Rural Informatization in China

W O R L D B A N K W O R K I N G P A P E R N O .
1 7 2
Rural Informatization
in China
Christine Zhen-Wei Qiang

Asheeta Bhavnani
Nagy K. Hanna
Kaoru Kimura
Randeep Sudan
THE WORLD BANK

W O R L D B A N K W O R K I N G P A P E R N O . 1 7 2
RuralInformatization
inChina
ChristineZhenWeiQiang
AsheetaBhavnani
NagyK.Hanna
KaoruKimura
RandeepSudan

Copyright©2009
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ISSN:17265878 DOI:10.1596/9780821380185

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Contents
Foreword ..................................................................................................................................... v
1.Introduction............................................................................................................................ 1
Notes..................................................................................................................................... 2
2.DevelopmentofChina’sRuralInformationInfrastructure .......................................... 3
FixedLineTelephony......................................................................................................... 6
MobileTelephony ............................................................................................................... 6
RadioandTelevision .......................................................................................................... 7
Internet ................................................................................................................................. 7
Notes................................................................................................................................... 10
3.RuralInformatizationInitiativesandOrganizationalModels................................... 11
KeyRuralInformatizationActorsandInitiatives........................................................... 11
OrganizationalModelsforRuralInformatization.......................................................... 14
Notes................................................................................................................................... 21
4.LessonsfromInternationalExperiences ........................................................................ 22
GovernmentandDonordrivenInitiativesandSustainability.................................. 22
PrivateSectorParticipation ............................................................................................. 24
TheAppealoftheFranchiseModel ............................................................................... 25
HybridOrganizationalModels....................................................................................... 28
5.ChallengesforRuralInformatizationinChina............................................................. 30
LackofaCoherentStrategy............................................................................................. 30
WeakCoordinationacrossMinistriesandIntegrationattheProvincialLevel........ 30
UnsustainableBusinessModelsandOverrelianceonGovernmentFinancing ...... 32
LackofDemandDriven,LocallyRelevantInformationResources........................... 32
LowLevelsofPublicAwarenessandCapacityBuilding............................................ 33
WeakLinkstoDomesticICTIndustryandResearchandDevelopmentforRural
Applications ............................................................................................................... 34
LackofSystematicLearningandImpactEvaluation................................................... 34
6.Recommendations ............................................................................................................... 35
FormulateaComprehensiveandCoherentStrategy................................................... 35
SupportInnovativeBusinessModels............................................................................. 36
ConsolidateandShareResources................................................................................... 37
RaisePublicAwarenessandBuildCapacity................................................................. 38
DevelopIntermediaryInstitutionsandNetworks ....................................................... 38
EnsureLearning,Monitoring,andEvaluation ............................................................. 39
iii
iv Contents
7.Conclusions .......................................................................................................................... 40
References................................................................................................................................. 42
Appendixes............................................................................................................................... 45
Appendix1.CentralGovernmentStrategiesandInitiativesforRural
Informatization ............................................................................................................ 45
Notes................................................................................................................................... 51
Appendix2.AnalysisofEighteenPilotProjectsinChina........................................... 52
Appendix3.ImpactEvaluation:Rationale,DefinitionsandFrameworkforRural
InformatizationPilots.................................................................................................. 54
Note .................................................................................................................................... 58
Appendix4.AFrameworkforEvaluationofEighteenPilotProjects ....................... 59

Tables
Table2.1.InformationInfrastructureCoverageinChina,2007 .......................................... 6
Table3.1.RuralInformatizationInitiativesbyCentralMinistriesandAgencies ............. 11
Table3.2.RuralInformatizationProblemsandAttemptedSolutions................................ 15
TableA.3.1.AFrameworktoEvaluateProjectImpact....................................................... 57
TableA.3.2.IndicatorstoAssessProjectImpact ................................................................. 58

Figures
Figure2.1.OwnershipofTelevisioninUrbanandRuralHouseholds,1990–2006 .......... 7
Figure2.2.InternetPenetrationinUrbanandRuralChina,2005–07................................. 8
Figure2.3.PersonalComputerOwnershipinUrbanandRuralHouseholds,1999–
2006 ...................................................................................................................................... 9
Figure2.4.PlaceofInternetAccess,2007 ............................................................................... 9
Figure3.1.KeyElementsofRuralInformatizationPilotInitiatives ................................... 15
Figure5.1.PopulationandInvestmentSegmentationinChina ....................................... 31
FigureA.3.1.DevelopingPerformanceandImpactIndicators......................................... 56

Boxes
Box2.1.CentralGovernmentStrategiesforRuralInformatization,2001toPresent ....... 5
Box3.1.GovernmentModel .................................................................................................. 16
Box3.2.TelecommunicationsProviderModel.................................................................... 17
Box3.3.ProfessionalAssociation/CooperativeModel ....................................................... 18
Box3.4.Franchise/EntrepreneurialModel........................................................................... 19
Box3.5.PrivateSectorModel ................................................................................................ 20
Box4.1.PublicProgramsofAccessCentersinChile ......................................................... 23
Box4.2.EChoupal:AnEvolvingInfrastructureforRuralTransformation ................... 25
Box4.3.CDI:ASocialFranchiseTargetingDisadvantagedUrbanYouth ...................... 28
Box4.4.GyandootPrograminIndia .................................................................................... 29

Foreword
O verthelastdecade,informatization—thetransformationofaneconomyandsociety
throughtheeffectivedeploymentofinformationandcommunicationtechnologies
inbusiness,social,andpublicfunctions—hasbeenasignificantphenomenoninChina.
Launched in the coastal urban areas, the process of informatization has rapidly
expanded to the inner rural areas, where over half of the country’s population lives.
Thismeansthatover700millionpreviouslyunservedruralconsumerscannowaccess
publicservicesandinformation.
TheGovernmentofChinacontinuestoadvancetheinformatizationprocessaspart
of its strategy to reduce rural poverty and improve the living conditions of farmers.
Finding sustainable models that can be scaled will be critical for China to achieve
equitabledevelopmentacrossregions,andtoreducetheruralurbandivide.
The Government of China and the World Bank share a long history of
collaboration. It is my hope that this working paper will serve to deepen the
understanding of the role of informatization in meeting China’s economic and social
needs, particularly with regards to improving livelihoods and creating opportunities
fortheruralpopulation.Wealsohopethattheexperienceandlessonsdiscussedhere
willbeusefultoothercountries.
I would like to express our most sincere thanks to the Advisory Committee for
StateInformationinChinaforitsdedicatedsupportthroughoutthepreparationofthis
study.

MohsenA.Khalil
Director,GlobalInformationandCommunication
TechnologiesDepartment
TheWorldBankGroup

v

CHAPTER1
Introduction
C hina’s recent economic growth has expanded industrialization and urbanization,

upgraded consumption, increased social mobility, and initiated a shift from an
economybasedonagriculturetoonebasedonindustryandservices.Still,morethan
halfofChina’speoplestillliveinruralareas—whereaverageincomepercapitaisless
than a third of the urban average1, a gap that is among the largest in the world.
Reducingthesedifferencesiscriticaltobuildingaharmonious,inclusivesociety.
In its 11th FiveYear Plan (covering 2006–2011), China has adopted a new
development paradigm that emphasizes the building of a Harmonious Society (he xie
she hui) with more balanced development across regions. The new development
paradigm adopts a “scientific view of the development process” that emphasizes
sustainable growth and “peoplecentered.” Accordingly, the government has
substantially increased its commitment to propoor, prorural programs. This new
approach is reflected in numerous official statements and many new programs
introducedinrecentyears.
Thegovernmentisexploringnewwaysofreducingruralpovertyandimproving
thelivingconditionsoffarmers.UntilrecentlyChina’spovertyalleviationeffortshad
focused on tackling absolute poverty, but with attention now being turned toward
relative poverty reduction and narrowing the ruralurban income divide,
informatization2—defined as the transformation of an economy and society driven by
informationandcommunicationstechnology(ICT)—isincreasinglybeingexploredas
awayofhelpingpoorpeople.
Ruralpopulationshavedramaticallyincreasedtheirdemandfornewtechnologies,
policies,andmarketinformation,andobtainingusefulinformationinatimelymanner
has become critical to the rural economy and society. With the arrival of the
informationage,themarketeconomyinruralareashasbeengrowing,andcompetition
in the expanding economy necessitates access to information—especially in
agriculture,whichisparticularly reliant oninformation.ICTisbeingperceivedasan
effectivetoolfordisseminatinginformationresourceswidelyandcosteffectively.
This report draws from background research conducted by the Advisory
CommitteeforStateInformatization,andattemptstoprovideanoverviewofChina’s
rural ICT development primarily in the past 15 years. The report first describes the
statusofChina’sruralinformatizationinfrastructure.ItthenreviewsexistingruralICT
initiatives in China and summarizes them by organizational models. International
examples are included to draw lessons from. Finally, the challenges of rural
informatizationareexamined,andpolicyrecommendationsidentifiedtoaddressthem.
1
2 World Bank Working Paper
Notes

1
Chinaurbanruralincomegapcontinuestowiden
http://in.reuters.com/article/asiaCompanyAndMarkets/idINPEK1715020080124
2
Theterm“informatisation”wascoinedbySimonNoraandAlainMincintheirpublication
L’Informatisationdelasociété:RapportàM.lePrésidentdelaRépubliquewhichwastranslatedin
Englishin1980asTheComputerizationofSociety:AreporttothePresidentofFrance.However,inan
articlepublishedin1987—”TheInformatisationofSociety”inEvolutionofanInformationSociety,
editedbyA.E.Cawkell(London:ASLIB)—Mincpreferredtouseinformatisationandnot
computerization.ThispublicationusestheAmericanizedspelling,“informatization”and
italicizesallgeneralusagesasaborrowed“foreign”word.

CHAPTER2
DevelopmentofChina’sRural
InformationInfrastructure
C hinahasidentifiedruralinformatizationaskeytoachievingnationwidegrowthand
improving people’s capacity for participating in new economic domains. In
addition to specific informatization goals in the 11th Five Year Plan, the related
deployment of strategies such as the State Informatization Development Strategy,
2006–2020 underscore the importance the government has accorded to rural
informatization.Thusthegrowingdigitalgapbetweenruralandurbanareashasbeena
mounting area of concern, encouraging the development of numerous policies and
initiativestopromoteruralinformatizationandbetterequipallcitizensforparticipation
inthenewglobalorder.
KeydevelopmentobjectivesofruralinformatizationinChinainclude:

ɶ Catching up with more advanced regions. Informatization could facilitate contacts
and exchanges between China’s central and western regions and more
developed regions, allowing farmers and agrobusinesses to obtain
technologiesandmarketinformationthatenablethemtomakefulluseoftheir
comparative advantages in developing new products and increasing trade,
market share, and ultimately incomes. Furthermore, leading agrobusinesses
in developed regions can show small and lowvalue industries in less
advancedregionshowtoimprovetheirmanagementandtechnologicalskills
andmarketcompetitiveness,reducingregionalgaps.
ɶ Integrating and modernizing the rural market economy. Most rural enterprises in
rural China are small and private. Given their isolation and weak financial
foundation, the market economy in rural areas remains underdeveloped.
Better rural information infrastructure can provide market information,
communication channels, and financial resources to farmers and rural
enterprises,enablingthesekeyplayersintheruraleconomytoentermarkets
andincreasetheirdiversificationandcompetitiveness.Suchinfrastructurecan
do so by facilitating better farming techniques, helping to choose crops to
plantinresponsetomarketinformation,improvingproductionand resource
management (for example, through geographic information systems), and
reducingmarketingcostsandexploitationbyintermediaries.
ɶ Strengthening delivery of social and public services. Government information
support systems should aim to capture timely, accurate, comprehensive data
3
on local economies and social activities. One approach to improving public
service delivery is to integrate information on rural economies, science and
technology,education,health,socialprotection,andotherareas.Theresulting
commoninfrastructureanddatabasescanthenbesharedacrossministriesand
regionsinsupportofruralservicedelivery.
ɶ Augmenting income and nonagricultural employment through diversification and
increased productivity. With information, farmers are better equipped to make
important decisions and learn about diversified employment opportunities.
With the growing dependence on the services sector, rural economies could
benefitfromdiversifyingintoprovidinglocalICTenabledextensionservices.
ɶ Increasing the quality and relevance of information and the human capacity of the
rural population. Access to relevant information can transform economic
opportunities and improve livelihoods for rural households—especially the
poorpopulationandyoungpeople.Ruralinformatizationnotonlydirectaffects
economic development, but it also brings in modern ideas and forward
looking mindsets from more advanced regions. This can pave the way for
transformative ideas and beliefs, increasing rural, social, and cultural
capacitiesinruralareas.
ɶ Enabling participation in formulating agricultural policies and strategies. National
development strategies and policies try to involve key stakeholders and the
broader public. But it is not easy to involve organizations that represent the
rural poor. In recent years, ICT has been used to engage thousands of rural
people in developing countries to deliberate policies. The spread of ICT in
rural areas makes this type of participatory approach more feasible for
dialogueonagriculturalpolicy.

