[1] China's telecommunication sector has been growing at an annual rate of between 30% and 50% in the past ten years due to rapid political, economic, and social changes.
However, like most developing countries, the national telephone density and the Internet- user rate remain relatively low, only 23% and 2.18% respectively in 2001.
Since the implementation of China's Tenth Five Year Plan (2001-2005), the PRC has stressed the importance of information technology in its economic development.
There is an optimism within the government that the "Internet and information technology (IT) are crucial factors for building international economic competitiveness and overcoming inter-regional development gaps at home.
Statistics show that many parts of rural China are being left behind while the urban areas reap the benefits of the internet and IT.
Furthermore, there is little economic incentive for Internet Service Providers (ISPs) to expand into regions with low purchasing power and/or population densities.
We can infer from these statistics that users come from a relatively privileged strata of the population, dwelling in highly urbanized settings and concentrated in the prosperous Eastern regions.
Source:[5] The current situation of telephone application and Internet use indicates the severity of the digital divide among regions in Mainland China.
Traditionally, Mainland China's regions have been divided into three categories according to their geographical location and administrative divisions: Eastern, Central, and Western.
Due to low population density and geographical disadvantages, rural areas experience a comparatively extremely high cost of investment in ICT infrastructure.
The majority of the rural areas are in a digital divide as the government haven't developed the technology infrastructure here According to the OECD, income is a key factor in PC and Internet access.
[17] Important structural changes in post-Mao China after Reform and Opening, beginning under Deng Xiaoping's leadership, must be considered in relation to the digital divide.
[20] In addition, China is facing the problem of digital divide due to imbalance of diffusion of ICTs infrastructure, high online charges, insufficiently trained staff, imperfect network legation, and information resource shortage in the Chinese language.
The work of market forces push Internet Service Providers to "shy away from investing in these regions that show little promise of short-term profits.
For those who cannot afford computers, inadequate funding and geographical coverage for public libraries which could provide shared internet access is another factor.
[24] It is necessary that the government undertake efforts to improve education in the Western regions if it wants to build its information society and bridge the digital divide.
Although it mainly aims at improving transportation infrastructure, approximately one million kilometers of new fibre-optic were laid alongside the installation of satellite telecommunications facilities between the years 2001 and 2005.
Recognizing its incapability of monopolizing the huge market and of meeting increasing demand, China launched a telecommunications reform that has been aimed at full competition.
In parallel with reform and reorganization, the China also gave high priority to the legislature work and industrial supervision of telecommunications.
With the reform as the driving force, China's telecommunications developed steadily and rapidly throughout the Ninth Five-Year Plan period.
All of the stakeholders including the Chinese government, state-owned enterprises, private companies, research institutes and universities have played a role in trying to bridge the national digital divide.
In the ninth and tenth five-plan, China gives priority attention to the important role of the information and communication industry.
In particular, great efforts have been made to accelerate the construction and improvement of the IT infrastructure to satisfy the socio-economic needs of western regions of the country.
China has drawn up a series of favorite policies to encourage the domestic and foreign investors participate in the investment and building of the information industry in the western regions.
For instance, under support from Australia and the World Bank, Ningxia launched a distance learning center (DLC) recently, which will help promote development and poverty reduction in this western province of China by introducing the use of information and communication technology to promote distance learning as well as information and knowledge dissemination.