Most Chinese believe that the inflow of foreign capital to China will do more good than harm to the IT industry. This is drawn from a survey recently conducted by the information center of the State Council Development Research Center.

The survey started on November 25, 1999 by filing questionnaire through fax and internet.

A total of 102 valid questionnaire had been collected and analyzed by December 5. Those respondents are respectively from: IT equipment manufacturer (27 , 0.5%), news media(20, 19.6%), network and software company (17,16.7%), telecommunication administration (12, 11.8%), research institutes (11, 10.8%) and other units(15, 14.7%). The posts of those people answering the questions are: director, chief editor, vice-chief editor, analyst, professor, board director, president, general manager, vice-manager.

In general, the surveyed people think that with China's entry into WTO, foreign capital will accelerate flowing into China's IT industry. They believe that:

First, foreign capital will take a momentum in investing in China's IT industry after China's accession to the WTO. 48% of the people surveyed think this momentum will be very strong, 52% of them think this trend will be accelerated, over 70% of those from network and software companies think this momentum quick and forceful. Network and software will become major fields of the foreign capital injection.

Second, foreign capital injection is beneficial to China's IT industry development in both of the short and long run. 77.4% of the people surveyed think the advantage of foreign capital entrance outweighs the disadvantage it brings about, 22.8% of them think the impact is not significant, only 14.9% holds the contrary view with the first group of the respondents. Specifically speaking, network and software companies and news media tend to adopt more optimistic attitude towards foreign capital entrance. Administrations of telecommunications tend to worry about the strong impact. Research institutes show obvious difference in their judgments about the long-term and short-term effect of the foreign capital's inflow into China's IT industry once China is allowed to the WTO.

Third, it is important to China's IT industry to develop domestic capital market. 70% of the surveyed indicate that a matured domestic capital market is of vital importance to the development of IT industry, 24% vote relatively important and only 6% vote not so important.

Fourth, the Chinese government should take positive measures. 78,4% of the people investigated hope that the government to strengthen the construction of the legal system, develop and improve risk investment market. In addition, half of them (54.9%) think that the government should reinforce the training of technical personnel and 48% of them suggestion increasing R&D investment. Only 23.5% think the government should make more direct investment.

Fifth, China's IT enterprises should also take active measures in response to China's entry into WTO. Facing the accelerated inflow of foreign funds, 76.5% of them think China's IT enterprises should particularly address the issues of management quality and the globalization of their business. About half of those surveyed believe it is vital for China's IT enterprises to increase technological innovation input and to utilize foreign capitals. Only 14.7% think that lowering the price for products and services is the major countermeasure to meet the challenge from foreign capitals. However, the equipment manufacturer and telecommunication administration express their opposition to this move.

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