The Chinese government has been promoting rural informatization since the mid
1970s. This process has fallen into three stages. During the first stage, from the mid
1970stotheearly1990s,theinitialconceptofagriculturalinformatizationemergedfrom
theplannedeconomy’srequirementsforagriculturalstatistics.Inthe1980scomputers
begantobeintroduced,butitwasnotuntiltheearly1990sthatinformatizationgrew.
During the second stage, from the early 1990s to 2000, computerization of
agriculturaldatawasintroducedandseveralsystemsweredevelopedaspartofefforts
toestablishandimprovethesocialistmarketeconomicsystem.In1992theMinistryof
Agriculture issued a plan to strengthen the rural economy’s information system. In
addition to promoting rural economic development, construction began on an
agriculturalinformationsystem.Networksdevelopedrapidlyandagricultureentered
a fast track for informatization, with scattered information becoming more networked.
In1994anewdepartmentwassetupthroughtheinstitutionalreformoftheMinistry
ofAgriculture,andeveryprovincecreatedaninformationdepartmentforagriculture.
During the third stage, since 2001, the government has attached even more
importance to informatization, taking it to a new level, as Box 2.1. Rapid progress has
been made in improving services (from simple oneway delivery of government
informationorservicestotwoway,interactivedelivery),content(fromtheproduction
of basic statistics to comprehensive information on production, markets, and
technology),andservicemodels(fromsimple,traditionalservicemodelsdeliveredby

Rural Informatization in China 5
individual government departments to innovative partnerships cutting across

departments, the private sector, and civil society). With opening markets, nascent
efforts are being made to expedite informatization, supported by partnerships and
greater investments by the government, telecommunications companies, and the
domesticprivatesector.

Box 2.1. Central Government Strategies for Rural Informatization, 2001 to Present
In 2001 implementation began on the 10th Five-Year Plan of Action for rural market information
services. In 2003 a “rural economic information release calendar” was introduced as the main
system for disseminating agricultural information, supported by two national conferences. These
initiatives had positive impacts inside and outside the agricultural system, leading to a surge in
the provision of information systems.
In 2006 the 11th National Economic and Social Development Five-Year Plan proposed to
“integrate agriculture-related information resources, strengthen the rural economic information
application system construction, promote agriculture service organization and mechanism
innovation, encourage and guide farmers to develop different types of specialized cooperative
economic organizations and improve the organization of agriculture.”
The related deployment of agriculture informatization in the State Informatization Development
Strategy, 2006–2020 (issued in 2006 by General Office of the CPC Central Committee and
General Office of the State Council1) aims “to use the public network with a variety of access
methods and affordable prices for farmers, improve rural network coverage, integrate agricultural
information resources, standardize and complete the public information intermediary services,
build the urban-rural information service system in a concerted manner, provide farmers with
appropriate information applications such as market, science and technology, education,
healthcare, etc. and advocate a reasonable and orderly flow of surplus rural labor.”
In 2007 the Ministry of Agriculture proposed the Overall Framework for National Agriculture and
Rural Informatization Construction, 2007–2015. The strategic goal of this framework is to greatly
improve agricultural and rural integrated information infrastructure; enhance modern agriculture,
rural public services, and social management; fully develop information service organizations at
the township and village levels; and gradually complete a sustainable development mechanism
for agricultural and rural informatization—which would fulfill the development needs of modern
agriculture and the construction of a new socialist countryside.
Sources: Ministry of Agriculture Web sites:
http://agri.gov.cn/gdxw/t20071207_933887.htm
http://www.agri.gov.cn/xztz/t20071129_929804.htm

With the increasing priority accorded to informatization by the Chinese
government, numerous initiatives by the government and by telecom providers have
resultedinasteadyincreaseinthecoverageofinformationinfrastructure—including
fixedlinetelephony,mobiletelephony,radioandtelevision,andtheInternetasseenin
Table 2.1. Such initiatives provide an adequate foundation for informatization,
especiallyinruralareas.

Table 2.1. Information Infrastructure Coverage in China, 2007
Year
Category Coverage Referenced Source
Fixed line • 99.5 percent of administrative 2007 (Lit Review Ministry of Information
telephony villages covered paper) Industry: Rural
• 29 provinces covered (all Informatization
administrative villages) construction column
Mobile • China Mobile’s rural information Initiated in 2006 China Daily online
telephony network to improve services to
800 million farmers
Radio and • 117,000 “blind” administrative End of June State Administration of
television villages covered (those with 2006 (Lit Review Radio, Film and Television:
electricity but no paper) related statistics
telecommunications)
• 100,000 “blind” villages with more
than 50 households covered
• 15,000 “back to blind” (villages
that had once, but lost telecom
service) villages repaired
2
Internet • 97 percent of townships and 2008 Ministry of Information
villages have Internet coverage Industry, China Daily
• 92 percent of townships and towns online
have broadband coverage
• Government aims to provide every
village Internet access by 2010
• Initiatives under way for fiber
optics to reach every village and
household
Fixed Line Telephony

The Ministry of Information Industry has been active in encouraging the spread of
fixedlinetelephonyunderitsinitiativetoextendtelephonecoveragetoeveryvillage.
Under this project, in 2007 the six main telecommunications providers shared
obligations based on geographic divisions and extended telephone services to 3,759
administrative villages that previously had no access. Today 99.5 percent of
administrativevillageshavefixedlinecoverage.
Mobile Telephony
By 2007 China Mobile launched a rural information network in 20063 in which it has
invested350millionRMB(equivalentofUS$51million)Thecompanywillenhancethis
networkthroughfurtherconstructioninChongqing,turning itfromthecenter ofthe
westernregionintothenationalcenter,andraisethenetwork’soperationsupporting
ability to promote its sustainable development. By 2009 China Mobile plan to invest
450 million RMB (equivalent of US$66 million) to optimize the functions of the
network,whichoffersbetterservicesto800millionfarmersacrossChina.

Radio and Television

Efforts to extend radio and television coverage have been led by the State
Administration of Radio, Film, and Television, which in 2002 launched a project to
extendtelecommunicationstoeveryvillageaspartofthe10thFiveYearPlan.ByJune
2006 investment in covering administrative villages totaled about 3.64 billion RMB
(US$532 million). This project has reached about 117,000 administrative villages with
electricity but no telecommunications—known as “blind” villages—and repaired
services in 15,000 “back to the blind” villages (those had had telecommunication
services once, but later lost the services) providing nearly 100 million farmers with
accesstoradioandtelevision.Asaresultruralownershipofpersonaltelevisionshas
steadilyincreased,reaching89percentofhouseholds in2006(Figure2.1).

Figure 2.1. Ownership of Television in Urban and Rural Households, 1990–2006
160
140 137.43
134.8
per 100 households
120
116.6
100
89.79 89.43
80 84.08
60 59.04
48.74
40
20 16.92
0 4.72
1990 1995 2000 2005 2006
year
Urban Rural

Source:NationalBureauofStatistics.2007.
Internet
China’s Internet market is migrating from narrowband to broadband access. China
TelecomandChinaNetcom,thetwomainfixedlineoperators,havelaidoutplansfor
extending broadband access under an initiative to reach every household with fiber
optics and started to replace copper cables. China Netcom will invest 15 billion RMB
(US$2.2 Billion) to replace the copper cables with fiber optics in the new network,
whichwilllaunchin2008andisexpectedtobecompletedinthreetofiveyears(Sina
2007).

In2008ChinaNetcomplannedtoimplementthisinitiativeinthemediumsizeand
large cities of 10 selected provinces (regions, metropolitans) in northern China, the
company’s territory. Henan, Shandong, Tianjin have already begun implementing a
pilotprojecttoreacheveryvillagewithfiberoptics.
The number of broadband users in China has grown rapidly in recent years.
According to data from the China Internet Network Information Center, the country
has210millionInternetusersbytheendof2007—laggingtheUnitedStatesbyjust5
million. At that time 78 percent of China’s Internet users were broadband users
(CNNIC2008).
Still,significantdifferencesremainbetweenurbanandruralInternetdevelopment.
Bytheendof2007therewere157millionurbanInternetusersinChina,accountingfor
27 percent of the urban population. By contrast, the 53 million rural Internet users
accountedforjust7percentoftheruralpopulation(Figure2.2).

Figure 2.2. Internet Penetration in Urban and Rural China, 2005–07
30%
27.0%
25%
21.6%
20.2%
20% 18.0%
16.9%
15%
10%
5.1% 7.0%
5% 3.0% 3.1%
2.6%
0%
2005.12 2006.6 2006.12 2007.6 2007.12
Urban Rural

Source:CNNIC2007,2008.

Internetaccessdependsonownershipofpersonalcomputers(PCs).In2000about
10 percent of urban Chinese households owned a PC, compared with less than 0.5
percentofruralhouseholds.By2005thatgaphadwidened(Figure2.3).Accesscharges
are one of the main reasons for lack of Internet access (CNNIC 2008). Internet access
costsaverage900RMBayearperhousehold.GiventhatChina’spercapitaincomeis
still very low—especially in rural areas, at about 3,600 RMB a year—rural household
accesstotheInternetisunlikelytoexpandanytimesoon.


Figure 2.3. Personal Computer Ownership in Urban and Rural Households, 1999–2006
50
47.2
41.5
per 100 households
40
33.1
30
27.8
20 20.6
13.3
10 9.7
5.9 2.1 2.7
0.7 1.1 1.4 1.9
0 0.5
1999 2000 2001 2002 2003 2004 2005 2006
Year
Urban Rural

Source:NationalBureauofStatistics.2007.

About54percentofruralInternetusersaccessitfromInternetcafes—averyhigh
sharerelativetothenationalaverageofusersaccessingtheInternetfromInternetcafes
(33.9percent).Lowerruralincomes4explainthelowerpossessionofhomecomputers
inruralareas(Figure2.4).

Figure 2.4. Place of Internet Access, 2007
80%
67.3%
60% 55.2% 53.9%
40% 33.9%
24.3%
20% 13.7%
0%
Home Internet Café Work
National average Rural area

Source:CNNIC2008.

Thereisalsoalargegapinconnectiontimes,withruralusersaveraging13.7hours
a week compared with 20 hours a week for urban users. Because of their shorter
connection times, rural Internet users focus on basic applications such as email and
instant messaging, and tend not to make full use of more advanced and integrated
applicationssuchasInternetnewsandeservices(includingonlinebanking,shopping,
and stock exchanges). That disparity may widen the information gap between urban
andruralareaseventhoughbasicvoiceinfrastructureinruralareashasimprovedover
the past decade. Thus, analyzing the public access business model in rural areas is
crucialintermsofInternetdevelopmentanddeployment.
Notes

1
www.chinaembassy.org/eng/xw/t251756.htm
2
http://www.chinadaily.com.cn/bizchina/200802/10/content_6447433.htm
3
http://www.chinadaily.net/bizchina/200803/03/content_6502654.htm
4
Accordingto2006censusbytheNationalBureauofStatistics,percapitaincomeinruralareas
was4140RMB(US$580)peryear,whichisathirdofincomesinurbanareas.

CHAPTER3
RuralInformatizationInitiatives
andOrganizationalModels
G iven the priority that China’s government has placed on building the socialist
countryside, a growing range of actors have become involved in rural
informatization.Theseactivitieshaveinvolvedanarrayoforganizationalmodels—and,
tosucceed,shoulddrawonthewiderangeofrelatedinternationalexperiences.
Key Rural Informatization Actors and Initiatives

Government agencies
Many government ministries and agencies at all levels (from central to local) are
involved in rural informatization projects and are pursuing similar goals. But these
efforts are pursued under each organization’s individual mandate and with little
apparent coordination (Table 3.1). Every ministry has initiated its own informatization
program, such as the Ministry of Agriculture’s Golden Agriculture Project and the
Ministry of Culture’s National Cultural Information Resources Sharing Project. Other
keyplayersincludetheMinistriesofCommerce,Education,InformationIndustry,and
Science and Technology (see Appendix 1). Agencies with primary policy and
coordination functions have also engaged in national and provincial pilot projects,
including the Central Committee of the Communist Party of China, National
Development Reform Commission, State Administration of Radio, Film, and
Television, State Council Leading Group Office of Poverty Alleviation and
Development,andMinistryofFinance.

