By 2010, China will have roughly 1.6 billion people. Today, about 100 millions have internet access. The government just announced the ambitious plan to reach half of the population by 2010. That's 800 million people.

That's right. 800 millions. About 3 times more than the entire population of USA. Let it sink in. Counting this year, they have 5 years to reach this goal. This means they will be adding roughly the size of US market today every other year. Wow.

China government is busy planning various part of this project. I will offer the software point of view for this whole ecosystem. As usual, with a bit economic spin.

Where is the money?

The hardware part of the money is so gigantically huge. We are talking about the internet market that is 3 times bigger than US. Think about all the PCs, thin-clients, servers, switches, routers, service providers, fiber cables, databases, etc.

And that dwarfs compared to the software and service part of the market. 800 millions people is a lot of razor blades. How much online business? eBay, Amazon, Google, Vonage, IP-TV, games, and gambling. All these have been tested before during the dot-com days. Many, many business plans were studied, funded, and tested during those days. When they do it again in China, there will be less mistakes.

Standardize for Innovation

Standards freeze part of the system so that the rest of the system can innovate freely without destabilizing the whole. Put it differently, don't innovate on this part. For example, the location of gas and brake pedals is pretty standardized by now. No car makers will try to be different in this part of the design. If they do, drivers will be confused.

It is imperative for China to establish as few standards as possible to encourage innovation. It is more important to have enough so that the society can benefit from interoperatibility and market competition.

From software's point of view, 3 standards are must-haves:

• Document format: Standardized document format allows more than 1 applications to read and/or write the same document. Imagine HTML is proprietary. One browser cannot then read the web site created by others. Internet will not be what it is today. Viewing, writing, and exchanging documents are the #1 reason people get online. 800 millions users seem way too many for a single vendor to dominate.
• Operating System API: Application flourishes with volume. The more people use the application, the better it becomes. Volume depends on the number of systems offering the same OS API that application is written on. Today, software vendors spend lot of money and effort porting their software to capture the customers. If OS API is standardized, smaller software vendor can thrive easier. An ecosystem will then emerge.
  China cannot afford a proprietary OS API. A market this size should allow free innovation as much as possible. China should a stable and open-sourced OS as the reference implementation to its national standard OS API.
• Hardware Platform ABI: HW ABI allows innovation done at the implementation of those ABI but not itself. This standard encourage HW level innovation without affecting the interoperatibility of operating systems or applications. This is similar to standardizing the pedals but not how engine works. There can be diesel powered cars, gas-powered, solar-energy, hybrid, etc. The drivers still just drive.