Government promises to remove policy barriers in traditional industries for emerging Web firms

China will lower the bar for Internet startups to enter traditional sectors as the nation acts on the "Internet Plus" strategy to boost the economy, senior officials said on Friday.

Lin Nianxiu, deputy director of the National Development and Reform Commission, pledged to remove policy barriers in a number of traditional industries that made it difficult for emerging Web companies to enter.

Eleven segments, including manufacturing, logistics, public services, e-commerce, transportation and artificial intelligence, will be the first to integrate with the Internet-related technologies to boost efficiency and service/product quality.

"We are mulling a 'negative list' mechanism in these industries so the Internet-backed innovations can have the greatest impact on these industries," Lin said.

The negative list will spell out only a few businesses or services that are closed to Internet companies, and the companies will be able to set up any business that is not listed.

A number of industry regulations prevent startups from providing IT services for government-backed projects and State-owned enterprises. The lack of favorable policies also made it difficult for the companies to borrow money from banks and get critical orders.

"The small startups and enterprises are the backbone for the Internet Plus strategy because they push innovations and revamp business models in traditional segments," Lin said.

Huai Jinpeng, vice-minister of industry and information technology, said the mechanism will help traditional sectors adapt quicker to the cutting-edge information technologies.

Internet Plus will work with Made in China 2025, a strategy to lift the country's manufacturing quality.

China is building a number of "smart factories" in which robots will handle microchip-and engine-making and other sophisticated high-end-product manufacturing jobs. According to a target set by the MIIT, the proportion of digital-controlled machines in key processes will reach 43 percent by 2018.

"The government is willing to see innovations generated from the Internet integration although it may go against pre-existing industry rules," he said.

In addition, the country is debating whether online ride-hailing applications can be used to book rides of private cars. Many passengers support such services although they often violate local regulations and threaten the interests of taxi drivers.

Huai said the government will underline its supervision power to keep market order while removing unnecessary restrictions that keep out new players.

The State Council on Wednesday approved the Internet Plus plan to speed up the adoption of Internet technology in traditional industries. The idea was proposed by Premier Li Keqiang in March.

The government hopes to spur domestic consumption with the help of the strategy.

An Hui, director of a think tank under the MIIT, said the central government is trying to build a new growth engine by widening the use of Internet technologies.

China is one of the world's largest Internet markets. Business in Web-related services topped 900 billion yuan ($145 billion) last year, according to the MIIT.

"Out of the top 30 Internet giants in the world, 17 came from China. The industry has great potential to fuel economic development when working with other industries," said Huai of MIIT.

gaoyuan@chinadaily.com.cn

(China Daily 06/27/2015 page3)