Table 3.1. Rural Informatization Initiatives by Central Ministries and Agencies
Ministry/Agency Mandate Key Projects Year(s)
Central Committee of the China’s central strategic Modern Distance Learning of 2003–
Communist Party of body, with members selected National Party Cadres in 2006
China (CCCPC) by election. The committee’s Rural Areas Project
main focus is improving
agricultural productivity and
increasing the income of
farmers.
(Tablecontinuesonnextpage)
11
Table 3.1 (continued)

Ministry of Agriculture First player to launch rural Three in One (Telephone, 2005
informatization projects to Television, and Computer)
improve the agricultural and Agriculture Information
b
rural integrated information Services Project
platform, and adopt
Golden Agriculture Project 2007
informatization to support
modern agriculture, rural Overall Framework of 2007
public service, and social National Agriculture and Rural
management. Informatization, 2007–2015,
a
and pilot projects
Ministry of Commerce Responsible for formulating Thousands of Villages and 2005
development strategies, Townships Project
guidelines and policies of
Xinfu Project (Commercial 2006
domestic and foreign trade,
information services system
investment, and international
c for the countryside)
economic cooperation
Ministry of Culture In charge of public libraries National Cultural Information 2002
and overall culture activities. Resources Sharing Project
Comprehensive Culture 2006–
Station Project 2010
Ministry of Education Central government agency Distance learning project in 2003
under the State Council, rural primary and secondary
responsible for China’s schools
educational undertakings and
d
language work
Ministry of Finance Formulates and implements National Cultural Information 2002
strategies, policies and Resources Sharing Project (In
medium-and-long-term collaboration with Ministry of
development plans and Culture)
reform programs of public
Distance learning project in 2003
finance and taxation;
rural primary and secondary
participates in
schools (In collaboration with
macroeconomic policy
Ministry of Education)
making; provides policy
advice on macroeconomic
e
regulation
Ministry of Information Focuses on building network Extend Telephone Coverage 2004–
f
Industry infrastructure, expanding to Every Village Project 2005
telecommunications coverage
Rural Comprehensive 2006
in rural areas, and promoting
Agriculture Informatization
information technology
Service Pilot Project
applications in agriculture.
Ministry of Science and Provides science and State Agricultural Science and 2007
Technology technology information for Technology Park
rural residents. Development Program
“Spark” Agricultural Science 2005–
and Technology 110 2010
g
Information Services Project
(Tablecontinuesonnextpage)

Table 3.1 (continued)

National Macroeconomic management Pilot Project for Rural Under
Development agency under the State Informatization development
Reform Council, which studies and
Commission formulates policies for
economic and social
development, maintains a
balance of economic
aggregates and guides the
overall economic system
h
restructuring
State In charge of regulating the Extend Broadcasting (TV, and 2006–2010
Administration of broadcasting industry and Radio) Coverage to Every (phase 2)
i
Radio, Film, and administering radio spectrum Village Project
Television for broadcasting.
State Council A deliberative and coordinating Pilot Project for Rural Under
Leading Group organ, tasked with organizing Informatization in 1,000 Villages development
Office of Poverty investigation and subsequent
Alleviation and research; formulating
Development guidelines, policies and plans
for developing the economy in
backward areas; coordinating
the efforts to tackle the key
issues arising from
development initiatives;
supervising, inspecting
development projects and
facilitating the exchange of
j
lessons acquired
Source:Authorsanalysis.
Notes:
a.http://www.agri.gov.cn/jhgb/t20080321_1029943.htm
b.http://www.agri.gov.cn/jhgb/t20080321_1029944.htm
c.http://english.mofcom.gov.cn/mission.shtml
d.http://www.moe.edu.cn/english/ministry_f.htm
e.http://www.mof.gov.cn/english/english.htm#
f.http://www.miit.gov.cn/col/col4586/
g.http://www.most.gov.cn/zfwj/zfwj2004/zf04wj/zf04bfw/200412/t20041228_31393.htm
h.http://en.ndrc.gov.cn/brief/default.htm
i.http://news.xinhuanet.com/misc/200703/06/content_5806935.htm
j.http://en.cpad.gov.cn/organ/index.html

In addition to centrally driven programs, every province considers rural
informatizationanimportantpartoflocalsocioeconomicdevelopmentplans.
Telecommunications providers
Chinadoesnothaveauniversalaccesspolicyfortelecommunications,suchasafund
forfinancinginfrastructure expansionin underservedandunservedareas.Aspartof
complementarygoalstoassumesocialobligationsanddevelopruralmarkets,China’s
telecommunicationsoperatorsactivelyparticipateinexpandingruralinformatization.In
2004,theMinistryofInformationIndustryinitiatedaprojecttomaketelephoneservices
available to all villages, requiring the six main stateowned telecommunications

providers1 to share universal access obligations based on geographic divisions. These
operatorsincreasinglyviewruralinformatizationasastrategicmove,asurbanmarkets
reachsaturation.
Private information technology firms

Multinational corporations like Intel and Microsoft also play a role in rural
informatization—particularly in promoting innovation and research and development
(R&D) in partnership with domestic public and private actors. Intel, for example, is
interestedinbuildingbusinessinruralChina.Ithastworuralprojects:ajointventure
to build a “farmer PC” and a partnership to provide computers and Internet access
throughruralchainstores.
ThefarmerPC,adaptedtomeetthelowcostsandsimpleneedsoffarmers,isbuilt
locally in a joint venture with two local companies. Research on farmer needs is
conducted in partnership with the Ministry of Information Industry. The rural chain
storeprojectisdoneinpartnershipwithlocalprovidersanddeliversICT,training,and
information services to farmers through standardized stores in several provinces
(discussed further in the next section). In addition, Microsoft has supported not only
the creation of 30 community technology learning centers, working with
nongovernmental organizations (NGOs) and sometimes local governments in 14
provinces and conducting outreach to disadvantaged groups, also rural computing
initiatives.InXinjiang,Microsoftprovideddigitalliteracycontentandtraininginlibraries
andInternetCafesacrossthearea.2Althoughthesepilotsarerelativelysmall,theyhavethe
potentialofprovidingopportunitiesforR&Dandaccesstoglobalbestpractices.
Nongovernmental organizations and professional cooperatives

NGOs take bottomup approaches to rural informatization, typically targeting the
poorest rural areas. For example, the Poverty Alleviation and Development
Association of China launched the Village Net Project in December 2006, and has
already set up three pilot projects in Yanggao County of Shanxi Province, a typical
underdeveloped agricultural production area; Wuyishan City of Fujian Province,
whichhasrepresentedthecountylevelcitywithfeaturedeconomy;andPengjieTown
inTaizhouCityofZhejiangProvince,whichistherepresentativeofmoredeveloped
areas.
Organizational Models for Rural Informatization

Agrowingnumberofpilotprojectshaveemergedinrecentyearsunderthedirection
oftheactorsnotedabove—workingindividuallyorinpartnershipwithothermembers
engaged in rural ICT development efforts—to address the problems of rural
informatization in China using innovative service offerings and business models. Key
elementsofthebusinessmodelsforthesepilotprojectsaredescribedinTable3.2.See
alsoFigure3.1.

Table 3.2. Rural Informatization Problems and Attempted Solutions

Problem Attempted Solutions
Poor residents and limited affordability of ICT Shared usage and service access points such as
access telecenters—for example, information stations that serve
large numbers of potential users at low or no access cost
Limited sustainability of funding and excess Diversified funding, with a mix of government, private
reliance on government support sector, telecom carrier, and other sources
Low ICT penetration Varied connectivity options to address last mile needs and
user preferences
Unmet local information needs (such as Efforts to develop and integrate domestic and international
agricultural information for farmers, education information resources, improve information gathering
for youth, and health care guidance) channels, and increase timely content supply
Poor maintenance of ICT initiatives, limiting Better operation, management and maintenance
their sustainability
Limited ICT skills, experience or awareness Public awareness initiatives and efforts to generate
community acceptance—for example, through information
agents and training of information service teams to form
rural information service networks and extend coverage of
information services to grassroots levels
Inadequate efforts to tailor initiatives to user Efforts to collect user feedback and evaluations of initiatives
needs, often top-down in nature to make offerings more relevant

Figure 3.1. Key Elements of Rural Informatization Pilot Initiatives
- ADSL Broadband
- Satellite
- SMS, voice (call center)
- Telecom/computing bundle
Connectivity
- Government - Government generated
- Telecom carriers Funding Content and aggregated
- Private sector Supply - Information Services Vendor
Shared - Locally/user generated
- PPPs Usage
Access
Points Community - Local intermediaries
Feedback &
- End user surveys Acceptance - Information agents
Evaluation
- Impact evaluations - Training programs
Management &
Operation
- Entrepreneurs
- Government staff
- Professional cooperatives

These rural informatization pilots range from fully governmentinitiated and
financedinitiativestothoseinvolvingpartnershipswithschools,culturalcenters,and
rural cooperatives. A sample of 18 pilots spanning provinces across China has been
analyzed in some depth (Appendix 2), within a framework that encompasses the
elements mentioned above. The discussion that follows provides an overview of the
variousorganizationalmodelsfortheseprojects.

Government-led model
Thismodelaimstoimproveinformationandserviceaccessamongruralconsumers
andimprovetheconditionofruralfarmers.Inrecentyears,asprovinceshavebegun
to attach more importance to informatization, local governments have set up public
access points to expand information and service access among rural consumers and
raise the living standards of rural farmers. Most of these centers provide the basic
requirements of Internet public access points—that is, a house, a computer, a special
line linked to the Internet, and management and service systems. In addition,
information services targeted at rural consumers are being developed and offered
throughtheseaccesspoints.

Box 3.1. Government Model
Business Model Breakdown Example: Ningxia Provincial Government

1. Funding: Ningxia’s provincial government plans to finish
x Capital: Fully government financed building information service stations in its 2,332
x Operating: Government-subsidized administrative villages by August 2008. Key
free access, with fees levied for features of Ningxia’s rural informatization
some entertainment services construction include the sharing and integration
2. Connectivity: Basic Internet, with some of resources. Ningxia has established a unified
projects offering call center advisory provincial platform that combines into one
services and SMS services targeted at agricultural information services, tele-education
farmers as well. services, National Cultural Information
3. Content supply: Generated and Resources, digital libraries, rural television
aggregated by government agencies. networks, and other network service
Projects offer a range of information applications. To avoid redundant investments,
services targeted at rural consumers, all the service terminals are integrated in the
usually rural farmers, as well as distance new rural information service stations.
education offerings.
4. Management and operations: Stations Ningxia addresses funding and economies of
are usually staffed with one or two full- scale issues by using government guidance and
time or part-time assistants. society participation, and by replacing subsidies
5. Community acceptance: Rural with awards. Since September 2007 the
information agents are recruited and province’s rural informatization services have
trained to encourage use of ICT released more than 10,000 pieces of
resources (the Ministry of Agriculture information on supply and demand for
has trained 200,000 such agents). agricultural products. And the network has
6. Feedback and evaluation: No feedback made more than 80 million RMB in online sales
or evaluation. of agricultural products, offered 3,000 sessions
of Internet films for farmers, and 2,500 sessions
of Internet training for Party members.
Overall Assessment
Strengths Weaknesses
x Links to other public programs, x Sustainability—depends on public funding
information resources x Slow response to diverse contexts and
x Public good, development focus opportunities
x Reaches the poor and targets the x Weak incentives for quality service and
broadest swath of rural consumers accountability. No monitoring and
x Invests in community acceptance and evaluation
capacity building x Duplication among departments
x Market distortions from subsidies

Telecommunications provider model

This model aims to develop new users of telecommunication services in less
saturatedruralareas.EveryChinesetelecommunicationsfirmhasinitiatedprograms
to construct rural public access points that, in many cases, include information and
service offerings. This model involves government partnerships in terms of financing
andgeneralsupport,becauseinsomecasesthelocationsofvillageinformationservice
stations are determined by local governments, telecommunication companies, and
village committees—using existing buildings of village committees and other public
placesasmuchaspossible.

Box 3.2. Telecommunications Provider Model
Business Model Breakdown Examples:

1. Funding: x China Telecom piloted projects in Anhui,
x Capital: Telecom carrier Jiangxi, and Zhejiang provinces and has
x Operating: Carrier-financed launched a nationwide informatization
operating costs; free broadband demonstration project to build 1,000
access from local governments; fee- township-level and 10,000 village-level
based entertainment services information demonstration pilots.
2. Connectivity: Basic Internet, ADSL x China Unicom has created new
broadband. agricultural information workstations.
3. Content supply: Provided by telecom x China Mobile has set up agricultural
carrier directly or in some cases through information and communication service
hired information services vendor. stations and will further enhance its rural
Carriers cooperate with others in the information network. It has invested 350
information service chain to develop million RMB to build the rural information
relevant information websites for farmers, network, and by 2009 plans to invest
connect with experts, and so on. another 450 million RMB to increase the
4. Management and operations: Staff at functions and operation-supporting ability
these service stations are also of the platform and improve services for
telecommunications business agents, and China’s 800 million farmers.
receive fees or other incentives from
telecom providers.
5. Community acceptance: Staffed service
points to help new and non-users; training
offered.
6. Feedback and evaluation: No feedback
or evaluation.
Overall Assessment
x Expands telecom services in underserved x Smaller development impact—limited
areas efforts to provide relevant content.
x Government partnership, with subsidy x Limited community buy-in and no
only for free broadband access evaluation mechanism.

Professional association/cooperative model

This model aims to improve rural production and the rural supply chain for
agricultural commodities. Given their small scale and high vulnerability, farmer
householdsfacemanydifficultiesinproducingandmarketingtheirproducts.Thusit
is inevitable for scattered farmers under the market economic system to organize
themselves to face market risks together. An important organizational form is a
farmers’ professional cooperative or association, which plays an active role in
agricultural and rural informatization. Some professional cooperatives are now
equippedwithcomputersandofferInternetservices.Farmerswhopayamembership
feegetaccesstotheInternetandreceiveinformationservicesandtechnicaltraining.

