Premier Li Keqiang has stressed the need for more state investment in the internet sector. Photo: Reuters

Posted by George Chen, managing editor of SCMP.com International Edition, on Mar 08, 2015:

Beijing apparently believes it has finally found the right formula for economic transformation after discussing it for many years without any significant progress. Premier Li Keqiang's so-called Internet Plus strategy.

In Li's presentation of his working report at the annual session of the National People's Congress, he spent some time explaining his scheme, which focuses on internet-powered start-ups and how new technology can be applied to traditional sectors.

Communist Party mouthpiece the People's Daily described Li's strategy as being as important as the Industrial Revolution. I admire such ambition, but I also have reservations.

Outside the Great Hall of the People, it is easy to see the impact of internet-related business on the nation's economy.

Interest in China's homegrown internet industry leaders, including Pony Ma Huateng of Tencent, one of the mainland's leading portals, and Robin Li Yanhong of Baidu, known as the "Google of China", far exceeds interest in the bosses of China's Big Four state-owned banks.

Last week in Beijing, when Ma, an NPC delegate, tried to organise a small media briefing, about 200 reporters rushed to meet him, asking questions about everything from his own business to national economic development.

In comparison, Zhang Jianguo, chief of China Construction Bank, one of the Big Four, joked in front of Premier Li last week that big banks had become a "weak force" and less popular, suggesting a lack of government policy support.

Ma is clearly a big fan of Internet Plus. "The internet has opened new frontiers including internet finance, medical services and education that didn't exist before. It should also be extended to traditional industries like manufacturing, energy and agriculture," he said.

Economic transformation is a must as the country cannot simply rely on cheap domestic labour and foreign investments to maintain high growth. On the other hand, the internet may help China open new frontiers for business as Ma suggested, but Beijing apparently does not want to make all content on the internet available to its large population.

We all know the key thing about the internet is freedom. If Beijing misses the point and continues to censor access to information, Premier Li's new Internet Plus strategy will probably just get more Chinese to shop online rather than have any significant and long-term impact on the country's long-awaited economic transformation.

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