and hardware manufacturers can’t dominate the industry anymore. Those who want to stay in the industry will have to establish their own brand and innovation capability. Although Shanzhai mobile phones are getting less popular in China, there is still a huge demand in developing country.
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3. Lenovo vs. Apple
Apple beats Lenovo for the first time in China market this year. Lenovo, which was the PC industry’s fastest-growing company, enabling it to consolidate its position as the market leader in their home ground. However strong demand for iPhones, iPads and Mac computers pushed up Apple’s sales in China. Lenovo CEO said Apple products are not for low-income people, his company business strategy is to provide more categories of products and to cover different niche markets. So Lenovo has came out several interesting products to compete with Apple. They have the cheapest Android tablet, 5 inch tabletphone, smartphone with voice recognition system, 7-inch honeycomb tablet, world’s smallest desktop PC, smart TV and ultra-laptop. Most of the new product series are aiming shots on Apple. Not to forget, the company even want to introduce game console, which Apple is not in this segment at all.
4. China to Apply More Internet Censorship
In 2011, the Chinese government and authorities have taken a stronger action on internet censorship regarding call for protests. A series of sensitive words has been censored in all local social networking platforms and discussion forums. Any commentary that deemed to be political sensitivities will make the authorities unhappy. Chinese blogger has been arrested for challenging the ruling Communist Party. The government even plans to monitor the movement of 17 million cellphone users and tracking free WiFi users, by using costly web monitoring software. The Internet in China is more like a massive intranet. The powerful GFW has totally blocked all international sites and web services, resulting in the extremely high proportion local web traffic. China’s major tech firms are also supporting the government in its mission to intensify controls of social media, by increasing their investment in ‘tracking surveillance’. China is happy that England has considered the same practice of censoring the web.
5. Chinese Cyber Attacks on Rise
Cyber attacks on U.S. military and defense industry computer systems are increasing, and many of the attacks are coming from China. China might recognized the importance of cyber operations as a tool of warfare. China is targeting U.S. government and commercial computers for espionage, and has developed cyber espionage capabilities so advanced that the U.S. may be unable to counteract. China has admitted that it had invested a commando unit of cyberwarriors called ‘The Blue Army’. China always denied that it doesn’t engage in cyberattacks, but Chinese state television CCTV has briefly displayed a footage showing their military students were training for cyberattacks, and they were caught running interference on U.S. weather satellites. Chinese-made cyber hardware is a threat too. U.S. authorities has launched investigation against Chinese telecommunication equipment suppliers to find out whether they have pose a security threat to the country.
6. The End of Slow Internet Speed in China
China has been putting huge investment into almost every aspect of its economy, yet one crucial area in which China has been lagging behind is the internet network. The country is suffering slow broadband access. The speed and charges have long been drawing Chinese netizens’ concerns. The two nation’s broadband Internet suppliers were using their market dominance to practice price discrimination, and formed a monopoly in the market. The monopolistic activity has caused Chinese internet user to pay more for less. Following the government-initiated anti-monopoly probe, the two telecommunications companies announced they will substantially raise their broadband speeds while further lowering broadband costs over the next five years. They are also planning to have the entire country to run on fiber optic infrastructure. Shanghai, the leading global city in China, has already provided free upgrade for the faster connection speed.
7. Google vs. Chinese Government
Google and the Chinese authorities still have a rocky relationship in 2011. During March, Google was claiming the Chinese government has interfered its Gmail system, causing China users to have difficulty to access their account. Analyst explained it’s an upgrades of the China’s Great Firewall to tighten the flow of information. And of course China has denied the report, claimed Google had made an unacceptable accusation to blame on Chinese government. The download speed of Gmail in China has dropped sharply, more then 1000 times slower compare to the local email service. In June, Gmail was under attack by Chinese hackers, the accounts own by Chinese activists and journalists were the victims. In July, Google has not applied for its Internet mapping license in China, and its social network service has been banned before getting popularize. The online app store for Android smartphone still remains accessible. To avoid all the web censorship dilemma, Google new strategy for China is to capture the booming online advertising market, with the rise of Android mobile devices. Google seems to have found a major new way to break through in China.
8. The Rise of the Chinese Smartphones (with Android)
China’s smartphone demand may well lead to the country becoming the biggest smartphone market. The domestic smartphone market in China has set for a record growth in 2011, the shipments in China grew 58% in the third quarter, overtook the United State. The growth has been driven by an emerging wave of low-cost Android models from local Chinese brands such as ZTE and Huawei. ZTE claimed the world’s No. 4 handset spot in the third quarter, nudging Apple down to No. 5 spot. Huawei has beat out Apple too as is now the third largest manufacturer of smartphones in China market. Smaller companies like Meizu and Xiaomi, have released their new smartphones with rich functionality and attractive price. Both companies have gained a good market share in China. Internet companies like Baidu and Alibaba, joined in the party too. Baidu launched its Android-based mobile OS, hardware provided by Dell. Alibaba launched their new cloud-based mobile OS, which is able to run both Android apps and web apps, the phone was made by Chinese cellphone vendor K-Touch. Next year, manufacturers will upgrade their phones to Ice Cream Sandwich, and Android phones which only cost USD $50 are expected to hit the market.
9. The Rise of Mobile Games in China
While smartphones and tablet devices are getting common in China, the market size of mobile games has greatly increased in 2011. The biggest opportunities in China reside in casual mobile gaming, which doesn’t need too much 3G data access. Angry Birds is experiencing phenomenal growth in China market. It’s free, it has a Chinese moon festival edition, there is even a real-life arcade booth in a Chinese theme park. Rovio, the maker of Angry Birds is planning to further expand its operation, ready to open 200 Angry Birds merchandise stores in the country. The famous fruit-slash casual game Fruit Ninja has a tailored version for the Chinese gamers, it has reached 40 million downloads and racks up $6 million sales in China. Plants vs. Zombies offers Chinese language version and social network edition for the China market, the fans love the game so much that they even put up a hippie party. Developers will face piracy problem in China’s mobile game market, by distributing their games through local internet companies will help to increase brand awareness. Apple has also accepted yuan payment in their apps store, to encourage Chinese user to purchase apps.
10. Big Explosion and Fire at Foxconn’s Factories
Foxconn, the world’s largest maker of cellphones and electronic, continued to make headline news in 2011. Their factories in China had some serious accidents. During May, a terrible explosion had occurred at the Foxconn Chengdu plant in southwest China. Three employees have died and the explosion was caused by combustible dust. With the help from the inland governments, Foxconn only took about 70 days to build up the Chengdu factories for producing Apple’s iPad. In September, a huge fire has broken out at Yantai factory which located in northeastern China. The fire was caused by the aging equipment which used for color spraying. There were less woker’s suicide this year, a young Foxconn worker died of exhaustion after a continuous 60-hour working week got the most attention. One more thing, a documentary film created by Italian journalists will tell you what are the Foxconn workers’ goals for their life.
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Here are other great tech news that we have left out from the top 10, it’s still worth to get your attention !
And that’s it from us, but we’re sure there’s something you’d like to add. That’s what comments are for! Let us know what China’s tech stories made 2011 for you.
Been under a rock? See what else happened this year in our Best of 2011 series.
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