Box 3.3. Professional Association/Cooperative Model
Business Model Breakdown Example: Panggezhuang Watermelon

1. Funding: Professional Cooperative, Daxing District,
x Capital: Government subsidy Beijing
x Operating: Membership fees, shares The Panggezhuang Watermelon Production
of profits and Marketing Cooperative was set up as early
2. Connectivity: Basic Internet, SMS, and as 1997, but now utilizes modern ICT to
voice services organize farmer households to produce
3. Content supply: Developed and watermelon according to orders. The
maintained by association staff, targeting cooperative relies on an internal management
specific member information needs. information system, product tracking system,
4. Management and operations: and production and implementation system to
Professional association management more efficiently plant and produce the
5. Community acceptance: Niche target necessary quantity of watermelon. It also has a
audience of cooperative farmers; training computer classroom through which it offers
also offered. agricultural training. The cooperative has also
6. Feedback and evaluation: Service explored effective ways of increasing
enhancements based on user feedback. production, such as through agricultural
messages and diaries, quality tracking, and so
on. The cooperative plays an important role in
leading farmers to the market and increasing
their revenue.
Overall Assessment
x High potential impact on targeted users x Targets a niche audience of users, which
(cooperative farmers); community limits its development impact on the
centered broader range of rural citizens with more
x Operators have a strong incentive to diverse information needs
maintain and improve services because
they are dependent on member fees
x Mobilizes local resources and local
content

Franchise/entrepreneurial model
This model promotes standardized “chain stores” with basic information services
and encourages entrepreneurship among rural citizens. Local entrepreneurs can
establish information center franchises or “farmer shops” with investment support
fromlocalgovernments,privatefirms,and/ortelecomproviders,equippingthemwith
computers, printers, copiers, scanners, and other technology that enables residents to
accessneededinformationandservices.

Box 3.4. Franchise/Entrepreneurial Model
Business Model Breakdown Example: Intel, Sichuan Telecom, and

1. Funding: Ministry of Commerce
x Capital: Government subsidy for the The franchise model has been used under the
standardization of farmer shops and Ministry of Commerce’s Thousand Villages
for the purchase of computers and Market Project, an initiative that brought
broadband access. Telecom together a private sector actor (Intel) and a
providers, rural credit cooperatives, telecom carrier (Sichuan Telecom). To combat
and local agricultural associations obstacles related to costs, connections,
often provide combined loans to computer literacy, and lack of content and
farmers to cover the costs of application, Intel and Sichuan Telecom
computers. encouraged manufacturers to develop low-cost
x Operating: Commercial fees, store computers that could still meet farmers’ needs.
sales. These computers provided all needed
2. Connectivity: ADSL broadband or functions as well as built-in ADSL ports, multi-
telecom bundle that includes hardware, software platforms, and user-friendly features.
broadband, and software systems. Farmers could post advertisements, track
3. Content supply: From packaged telecom market information, and search for information
bundle maintained by information services about issues such as plant growing and pest
vendor. control. The all-in-one package from Sichuan
4. Management and operations: Franchise Telecom cost chain store owners a one-time
owner. fee of 800 RMB and a monthly fee of 80 RMB
5. Community acceptance: Staffed service over a three-year contract term. In addition,
points also offer training. Telecom bundle Sichuan Telecom introduced a leasing
often has a television output through company to subsidize computer terminals,
which information and entertainment which was a great help in getting the project
programs are broadcast to villagers. started. In less than a year Sichuan Telecom
6. Feedback and evaluation: Limited has installed more than 5,000 computers.
feedback and evaluation.
Overall Assessment
x Exploits economies of scope and scale— x Dependent on franchise financial
has a network effect, with one-farmer resources for startup, and franchiser
store encouraging several more, orientation and capacity to train
generating a rural information network at franchisees
the grassroots level. x May require startup subsidies
x High sustainability
x Encourages innovation and diversification
of services

Private sector model: informatization experience centers

This model aims to develop the rural ICT market while fulfilling corporate and
socialresponsibilityrequirements.Tosupportthesegoals,somedomesticenterprises
actively participate in agricultural informatization pilots. A typical initiative is the
informatization experience center set up in Guangdong in 2003, when the province
launched a fiveyear informatization project in its mountain areas. The government
invested 35 million RMB a year to promote the informatization development of 51
mountain counties. From the start the project relied on the marketbased model of
publicprivate cooperation and used the informatization experience centers as vehicles
to attract strong enterprises to participate in this project together. The project has
attractedenterprisessuchasChinaTelecom,Lenovo,andTCL.Today60percentofthe
informatization experience centers in Guangdong’s towns and villages use the public
privatecooperationmodel.

Box 3.5. Private Sector Model
Business Model Breakdown Example: Lenovo’s Informatization
1. Funding: Experience Centers in Guangdong
x Capital: Private In 2007 Lenovo signed an agreement with the
x Operating: Partial government Information Industry Department of Guangdong
subsidy, in some cases for broadband province to build up 300 county- and town-level
costs; store sales and after-sales rural informatization experience centers and
services of computer products stations, train 50,000 rural information
2. Connectivity: Basic Internet assistants and farmers over the next three
3. Content supply: Various rural information years, enhance the information knowledge of
services—not limited to specific content. local farmers, and popularize rural
4. Management and operations: informatization applications. Lenovo will design,
Professional store management. develop, and produce computer terminals and
5. Community acceptance: Free products to satisfy rural demands, set up
informatization training services may be corresponding applications, and offer services
offered to improve acceptance. to farmers. In addition, it will build 300
6. Feedback and evaluation: No apparent informatization experience centers in
feedback or evaluation. Guangdong that offer one-stop information
services. Lenovo will also open 500 shops of its
own in Guangdong to publicize and provide
services and to offer training, experience, and
other services to farmers together with the
province’s Information Industry Department.
Finally, Lenovo will strengthen the commercial
networks of villages and small towns, initially
building about 500 sales agents in Guangdong
and then delivering after-sale services to
10,000–30,000 administrative villages.
Overall Assessment
x No or limited financial burden on public x The development impact and sustainability
sector of such service centers is uncertain
x Improved accountability x Weak links to other government services
x Demonstration effects and databases
x Innovate new services and businesses x Limited reach to the poorest rural people
x Facilitates moving to value added services and regions
such as e-commerce and microfinance x Sole focus on commercial services

Notes

1
ChinaTelecom,ChinaNetcom,ChinaMobile,ChinaUnicom,ChinaRailcom,andChina
Satcom.
2
http://www.microsoft.com/presspass/features/2008/may08/0529upchina.mspx.

CHAPTER4
Lessonsfrom
InternationalExperiences
S haredaccesspointshavebecomethedominantmodelforprovidingICTservicesto
poorruralpeopleindevelopingcountries.Effortstocreatesharedaccesscentersare
evolvingintoaninternationalmovement—oneofparticularimportanceandrelevance
totheconditionsindevelopingcountries.Therehavebeensomesuccessesatthepilot
level but many failures in scaling up these centers, broadening their impact, and
achievingsustainability.
Many countries, developing and developed, are facing common challenges with
shared access points and experimenting with multiple business models in search of
longtermimpactandsustainability,particularlyinpoorandruralareas.Forexample,
Canadadevelopedpublicaccesspointsearlyon,reflectingitsextensiveruralareasand
commitment to avoid a digital divide. Brazil, India, and many other developing
countries with large rural populations and diverse territories have also pursued
multipurpose programs to deliver both government and private services over the
Internetandsharedpublic accesspoints. Chinacanlearn muchfromtheseefforts.In
turn, China’s experiences can be captured and shared with the international
community.
Government- and Donor-driven Initiatives and Sustainability

International experiences indicate that sustainability remains a key concern in shared
access initiatives, particularly for governmentled models. Most public centers that
werelaunchedinthefirstwaveofgovernmentanddonordriveninitiativeshavenot
been financially sustainable without ongoing government or external funding. This
many not be a problem if public support is affordable and justifiable in terms of
developmentpriorities,andifinstitutionalandsocialsustainabilityaresecured.These
shared access centers can be viewed as a public good—like education, health, and
water and transportation systems—and may have legitimate claim for continuous
governmentordonorsupport(seeBox4.1).
22
Box 4.1. Public Programs of Access Centers in Chile
Chile is a vast land of great geographical diversity. Most of Chile’s 16 million inhabitants live in cities
like the capital, Santiago, but a significant percentage live in remote rural regions with little access to
the outside world. In the past 10 years, three different public programs have been implemented. A
network of 70–80 youth telecenters was established. Infocenters (“nfocentros”) run by micro-
entrepreneurs were established throughout the country. Those that are still running often belong to civil
society networks such as the Asociacíon de Telecentros Activos de Chile (ATACH), demonstrating the
importance of networking among telecenter operators. The latest government project, “200 Barrios,” is
also going to be implemented through ATACH.
BiblioRedes, funded in part by a grant from the Bill and Melinda Gates Foundation (from 2002 to 2005)
and in part by Chile’s municipal governments, is perhaps the most successful of the three. The main
objective of this project is to give Chile’s residents—70 percent of whom did not know how to use a
computer in 2002—the technology access and skills they need to succeed in the new digital world.
In just a few years, BiblioRedes has made remarkable progress toward that vision. Between 2002 and
2005, the project established more than 370 Internet access points with more than 2,000 public access
computers in municipal libraries and provided computer literacy training to more than 200,000 people.
During the first year of operation alone, library use increased 53 percent among adults and 28 percent
among children. The users felt that they had greater access to useful information that improved their
daily lives. Most importantly, the project has enabled residents of remote communities to connect and
communicate with the outside world.
How Chileans say BiblioRedes has affected them
They have greater access to 88%

computers and the Internet now.
Computers and Internet access
will help them in their daily lives. 78%
They are more informed than

they were before. 77%
Computers will improve the

96%
quality of life for all Chileans.
The rollout of information technology to Chile’s public libraries was not without its challenges. Due to
the extreme geographical isolation of some libraries, the project had to install satellite Internet
connections in one third of the libraries. Perhaps the biggest challenge was the huge discrepancy in
connectivity costs among various communities. Unfortunately, the poorest communities often had the
highest costs. This challenge was overcome with the creation of a national Digital Equity Fund to
subsidize the cost of Internet connections in poorer communities.
There was also understandable fear among many Chileans about using technology for the first time.
The BiblioRedes project overcame this fear with creative communications and outreach programs. The
project also focused on delivering high-quality training. Training materials were provided to all libraries
and a Help Desk to provide technical support to library staff via a toll-free telephone hotline, e-mail, or
instant messaging was established. The project also developed guides and Web site courses for users
who wanted to learn at their own pace. The free computer training resources have been invaluable.
Beneficiaries included users who were in their 80s and finished their first computer course through this
project.
Starting in 2006, BiblioRedes became an established government program, which means its budget is
entirely financed with government funds. Various Chilean municipalities have been motivated by the
achievements of the BiblioRedes project to make additional investments in their public libraries. Many
libraries are renovating, moving to new buildings, and hiring new staff—all enticements to draw in more
patrons. BiblioRedes also has received funding from private institutions and enterprises to carry out
specific projects.
Source: http://connection.aed.org/main.htm; Bill and Melinda Gates Foundation, 2008; authors’ analysis.

