China's Porn Potential

Cory Kincaid
BEIJING, China – For those adult entertainment companies still scanning the global landscape for potential porn growth, China is an increasingly viable target region as government-imposed social and political mores are weakening and the importance of the Internet is taking hold.

At present, China has an estimated 68 million Internet users among its 1.3 billion population, and in China's more cosmopolitan cities like Beijing and Shanghai, 30 percent of city residents use the Internet on a frequent basis.

In many estimations, China accounts for the second largest Internet population in the world and trails just behind the United States.

Even American technology powerhouses Microsoft Corp. and Yahoo! made significant inroads into China this week. Yahoo! acquired Hong Kong-based software company 3721 Network Software for $120 million, the maker of a software used for Chinese-language Internet keyword searches and domain names.

In a likeminded move, Microsoft penned two consecutive agreements with the Chinese Government for use of its .Net and office system platforms.

According to a study done by The Research Center for Social Development, after decades of being sequestered by government censorship and web filters, demand for unrestricted Internet access is becoming more pronounced, and the Chinese government is finding it more and more difficult to control the information flow that generates from the Internet.

Despite a 2002 government crackdown on hundreds of Internet cafes, Chinese residents are increasingly web-savvy and aware that censorship tactics are getting weaker as technology gets stronger.

The Research Center for Social Development, which is part of the Chinese Academy for Social Sciences, recently completed a survey on Internet patterns among a cluster of Chinese cities. An estimated 4,100 people of all ages were surveyed on questions related to the Internet.

The survey, which was funded by New York-based Markle Foundation, found that 72 percent of respondents felt that the Internet enabled people to have more political and personal freedom.

Out of those people surveyed, a surprising percentage used the Internet on a regular basis, and among those that did, 63 percent said they had home access, and 41 percent said they used Internet cafes. An even smaller percentage said that they accessed the web from work or school.

As a clear marker that the Internet is not only becoming an integral part of Chinese culture but that it is also beginning to effect how people perceive their government, 61 percent of the survey's respondents thought that the Internet gave them more opportunity to criticize government policies, and 73 percent said government officials "will learn the common people's views better" because of the Internet.

According to the study, only 13 percent said they favor controlling political content.

When asked what their general use of the Internet was for, the study revealed that 57 percent of users go online to browse websites, 51 percent use email, and 49 percent were in the habit of downloading music. A surprisingly low 5.3 percent said they used the web for shopping, due in part to limited use of credit cards in China.

And despite continuing problems with low bandwidth, the China Internet Network Information Center, which maintains a national registry of web addresses, said that it typically registers about 10,000 new web addresses every month.

Yahoo! and Microsoft's recent forays into this global region could also indicate an increased faith that China is the next big growth area for Internet companies.

Yahoo!'s purchase of 3721 Network Software strengthens it presence in the Chinese market as both a brand and as a search resource.