The challenge with the public goods approach is that there are no implicit
mechanismsconnectingthesupplyandqualityofservicestocommunitydemand;and
it is often used as an excuse for poor management and planning. Without financial
incentives to perform well, management of public access centers can become
unresponsive to community needs. Subsidized centers may also create market
distortions and prevent commercial enterprises from entering the field. Furthermore,
beyondtheinitialcapitalinvestment,therearesignificantongoingoperationalcoststo
maintain public internet access, including connectivity, maintenance, training, and
periodic hardware and software upgrades. Thus many countries have recently opted
forincreasedprivatesectorparticipationindevelopmentofsharedaccesscenters.
Private Sector Participation

Innovative mechanisms can encourage private sector participation and improve the
sustainability of access initiatives. For example, governments can raise money to
develop public access centers by creating universal access funds that channel a
percentage of income from telecommunications operators. Some Latin American
governments have narrowed the access gap by providing “smart subsidies” to
privately owned telecenters using this approach. Because the level of demand for
telecenter services in rural and disadvantaged communities is often lower than that
requiredforfinancialsustainability,smartsubsidiesaimtocoverthedifferencewhile
still encouraging private investment, competition, and entrepreneurship in service
provision.
Underthisscenariothegovernmentspecifiesminimumservicerequirementsfora
certainperiodandallocatesthesubsidytothelowestbidder.Actualdisbursement of
thesubsidyislinkedtopredefinedperformanceindicators.Smartsubsidieshavebeen
demonstratedasacosteffectivewayofencouragingprovisionofbasicICTservicesin
disadvantaged communities. For example, Canada’s community access program
helped establish 8,000 telecenters by mobilizing civil society and awarding grants to
telecenterinitiativesledbyNGOsthatagreedtoprovidecertainlevelsofserviceandto
matchgrantfundingwithlocalresources(Proenza2002).
Private sector models for rural ICT development can benefit from government
involvement—especiallyintermsofbuildingthecapacityofthepublicaccesscenters,
manyofwhichlackcustomerserviceandmarketingexperiencesuitedtotheneedsof
poorruralpeople.Thestatecanalsoprovidecostsharing,relevantcontent,channelits
services through the centers, and stimulate the development of Internet content
providers. The centers in the Akshaya project in Kerala each took on approximately
1,000learnersandcollectedtheequivalentofUS$3.26perlearnerforprovidingabasic
computer course developed by the state’s IT mission. The local government covered
part of the cost (US$2.79), as did the learners (US$0.47). In about a year, the private
entrepreneurs had recovered their initial investment. Subsequently eGovernment
serviceshavebeencontributingtopartoftherevenuesforprivateoperators.
Still,publicaccesscentersshouldbefreetochangetheirservicepackagesbeyond
theminimumagreedrequirementsforsmartsubsidies.Butthecommercialmodelhas
itsdownside:itoftenfocusesoncommercialservicesandtendstohavelimitedsocial
anddevelopmentimpacts.ICTeducationandvocationaltraining,ehealth,andsimilar
services may have low commercial appeal for entrepreneurs in poor regions. One of

the biggest challenges for the commercial model is to find an ownership and
management structure with the benefits of both worlds—the social impact and
developmentfocusofthegovernmentorNGO,andtheflexibilityandfinancialviability.
The Appeal of the Franchise Model

Franchiseapproachesappearmostpromisingforaugmentingthesustainabilityofthe
government and NGOled model, as well as the development impact of the
commercial model. In this approach the umbrella organization or support institution
(franchiser) may be a public or private organization or a publicprivate partnership.
The franchiser’s role is to set standards for technology and services. Franchisees—
private companies or community organizations operating public access centers—
complywiththosestandardsaspartoftheirlicensingagreementswiththefranchiser.
Support from the franchiser can take many forms, including training, content, and
service development, technical support, special telecommunications access rates, and
revenuesharingarrangementsforprovisionofegovernmentandebusinessservices.
Forpublicledfranchiseprograms,thissupportmaybeintheformofsmartsubsidies.
TheCommitteeforDemocratizationofInformationTechnology,aBrazilianNGO,
has pioneered a social franchise approach to provide access to ICT and develop
marketableskillsandcommunityleadersamongpoorurbanyouth.Thecommittee—
which obtains financing from partnerships with the government and the private
sector—works with communities to develop information technology and citizenship
schools that are managed by community members and focuses on ICT themes
important to the community. The committee provides schools with necessary startup
resources,butschoolsmustgenerateresourcestosustaintheiractivitiesthroughfees.
Thisisessentiallyasocialfranchisemodelthattargetsdisadvantagedurbanyouth,and
hasproventobereplicable.
EChoupal is an interesting example of a privateled franchise model that has
createdavastnetworkofruralkiosksreaching3.5millionfarmersin31,000villagesin
sixIndianstates.Itprovidesaccesstoagriculturalinformation,aggregatesdemandfor
farminputs,helpssellproducefromfarmers’doorsteps,andreducestransactioncosts
andwastefulintermediationtofarmers,amongotherachievements(Box4.2).

Box 4.2. E-Choupal: An Evolving Infrastructure for Rural Transformation
Agriculture accounts for the livelihoods of 66 percent of India’s population and 23 percent of GDP,
and most of the country’s poor people live in rural areas. Any remedy to opportunity asymmetries
must provide farmers with both knowledge of opportunities and abilities to pursue them. The e-
Choupal initiative began by deploying ICT to reengineer procurement of soya—a fundamental
source of Indian diet and food security—from rural India.
Before e-Choupal was introduced, most marketing of produce went through traders and
government-mandated marketplaces controlled by brokers or commission agents. These agents
controlled inbound logistics, information on sale pricing and timing, inspection and grading
processes, auction practices, bagging and weighing, and, ultimately, payments and outbound
logistics. Every step in the marketing system involved inefficiencies, inequities, and information
asymmetries between farmers, intermediaries, and buyers. The market was created, manipulated,
and managed by the agents.
(Box continues on next page)


Box 4.2 (continued)
This setup led the Indian Tobacco Company (ITC)—a multibillion-dollar firm with a diversified
presence in commodities, agribusiness, and agricultural trade—to reengineer the entire value
chain by deploying e-Choupal. The initiative enabled the company to break agents’ stranglehold
over the process and communicate directly with farmers, extract value chain efficiencies, improve
risk management, and leverage ICT to maintain international competitiveness.
E-Choupals were created to act as e-commerce hubs and social gathering places. Each has just
one computer with an Internet connection and is located in selected villages to minimize travel
distances for farmers and maximize traffic to the center. Each is coordinated by a local farmer
recruited from the community served. The Indian Tobacco Company selects each coordinator
based on criteria that engender village trust and trains him in basic business skills. The
coordinator (farmer) receives a commission for every transaction processed through the local e-
Choupal. At the same time, the old commission agents have been co-opted into the new system
by allowing them to profit from value-added logistical services.
Virtual vertical integration is served by continuous flows of information between e-Choupals and
the Indian Tobacco Company—initiated by the local coordinators. The company keeps revenue
flowing through e-Choupals by intelligently sequencing purchases of produce and sales of
agricultural inputs year-round.
The e-Choupal process has transformed the traditional system, providing substantial gains to
both farmers and the firm. It allows farmers to access nearby information outlets, as well as
external pricing indicators and global trends. It also introduces efficiencies and transparencies in
weighing and transaction durations. In addition, the Indian Tobacco Company gains in
disintermediation savings, quality control, risk management, and long-term supplier relationships
with its farmers.
The e-Choupal model provides inaccessible villages with windows to the world, with broad social
impact. It provides access to a system for large-scale, low-cost dissemination of knowledge. Its
website provides weather information at the district level and agricultural best practices from
agricultural research centers and universities. In addition, the ITC conducts lab testing and
provides customized feedback to farmers on how to improve the quality and yield of their crops.
Moreover, children are using computers for schoolwork and villagers are accessing global
knowledge on agriculture.
E-Choupal has enabled farmers to become sources of innovation, deriving products and services
that the Indian Tobacco Company can use to improve their operations. E-Choupal also provides
an alternative channel for the distribution of goods and services in rural India—providing an ICT
infrastructure that the company can use to enhance customer knowledge, market intelligence,
cross-selling, and business decision making. The Indian Tobacco Company proposes to partner
with financial institutions to improve access to credit by monitoring credit risks, reducing
transaction and administrative costs in servicing rural markets, and tailoring financial products to
rural India.
Future generations of e-Choupals are expected to evolve into a two-way exchange of goods and
services between rural India and the world. One wave is to move to higher-value crops such as
wheat, where the grade of the grain determines its end use and price premium. A second wave
will cover perishables and address food safety concerns, because the Indian Tobacco Company
can set standards and trace quality and so command traceability premiums. A further wave would
bring knowledge of customers and of the business, company-deployed infrastructure, and an
organization of processes and partners, to deliver value-added services to rural India. An
ambitious vision would extend to sourcing IT-enabled services from rural India—such as
telemedicine, ecotourism, and traditional crafts.
Source: Adapted from Prahalad 2005, pp. 319–357.

Transnational franchise models are also emerging to provide crosscountry

experienceswithfranchises.OneRoofisapioneeringmodelofsuchafranchisestartedin
Mexico,withafocusontheneedsoflowincomeindividuals.Itisanonprofitorganization
thatismovingtoabusinessorforprofitenterprisetosecurescaleandselfsustainability.
OneRoof’sroleistohelplocalpartnersscaleupgoodprogramsandachievegreater
impactinchanginghowessentialservicesaredeliveredtotheworld’sruralpoorpeople.It
develops and shares a delivery platform that provides rural communities with essential
services, including ICT/Internet services, education, financial services, health, energy,
cleanwater,sanitation,agriculturaltechnologies,andemploymentgeneration.
OneRoofcollaborateswithlocalpartnersandlocalcommunitiestosearchforthebest
entrepreneursineachvillagewiththehighestdesireofimprovingthecommunity’s
livesbythepowerofrunningasuccessfulbusiness.Inturn,theiroperatorsand
franchisees,whohavemetrigorouscriteriaforcontent,localquality,andbusiness
integrity,areencouragedtolearnfromtheirclientsandcocreateservices.Theirservice
pricingstrategiesaretailoredtoservethepoor.Theyalsobrokertomobilizefundingso
thatcertainservicescanbepaidfromthirdpartiesorsubsidized.
OneRoof’s overall strategy for making public access centers selfreliant and
financially sustainable is to provide a large variety of products and services. Each of
them should answer local demand at the right quality and price. Within the areas
under the OneRoof model, it is believed that there is plenty of room for new service
development. OneRoof works with companies in codeveloping new market
opportunitiesinruralareas.
OneRoof does not rely on government handouts or subsidies, is covering
operational costs from fees for services, and has been able to scale up in Mexico. It
currentlyhas10storesopenforbusinessinIndia’sTamilNadustate,andexpectedto
extend to other countries. It receives some donations from multinationals and
foundations. Although it is not yet tested everywhere, and still striving for financial
sustainability,itisapromisingmodel.
Another more established transnational franchise example is the Comitê para
Democratização da Informática (Committee for Democratization of Information
Technology, or CDI) in Brazil (see Box 4.3). CDI is a nongovernmental, nonprofit
organization that has pioneered bringing ICT to underprivileged groups in Brazil.
ThroughitsInformationTechnologyandCitizenship(EscoladeInformaticaeCidadania,
or EIC) schools—the first was established in 1995, CDI develops educational and
vocational programs in Brazil and throughout the world to integrate marginalized
groups,especiallychildrenandyouth,intotheircommunities.Themodelhasproven
tobereplicable—atleastundersimilarcircumstances.

Box 4.3. CDI: A Social Franchise Targeting Disadvantaged Urban Youth
CDI obtains financial resources for its projects through partnerships with government and the
private sector and through funding from national and international organizations such as Brazilian
Development Bank (BNDES), Microsoft, Xerox, Exxon, Starmedia Foundation, IBM, AVINA
Foundation, Global Partnerships, and others.
Each EIC is a result of a partnership between CDI and the community, typically via a community
center or some other social organization active in the community. Communities prepare a project
proposal detailing why they want the EIC and how they will use the computers. Setting up a new
CDI requires a community to demonstrate a certain level of organizational readiness, including
links to private sector and other institutions within the community as well as its own resources.
Once a community is selected as a site for an EIC school, CDI helps with the initial organization
of the school (hardware, software, wiring, training, etc.) and provides technical, pedagogical, and
administrative assistance. The community is responsible for EIC management and maintenance.
Each school has a coordinator who maintains contact with CDI and makes sure that the EIC is
well integrated into other community activities. Each school also has two or three teachers who
receive training in basic computer skills and pedagogy and attend periodic staff development
workshops to learn about new tools and discuss common challenges.
CDI provides schools with everything necessary for start-up. Beyond this initial investment, the
EICs must generate resources to sustain their activities. To do this, schools charge US$5–
US$15/month for a three-hour per-week course. Each school is equipped with five computers and
can train 10 students per session, yielding revenues of about US$500–US$800/month. This
amount typically covers EIC expenses. Students who cannot afford to pay can help with EIC
activities (cleaning, maintenance, etc.). EICs offer classes in basic computer skills as well as
some more advanced skills, such as Internet (browsing, e-mail, and web page development),
database development, computer graphics, and hardware maintenance. Training, consisting of
introductory classes and word processing, is also offered to community members outside of
normal school hours. All materials used by CDI integrate computer literacy with other themes
relevant to the community with a focus on democracy and citizenship.
Source: Fillip and Foote 2007.

Currentlythereare840EICSchoolsin19Brazilianstatesandeightcountries(e.g.
Japan, Colombia, Uruguay, and Mexico). It tends to target underprivileged youths in
urbanareas,soitsapplicabilityisyettoseeinmoreruralareasfacingadifferentrange
of challenges. But it could serve as a model for public centers targeting migrants at
townshiplevelinChina.
Hybrid Organizational Models

Inthecontextofscalinguptonationalprograms,coveringabroadrangeofareaswith
varyingereadinessandmarketmaturity,aflexibleapproachormultiplemodelsmay
be needed—as was adopted in the Gyandoot program (see Box 4.4). Many programs
aremovingtoamiddlegroundbetweenpurelycommercialandpurelysubsidizedmodels,
or to hybrid organizational models—social enterprise approaches—that combine social
objectiveswithamarketapproach.Thesocialenterprisemodeltriestobalancesocialneeds
andeconomicrealitiestomaximizebothsustainabilityanddevelopmentimpact.

Box 4.4. Gyandoot Program in India
India’s Gyandoot program is a government-to-citizen service delivery portal and multipurpose

telekiosk that provides ICT-enabled services to poor rural areas. It is a hybrid model involving
significant government leadership, local government involvement, and private sector participation
through local entrepreneurs. There are two organizational models: one led by village committees
and the other by local entrepreneurs. In the village model, committees invest in providing the
physical space and hardware. Kiosk operators are selected from three nominees proposed by the
community. Operators are not paid a salary, but given 10 percent of their earnings to the village.
District councils train nominees. In the entrepreneur model, local entrepreneurs register as
owners, assume all expenses, and pay licensing fees. But the top-down approach used in this
program has led to limited fit of the services offered and limited involvement by NGOs and
community organizations. Services did not attract popular demand among the rural poor, leading
to sustainability problems.
Drishtee, a private sector-led initiative, is trying to scale up Gyandoot to the national level, adding
and adapting services and transforming the model in the process. Drishtee has shown
encouraging results. The main difference may be the more flexible approach to service provision.
Drishtee positions itself not as a rural service provider, but as a platform for integrating and
delivering a wide range of services to Indian villagers. The initiative offers its network platform to
any service provider that wants to market its services in rural India. Intranets between villages
and district centers provide access to various services, including online land records and
registration, applications for income and domicile certificates, market information on cereal crops,
and government health and education benefits.
Source: Fillip and Foote 2007; and authors’ analysis.

Whatever organizational model is chosen, evidence suggests that public access
centersaremosteffectivewhentheyarerunandmanagedbylocalentrepreneursand
communities, as opposed to donors and central government agencies (Proenza 2002).
OnevariationistocombineNGOorgovernmentownershipwiththeprivatesectorin
daytoday management of centers. This organizational model has been used in
Hungariantelecenters,manyofwhichareownedbycivilsocietyorganizations,hosted
by local governments, and operated as private companies (Wormland and Gaspar
2003). The primary role of governments and donors should be to help create an
enabling policy and institutional environment for various models to become
sustainable.

CHAPTER5
ChallengesforRural
InformatizationinChina
Lack of a Coherent Strategy

RuralinformatizationinChinalacksanoverallstrategyandintegratedapproach.Thisis
not surprising given the country’s size and diversity and the need to involve many
stakeholders.Totheircredit,manyministriesandprovinceshavetakenownershipof
the informatization agenda and initiated their own programs. But, lacking a coherent
strategy and coordination mechanisms at the national and provincial levels, these
programsdonotbenefitfromanoverallsenseofprioritiesandthusoptimalallocation
ofresources.Thereareno mechanismstoensurecomplementaritiesandbuildonthe
comparativeadvantagesamongthevariousministries.
Lacking a coherent strategy, centrally funded programs do not take into account
the diverse geographic and socioeconomic conditions of rural China. Varying
geographic conditions in rural areas pose a challenge to uniform standards and
regionalprograms.Thusitisimportanttosegmenttheruralmarketandtakedifferent
implementation approaches for each. For example, the frontier of private investment
covers segments—such as urban high and mediumincome, and increasingly rural
high and mediumincome—that could be attractive for private investment or
innovative privateprivate partnerships (Figure 5.1). At the same time, a national
strategy needs to direct public resources to financially less viable and less attractive
ruralandnearrurallowincomesegments,wherelowpopulationdensity,nonexistent
infrastructure,andlowliteracymaynotresultinfinanciallysustainableprojects.
Weak Coordination across Ministries and Integration at the Provincial Level

Given China’s scale, diversity, and multiplicity of stakeholders, challenges of
duplications and inconsistencies are bound to arise. But the phenomenon of each
ministryoreachprovincedoingthingsitsownwayhasledtoduplicatedeffortsand
wasted resources. Redundant investments and scattered resources raise serious
problems of affordability, sustainability, and scalability. No policy and institutional
mechanismsareinplacetoraiseawareness,overcomeinterdepartmentalrivalries,and
fosterclosecoordinationandcollaborationatanyadministrativelevel.

30

Figure 5.1. Population and Investment Segmentation in China
Income Frontier of private

investment
High
Next
attractive
market for
private
investment
Public investment
and PPP initiatives
Low High
Density /
Remote Rural Near urban Urban network utility

Source:WorldBank2006.

SuccessfulruralICTdevelopmentprogramsrequirecollaborationandpartnership
amongstakeholders.Thusspecificmeasuresareneededtoraiseawareness,overcome
interdepartmental rivalries, foster close collaboration, and provide incentives for
horizontal resource sharing and network integration. A March 2008 government
reorganization—establishing a new Ministry of Industry and Informatization that
incorporates several ICTrelated agencies—aims to eliminate overlapping
responsibilities, improve coordination, and realize economies of scale in this cross
cutting area. Whether the new ministry can achieve these goals will be determined
onlybythepassageoftime.
In addition to centrally driven programs, every province considers rural
informatization a crucial element of local socioeconomic development. Collaboration
practices vary by province. In one province a government department in charge of
monitoring the safety of roads, bridges, and utility infrastructure had to pay another
department a lot of money to acquire electronic maps and management information
system updates. This contrasts with another province where the Department of
Industry and Commerce (in charge of issuing business licenses and registration) and
theTaxBureaudecidedtoshareinformationonregisteredcompanies.Theagreement
led to better enterprise management and increased tax collections. This collaboration
wasbasedongoodrelationshipsbetweenthesetwounits,notaspartofastructured
process established at all levels of government. In addition to the establishment of a
crossfunctionaldepartmenttopromotecollaborativeactions,newpoliciesonaccessto
government and public information are urgently needed to ensure proper sharing of
informationamonggovernmentdepartments,fortheinterestsofthegeneralpublic.

Unsustainable Business Models and Over-reliance on Government Financing

The Chinese government does not want farmers to bear the brunt of the financial
burden required to access needed information. The business models used for
delivering content and services rely heavily on government subsidies. Thus the long
term operations of such services in townships and villages often depend on local
governments’continuedfinancialsupport—anunsustainablefinancialburden.
Various business models need to be explored to support the government’s long
term informatization goals. Government agencies are looking at new models for
providing services, with the goal of providing some support rather than complete
subsidization.Partnershipswithdomesticenterprisesarealsobeingpursued.China’s
large telecom providers are keen to increase their coverage in rural areas as urban
markets reach saturation. An example is Chongqing, where the government signed a
profit sharing agreement giving 40 percent of profits to the telecom carrier and 60
percenttotheDepartmentofAgricultureofChongqing.
Rural informatization initiatives have had a narrow focus, with limited service
offerings focusing primarily on agriculture—undermining their sustainability. Most
informationserviceprovidersprovideonlysingleinformationandlowlevelservices,
which cannot satisfy the practical demands of farmers and directly affect the overall
sustainability of the initiative. There is little acquisition of global knowledge and
experience in providing sustainable, shared access to ICT (as with multipurpose
telecenters)andadaptingthesemodelstoChina’sdiverseruralareas.
Some examples such as Grameen and nLogue (Fillip and Foote 2007) are
enlightening because they leverage existing telecommunications networks and
maximizetheirefficiencybyprovidingawiderangeofservices.Suchpublicandsocial
services make the economic case for deploying ICT networks in rural areas more
possible and compelling. Furthermore, additional services can be delivered that
otherwisewouldnotbepossible(suchasruraleducation).
Maintenanceandoperationofserviceshavealsoprovenproblematic.Manylocal
governments have invested in hardware and equipment projects, but failed to make
adequate arrangements for maintenance. As a result such projects often go to waste.
Similarly, pilots by foreign donors and multinational corporations often suffer from
lackofattentiontoongoingupgradingandmaintenance.Thechallengeistoconsider
the lifecycle of ICT products. If sustainable mechanisms are not in place for regular
upgradingofsystems,initialinvestmentswillbeineffective.
Lack of Demand-Driven, Locally Relevant Information Resources

Content has always been a key challenge in China’s rural informatization efforts.
Though many information resources have been developed in recent years, farmers
oftencannotfindurgentlyneededinformation.Amongthereasons:

ɶ Lack of practical, localized content. There is a lack of relevant, contextualized
information on the Internet for farmers. With no substantive discussions of
local examples, farmers do not believe in abstract solutions and have little
motivationtoadoptthem.

ɶ Limited efforts to assess local needs or to involve stakeholders in participatory
processestodefinetheirinformationneeds.
ɶ Weak capacity for collecting and disseminating information resources and
developingregionspecificandcustomizedinformationservices.
ɶ Informationisdistributedinadisorderlywayandisdifficulttosearch.Thereisno
mechanism for integrating agriculturerelated information resources.
Agricultural information resources are scattered, distributed in every
department,province,city,andevenenterprise.
ɶ Narrowly focused agricultural content, with little diversification to other ICT
enabledruralservicessuchasruraleducationandruralfinance.
ɶ Farmers prefer to get information through information agents or intermediaries,
ratherthanthroughtheirowndirectsearchontheInternet.
ɶ Weak integration of informatization programs with locally driven community
developmentinitiatives.
Low Levels of Public Awareness and Capacity Building

Community acceptance of new technologies needs to be encouraged with capacity
building. The Ministry of Information Industry has implemented several projects to
extendtelephonyinruralareas.Thoughthiswasasimplegoal,theministryfoundthat
people in isolated areas do not have a strong demand for communications and that
theiruseofbasicphoneservicedidnotincrease.Thusthekeychallengesaretoraise
awareness,mobilizedemand,andeducatepotentialbeneficiariesaboutthebenefitsof
telephony—and so ensure adequate returns and maximum impact from such
investments.
Because Internet literacy is often similarly lacking, the Ministry of Information
IndustryhasfocusedondeliveringInternetaccesstoalltowns.Butinsomepoorand
rural areas the Internet is considered a luxury, and efforts are needed to ensure that
users have the training needed to use computers. Such training is more complicated
thantrainingintheuseoftelephony,andhelpsexplainwhynonusersoftheInternet
requiremoreextensiveawarenessandtraining(CNNIC2008).Moreeffectivemeasures
should be made to encourage these nonusers. In addition, grassroots party
administratorsoftendonotfullycomprehendthepotentialbenefitsofinformatization.
Low Internet literacy is a major challenge to deriving tangible benefits and real
impacts from rural informatization programs. Thus programs should include well
designed services, easy to use interfaces, and public access points where professional
helpisavailable.Achievinglongtermsustainabilitywilldependonlocalpartnerships,
handson training of local IT technicians, and services that are in real demand from
farmers and local businesses. Shared access models can aggregate demand for
informationservices.
Awarding telecenter operation rights to local IT technicians—using, for example,
thefranchisemodel—canprovideincentivestolocaltechniciansandentrepreneursto
stay in the area. In addition, training should be developed in partnership with local
governments and NGOs. This approach is particularly suitable in China, where
provincial governments have dedicated informatization departments to perform such
tasks.

Weak Links to Domestic ICT Industry and Research and Development for
Rural Applications
China’s ICT industry is supported by the Ministry of Information Industry and the
MinistryofScienceandTechnology,whichhaveinitiatedafewprojectstoencourage
the development of innovative, localized rural informatization services and products.
More efforts are needed to promote the development of ICT applications tailored to
agricultural and rural development, and to extend IT knowledge to rural areas. The
central government should formulate policies that promote IT use and services for
agriculture, rural areas, and farmers. The Ministry of Information Industry is already
shiftingitsfocusfrombuildinginfrastructuretodevelopingICTapplications.Butitis
still gathering information on best practices in R&D to support rural application and
diffusion.
The lack of maturity in technology offerings limits agricultural transformation.
Althoughtechnologiessuchaswebsitedevelopmentandplatformestablishmenthave
matured; IT for agricultural production is inadequate and unable to transform
traditional agriculture. Yet China is home to a major ICT industry with substantial
technological, export, and competitive capabilities. These capabilities have yet to be
tapped to meet the challenges of modernizing the rural sector. Thus it is essential to
engage the domestic ICT industry, NGOs, and other partners in practical R&D to
modernize agriculture, adapt new technologies to rural conditions, and develop
affordableandsustainablesolutionstoenhancethequalityofrurallife.
Lack of Systematic Learning and Impact Evaluation

As a large and diverse country, China presents a laboratory for innovation and
learning about different business models, technologies, services, and partnerships.
Substantialresourcesarebeinginvestedinruralinformatization,yetevidenceislacking
on how these investments are affecting growth, employment, and poverty reduction.
Mostinitiativesarepiloted,thenscaledupwithoutthebenefitofclearevidenceasto
whether they are achieving their goals. Without common frameworks for monitoring
and evaluation, and institutional mechanisms to promote learning and share
experiences, resources are wasted with similar operational models attempted again
andagain.
Monitoring and evaluation are crucial to coordination, collaboration, learning,
adaptation, and resource sharing. Yet they are often neglected in many countries,
including China. For example, redundancies and waste arising from the lack of a
monitoring and evaluation plan were observed in the Cultural Information Resource
Sharing Project—a nationwide project aimed at scaling up the communications
networkandenrichingnationalnetworkstoshareculturalinformation.Bytheendof
2007 the project had built more than 8,000 subcenters. But misunderstanding of the
project’sgoalsandtheabsenceofaunifiedstandardandimplementationplanresulted
inextensiveredundantconstruction.

CHAPTER6
Recommendations
D evelopingcountriesfacecommonchallengesinprovidingaffordableICTservices
inruralareas.GeographicallysparsepopulationsraisethecostsofrollingoutICT
infrastructure. At the same time, low rural income levels make investments less
attractiveforICTserviceproviders.Asnoted,thescaleanddiversityofChinaandits
ruralpopulationalsoposeuniquechallenges.
Based on this preliminary study of rural informatization development efforts in
China,combinedwithlessonsfromaroundtheworld,thefollowingpriorityareasare
recommendedfordevelopingruralinformatization.
Formulate a Comprehensive and Coherent Strategy

Formulate a coherent strategy for rural informatization that promotes regional
differentiation,resourcesharing,innovation,partnershipsamongministriesandthe
privatesector,andstrengtheningoftheentiresystem.
Chinashoulddrawonitsownrichexperiencesandthoseoftheglobalcommunity
toscaleupandmaximizetheimpactofinformatizationonruraldevelopment.Asafirst
step, China needs to take stock of its experiences and devise a shared vision and
strategyforthenextphase.Suchastrategymaystartbysegmentingtheruralmarket
in terms of ereadiness or connectivity, remoteness, eliteracy, and socioeconomic
development. Levels of subsidies and business models can then be tailored to these
differentiated segments or local environments. The success or failure of various
business models and informatization initiatives depends on the local context, so these
assessmentsareessentialtotailoringnationalprograms,servicemodels,andsubsidies
tothesebroadlydifferentiatedlocalcontexts.
Akeyissuethatthestrategymustaddressistheneedtoreachpoorpeopleinrural
areas. As the State Council Leading Group Office of Poverty Alleviation and
Development acknowledges, rural ICT programs have focused on building basic
infrastructure and bridging the connectivity divide between rural and urban areas.
They have also focused on relatively developed rural areas and those with certain
skills. But using ICT for rural development is not the same as using ICT for poverty
reduction. If poorly designed, rural informatization can even widen the connectivity
divide. Thus the strategy should aim to define basic approaches for reaching remote
regionsandpoorcommunitiesandfarmersthroughtargetedsubsidies,vouchers,low
cost technologies, information intermediaries, community development, and capacity
building.
The proposed strategy should also address enabling policies and governance
mechanisms that encourage joint investments in infrastructure, the development of
35
commondatabasesandgovernmentwideenterprisearchitecture,andissuesofprivacy
andsecuritytopromotetrustinegovernmentservices.Itshoulddefineclearrolesand
responsibilities for central ministries, provincial governments, and other stakeholders
topromotejointinvestmentsinanduseofcommoninformationinfrastructureandto
exploit comparative advantages and complementarities among the various
stakeholders.
Theproposedruralinformatizationstrategyshouldalsotakeintoaccountgrowing
urbanization, particularly the significant migration of rural people from villages to
townships and adjacent cities. This shift will have implications for the locations and
servicesofinformationaccesscenters.Manyoftheclientsofthesecenterswillbeless
sophisticated and may require infomediaries and different mixes of services. These
targetgroupsmayalsorequiretrainingineliteracyandsupportinsearchingforoff
farm employment opportunities. These population and employment shifts and the
corresponding changes in client and service mixes will also have implications for the
sustainabilityandimpactofthedifferentbusinessmodelsadoptedbyaccesscentersin
receiving townships and periurban areas. These implications should be anticipated
andplannedfor.Atthesametime,theinformatizationprogramshouldbeagile,flexible,
and sufficiently decentralized and learningoriented to remain responsive to the
changingruralcontext.
The proposed strategy should also balance current topdown, centrally driven
approaches to rural informatization with bottomup initiatives that promote local
ownership, innovation, adaptation, and learning. It should start with assessments of
local information needs to emphasize the development of demanddriven services. It
shouldensurelearningfromthediversemodels pilotedsofarandbuildonthemost
promising ones. And it should emphasize partnerships with the local ICT industry,
telecommunications operators, community organizations, agriculture extension
services,cooperatives,professionalassociations,academicinstitutions,andthemedia.
Thetownshipistheoptimallevelofintegrationfornationalprograms.Thisisthe
level where bottomup efforts are linked to topdown programs and where capacity
building and monitoring and evaluation can be promoted. The township should
become the locus for coordination, collaboration, local content development, and ICT
integrationwithregionaldevelopmentstrategiesandprograms.
Support Innovative Business Models

Supportinnovativebusinessmodelsforpublicaccessservicecenterstoreducerural
urbangapsanddevelopmoreaffordable,scalable,sustainableapproachestoservice
delivery—drawingonlocalandinternationalexperiences.
Accessisthekeytosuccessfulruralinformatization.PublicfacilitieswithICTaccess
are needed for people without access at home, school, or work—a common
phenomenon in China’s rural areas. Although various ministries have established
manypublicaccesspoints—suchasculturalstations,ruralinformationservicestations,
and informatization experience centers—most are heavily dependent on government
subsidies and are not sustainable. Moreover, rural areas often lack the subscriber
densitytomakeICTdeploymenteconomicallyviablefortheprivatesectortoinveston
itsown.ThemainchallengeisensuringruralICTaccesswithoutimposingafinancial
burdenonpoorpeople.

Important global trends and lessons are accumulating in this area. One trend is
toward moving from purely bottomup pilots and organic models to the use of
programmaticapproachesandintermediaryinstitutionsforscalinguptothestateand
national levels. Countries are also moving from singlepurpose, governmentdriven
modelstopublicprivatepartnerships,multipurposetelecenters,andmultiplebusiness
models. Countries are learning that different models can serve different contexts and
different development needs. In principle, the model follows the purpose. Countries
are also learning how critical monitoring and evaluation are to the effective selection
and use of business and institutional models and to the adaptation or innovation of
these models to fit changing priorities, socioeconomic contexts, and communications
technologies.
A few developing countries have seen the emergence of innovative business
modelsinvolvingpublicprivatepartnerships.Theyuseprivatesectorcontributionsto:

ɶ Providebasicpublicaccessforfreeoralmostfree.
ɶ Generateandmaintainrelevant,demanddrivencontent.
ɶ AdaptICTtoprovideaffordableandmaintainableproducts.
ɶ Providetrainingandcapacitybuildingforruralresidents.

Theseapproaches,amongothers,easetheburdenongovernmenttofullyfinance
suchinitiativesandcanbeadaptedtotheChinesecontext.
InternationalexperiencessuggestthatengagingNGOs,communities,andtargeted
usergroups(suchasruralyouthorwomen)canalsopromotecommunitylearningand
innovationinserviceandbusinessmodels.SomeNGOshaveusedthefranchisemodel
and been able to achieve scale. Some have engaged in community development and
reachedouttothepoorestintheruralareasandothervulnerablegroups.Somehave
partnered with the private sector, ICT multinationals, foundations, and donors. The
national strategy should accommodate these diverse models and encourage local
hybrids.
Consolidate and Share Resources

Consolidate and share information resources and aggregate service offerings to
supportmultipurposeservicecentersandonestopshops.
Manygovernmentprojectshavebeeninitiatedwiththegoalofprovidingneeded
information and services for rural consumers. “Golden” projects that offer access to
keygovernmentservices(tax,registration,payments),coupledwithdistancelearning
and initiatives providing agricultural information, would offer a basket of services
relevant to rural users and encourage the longterm sustainability of service centers.
International experiences indicate that aggregation of services at the access or service
center level may produce sufficient income for these multipurpose centers to become
financiallysustainableinmanyruralcontexts.
Aggregation of government information and services at onestop shops can also
reduce the transaction costs for farmers and rural enterprises when dealing with
variousgovernmentdepartmentsthroughasinglewindow.Suchcentersmayalsobe
abletoprovidecrosssubsidiesbetweenthemostprofitable,highdemandservicesand

newservicesthatmayrequiredemandmobilization,marketdevelopment,orcapacity
buildingforthepoor.
InChinadevelopingsuchcomprehensivepublicserviceplatformsatthetownship
or village levels—to consolidate these government efforts—would be a step toward
betterserviceofferingsandgovernmentcoordination.
Raise Public Awareness and Build Capacity

Raisepublicawarenessandbuildcapacityatalllevels—particularlytheprovincial
level.
Efforts to raise awareness and build capacity building must span many levels:
policymakersandadministratorsofdepartmentssuchastheministriesofagriculture,
commerce, and information industry; provincial decision makers and administrators;
managers, owners, and entrepreneurs of individual service centers; central and local
contentandserviceproviders;ruralcommunitiesandfarmergroups;ruralcommercial
and agriculturerelated enterprises; professional cooperatives of farmers and
professional associations; and ICT technical staff and information intermediaries. The
poorest,mostremoteareasmaybetargetedforspeciallytailoredawarenesscampaigns
andInternetliteracy.
Centermanagersandentrepreneursareattheheartofensuringsustainabilityand
impact through selecting and adapting appropriate services and content, developing
viable business plans, mobilizing resources, developing the market, and building
partnerships with various sources for content and support services. Telecenter
networksaroundtheworldandvariouseducationalinstitutionshavebeendeveloping
trainingprogramstailoredtotheselocalpioneers.Indiahasdevelopedaconsortiumof
partners, including NASSCOM Foundation and WorldCorps, to develop common
training modules covering entrepreneurship, community development, grassroots
marketing,servicedevelopment,andinfomediaryskills.
Capacity building should also cover traditional and potential information
intermediaries.Inruralareaswhereliteracy(includingITliteracy)islow,thegrowing
sophistication of ICT tools and Internet search methods may intimidate users.
Increasingly, ICT intermediaries (or “agents of change”)—such as head farmers,
agriculture product associations, and NGOs—are actively involved in providing
information,explanations,anddemonstrationstoruralpopulations.
Develop Intermediary Institutions and Networks

Develop intermediary institutions and networks to develop local content and
services, train center managers and local entrepreneurs, promote partnerships,
provide technical support for operations and maintenance, and share experiences
andresourcesamongcenters.
Intermediaryorsupportinstitutionscanhelpsupportindividualservicecentersas
well as groups of them to exploit economies of scale and scope. These networks,
associations, and support institutions can offer common services and daytoday
support for business management, technical troubleshooting, product and content
development, and the like. A common thread is that these intermediary institutions
work with the centers to make them more effective, sustainable, and valuable to the

communities they serve. In China such horizontal and grassroots networks have not
been encouraged because most initiatives have been vertical and supply driven, and
localcentershavebeenlookingupwardandnotlocallyorregionallyfordirectionand
support.
LibraryinstitutionssuchastheChinaSocietyforLibraryScienceandtheNational
LibraryofChinaareoneexampleofexistinginstitutionalstructuresthatmightsupport
thedevelopmentandcoordinationofrelevantlocalcontentorprofessionaltrainingfor
telecentermanagerstoserveasinformationintermediaries.
These networks and support institutions can also provide training, mentoring,
support,andcoachingonmanagementissues,andaboutservicesandtechniquesused
inothercenters.Peerlearningandknowledgesharingshouldbeacriticalfeatureofthe
new strategy. These networks can also provide peersupport email lists, onsite
maintenance, and monitoring and evaluation services. Finally, these networks may
provideadvocacyandpolicyrelatedactivities,andthusprovidevaluablefeedbackto
provincial and central policymakers and ongoing support to rural informatization
efforts.
Ensure Learning, Monitoring, and Evaluation

Ensure learning, monitoring, and evaluation mechanisms are integrated in the
programdesignandimplementation.Theirabsencecanresultinmisunderstanding
ofprogramgoalsamongimplementers,pooroutcomes,and,insomecases,failureto
meettheprogramgoals.Effortsshouldbemadetoraiseawarenessandunderstanding
oftheimportanceofmonitoringandevaluation,withrelevantinputfrom,andtraining
provided to, all potential users of the system. The results of evaluation should be
shared broadly among all stakeholders to ensure for learning, accountability, and
sustainability.Itcanbeespeciallyvaluabletosharefailures.
A learning, monitoring, and evaluation culture in which data and information
guide decisionmaking in rural informatization is critical to assessing impact and
sustainability.Inthisculture,usingdatatoinformstrategydevelopmentandsetgoals
and targets is the first step. Tracking progress toward outcomes and impactand
ongoingrefinementandadjustmentofstrategiesandprogramsisthenextimportant
piece. Finally, assessment of the difference that strategies and programs in terms of
their benefits to people and communities, and sharing that learning among
stakeholders,isessentialforefficientandeffectiveinvestmentsininformatizationwith
deepandlongtermimpact.
Thus China’s informatization strategy should invest in learning and research,
monitoring and evaluation, reflection and sharing of knowledge and experiences.
When designing ICT strategies and programs, governments and businesses should
bear in mind that informatization is not the ultimate goal, but an enabling tool for
achieving economic growth and alleviating poverty. Thus it is important for
governmentsandbusinessestodefinethegoalsthatneedtobeachievedaswellasthe
indicators and measures of progress. Otherwise, there is a danger that ICT
development programs could be abandoned once the original hype is over. A
monitoringandevaluationframeworkisproposedinAppendix3toassesstheimpacts
experiencedinpilotinformatizationprojects,andtheirpotentialforscalingup.

CHAPTER7
Conclusions
P roviding public access points for information services is a particularly critical
element for rural informatization. They are needed for people without access at
home,school,orwork.China’sgovernmentshouldconsiderawidescaleprogramthat
would ensure access to relevant information resources and essential services—
includingtrainingandassistance—throughanetworkofpublicfacilities.
Althoughvariousgovernmentministrieshavebuiltupmanypublicaccesspoints
such as cultural stations, rural information service stations, and informatization
“experience” centers through their own projects, most are heavily dependent on
government subsidies and suffer from low sustainability. In addition, rural areas in
China often lack the subscriber density to make ICT deployment economically viable
for private investment. The key issue is how to ensure that rural ICT projects
eventuallygeneratereasonablereturnstocoveratleasttheiroperatingcosts(afterone
offinitialcapitalinvestments).
InnovativebusinessmodelshaveemergedinvolvingPPPsinsomedevelopingand
developed countries. They use private sector contributions to provide basic public
accessforfreeornearlyfree,generateandmaintainrelevant,demanddrivencontent,
adaptICTtoprovideaffordableandmaintainableproducts,andprovidetrainingand
capacitybuildingforruralresidents.Theseapproaches,amongothers,easetheburden
ongovernmentforfullyfinancingsuch initiativesandcanbeadaptedtotheChinese
context.
InternationalexperiencesalsosuggestthatengagingNGOsandlocalcommunities
or targeted user groups (such as women or rural youth) can promote community
learning and innovation in services and business models. Some NGOs have used the
franchise model and been able to achieve scale. Some have engaged in community
developmentandreachedouttothepoorestgroupsinruralareasandothervulnerable
groups. Still others have partnered with the private sector, multinational ICT
organizations, foundations, and aid agencies. China’s rural informatization strategy
shouldaccommodatethesediversemodelsandencouragelocalhybrids.
Many government projects in China have already been initiated with the goal of
providing needed information and services for rural consumers. The Golden projects
offer access to key government services (tax, registration, payments, and so on),
coupled with ongoing distance education and initiatives providing agricultural
information,offeravarietyofservicesrelevanttoruralusers.Aggregatinggovernment
information and services at onestop shops can reduce transaction costs for farmers
andruralenterprises.Suchcentersmayalsobeabletoprovidecrosssubsidiesbetween
themostprofitable,highdemandservicesandnewservicesthatmayrequiredemand
40
mobilization, market development, or capacity building for the poor. In China the
development of such comprehensive public service platforms at the township or
village level would be a step toward improving service offerings and government
coordination.

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Appendixes
Appendix 1. Central Government Strategies and Initiatives for Rural
Informatization
Ministry of Information Industry
Year Strategy/Policy Statements
2006 “Suggestion on Promoting the Construction of the New Socialist Countryside”
Year Key Supporting Initiatives Progress Made
1. Extend Telephone Coverage to x 99.5 percent of administrative villages
Every Village Project have telephone coverage
x Extend telephone coverage to x More than 97 percent of townships
2007
every village and villages have Internet access
x Speed up the construction of village x 92 percent of townships and villages
Internet connections have broadband access
2. Initiative to Promote IT
x “Farmer computers” developed in
Applications in Agriculture
collaboration with Haier and Intel.
x Guide the ICT industry in
x National organization of computer and
2001- developing appropriate agricultural
IT application “multiplier plan” resulted
2005 IT products and systems to serve
in 113 agriculture-related projects with
“three-dimensional rural issues” (i.e
total investment of around 1.7 billion
farmers, countryside and
RMB. Direct economic benefit was
agriculture) and promote
more than 110 billion RMB
agricultural modernization
3. Rural Comprehensive Agriculture x The pilot projects in Anhui Province
Informatization Services Pilot yielded substantial economic impacts.
Projects x Xuanzhou District built a
x Develop affordable, easy to use comprehensive information platform
information terminals and that provides timely agricultural
corresponding information systems information to prevent the paddy rice
for farmers disease-carrying insect, saving 22,000
x Integrate information resources of tons of food and 1,400 tons of cotton.
agriculture-related departments, x Jingde County stabilized the poultry
scientific research institutes, and production during SARS by
colleges to develop “three- disseminating useful information
2005 dimensional rural issues” related to through TV broadcasting after
local information receiving inquiry telephone calls at
x Form a market mechanism for rural the information center. New
comprehensive information agricultural technologies, also
services involving domestic broadcast on TV increased annual
enterprises farmer income by 3.1 million yuan.
x Provide training and promote the
application of informatization in http://www.tzag.gov.cn/documents/
rural areas docdetail.asp?documentid=134382&
sub_menuid=101
http://www.mxwz.com/yxcz/inside.aspx?xl
=%B4%F3%C1%AC&NewsId=100041
45
Ministry of Agriculture
Overall Framework of National Agriculture and Rural Informatization (2007–2015)
x Greatly improve agricultural and rural integrated information infrastructure management
2007 x Develop information service organizations at township and village levels
x Complete a sustainable development mechanism for agricultural and rural
informatization, to meet the needs of modern agriculture and the construction of a
new socialist countryside
10th Five-Year Plan: Action of Rural Market Information Service1
x Enlarge the rural market information dissemination dynamics by providing timely and
accurate information to the farmers in all levels (province, city, county, major villages)
x Establish the rural information service platform
2001
x Set up interactive Intranet and website to stimulate comprehensive information
exchange among all stakeholders (province, city, county, village, etc.)
x Strengthen the capacity of the rural information services by providing the
adequate training
1. Pilot Projects: Overall Framework
of National Agriculture and Rural x Listed in local development plans, and
Informatization (2007–2015)2 funding provided by local finance
x Build stations in 100,000 villages, bureaus or self-collected.
providing 1 million village officers and x Ministry of Agriculture is piloting
10 million farmers with Internet access information service stations in all new
2007
x Extend the agricultural information countryside construction demonstration
services network to more than 90 villages.
percent of administrative villages
x Train one or two rural information http://www.gov.cn/ztzl/yzn/content_
assistants in every administrative 479462.htm
village
2. “Jinnong” Project (“Golden” e-
government project)
x Establish three major application
systems, for agriculture monitoring
and warning, agricultural market
information, and rural market service x Construction period of the project is
2007
the technology information services ongoing, from August 2007 to July 2009
x Develop and integrate domestic and
international information resources
x Standardize criteria and regulations;
train information service teams
3. Three in One (Telephone, TV, and
Computer) Agriculture Information
Service Pilot Project
x Extend information services to “the x Ministry of Agriculture provides the
last mile” through computer (Internet equipment, software, and support for
information services), telephone the pilot areas of every province
2005
(advisory call centers), and TV
(local TV broadcasted agricultural x Central government funds 10 million
information programs) RMB a year
x Establish a long-term mechanism to
provide timely, accurate agricultural
information services

4. Demonstration Project for x Formed a network of experts and a

Extending Agricultural Science and technical instruction and service system
Technology to Every Rural Household x Promoted 20 kinds of technologies
2005 x Promote agricultural science and x Provided technical instruction to 92,000
technology to households in 100 demonstration households
pilot counties
x Ministry of Agriculture is using IT to
develop rural economy e-map
5. Rural Market Information Service x Agricultural information service
Action Plan organizations set up in 97 percent of
districts (cities) and 80 percent of
counties
2001–
x Agricultural information service stations
2006
set up in 64 percent of villages and
towns
x More than 200,000 rural information
assistants trained
State Administration of Radio, Film, and Television
1. Extend Telecommunications x Investment for administrative villages
Coverage to Every Village Project totaled 3.6 billion RMB
x Extend telephone coverage to x About 117,000 administrative villages
every village with electricity but no telecom (“blind”
villages) covered
1998-
x About 100,000 natural blind villages with
2006
more than 50 households covered
x 15,000 villages that were “back to the
blind” were repaired
x Provided nearly 100 million farmers with
access to radio and TV
Ministry of Science and Technology
2. “Spark” Agricultural Science and
Technology 110 Information Services
Project (Spark 110) x Set up more than 23 unified regional
x Provide farmers with agriculture hotlines, covering more than 900
technology services through a low- counties and 7,500 towns and
cost ICT platform, based on townships
collaboration between the x Governments in more than 20 provinces
government science and have set up cooperative relations with
technology sector and the local agricultural universities, institutes,
telecommunications sector or research agencies
x Integrate information resources
with a service hotline


Ministry of Culture
1. National Cultural Information x Central authorities have invested
Resources Sharing Project 903million RMB, while local investment
x With Ministry of Finance, digitally totaled more than 700 million RMB.
process and integrate China’s x Resources total about 60 terabytes (1
2002
cultural resources terabyte is equivalent to 250,000 e-
x Share digitized cultural resources books or 926 hour-long videos)
nationwide x 6,700 centers and basic service stops
completed at all levels
2. Comprehensive Culture Station
Project
x The funding has been provided by
x Implemented with State
special project subsidy by the central
Development and Reform
government, as well as funding from
Commission
local finance bureaus, or self collected.
x Sets up rural comprehensive
2006– x In 2007, the central government has
culture stations in all villages and
10 invested 100 million RMB for piloting.
towns countrywide, and trains
cultural laborers
x Develops a sound, effective rural http://www.china.com.cn/culture/zhuanti/0
culture management system 7ggwhfubg/2007-
12/21/content_9416225.htm
x Improves rural public culture
service skills by 2010
Ministry of Education
1. Modern Distance Learning Project
in Rural Primary and Secondary
Schools
x Implemented with State
Development and Reform x By end of 2006, established call centers
Commission and Ministry of to support services in rural primary and
Finance secondary schools
x Covered by local governments and x Improved education quality and
2003 subsidized by central based on contributed to sharing of resources in
regional development rural areas
x Each rural junior high school x More than 100 million students in
equipped with a 30-computer central and western rural areas have
classroom and a multimedia benefited
classroom with CD players and
satellite teaching posts. Each post
needs an average investment of
150,000 RMB.


Ministry of Commerce
1. Rural Commercial Information
Service Project
x The New Countryside Commercial
x Set up rural commercial information
Website was launched in August 2006.
service stations in 10,000 villages
It organized 6 times online trading.
x Train 10,000 farmers to use the About 5 billion tons of agricultural
2006 Internet and improve their ability to products, worth 10.9 billion RMB, were
incorporate supply and demand traded.
information in their business
x Rural commercial information service
x Establish an information resources stations were piloted in one county in
system, with special databases on each of 20 provinces.
agricultural products and
commercial information for farmers
2. Thousands of Villages and
Townships Project
x The project aimed to establish
25,000 “rural shops” from 2005 to
2007 as extensions of the urban x 160,000 “rural shops” and 480
commercial distribution network extensions of urban commercial
2005
(e.g. chain stores and super- distribution network were subsidized by
markets). This modern rural the the government in 2005 and 2006.
information network can improve
rural consumption environment
and meet production and living
demands by rural population.
Central Committee of Communist Party of China
1. 11th Five-Year Plan for National Economic and Social Development
x Proposed strengthening agriculture service systems, promoting agricultural technology,
2006– and building production safety standards. Also proposed integrating agriculture-
2010 related information resources, strengthening construction of the rural economic
information application system, promoting agricultural service organizations and
mechanism innovation, encouraging and guiding farmers in developing specialized
economic cooperatives, and improving the organization of agriculture.
2. Opinions of the Committee and the State Council on Developing Modern
Agriculture and Promoting the Construction of a New Socialist Countryside
2007
x Made clear that informatization is one of the three main goals for agriculture,
along with mechanization and irrigation.
3. 17th National Congress of the Communist Party of China
x Set modernized agriculture and a reinvigorated rural economy as primary tasks.
2007 Proposed to strengthen rural infrastructure, improve rural markets and
agriculture service systems, and promote advances in agriculture-related
science and technology to increase agricultural production capacity.
4.2006–2020, State Informatization Development Strategy
x Proposed to “use the public network with a variety of access methods and
affordable prices for farmers, improve rural network coverage, integrate
2006 agricultural information resources, standardize and complete the public
information intermediary services, build urban-rural information service system in
a concerted manner, provide farmers with the applicable information services
such as market, science and technology, education, health care etc, and
advocate a reasonable and orderly flow of the surplus rural labor.”

5. Opinions of the Committee and the State Council on Promoting the

Construction of a New Socialist Countryside
x “Actively promote the construction of Agriculture Informatization, integrate and
2006 make full use of agriculture-related information resources, strengthen the
information services of radio and television broadcasting and
telecommunications in rural areas and focus on ‘Golden Agriculture’ project and
comprehensive agriculture information service platform construction.”
6. Opinions of the Committee and the State Council on Several Policies
Relating to Intensifying Rural Work and Improving Agricultural Comprehensive
2005 Production Capacity
x “Strengthen the construction of Agriculture Informatization.”
7. Opinions of the Committee and the State Council on Intensifying Rural
2005 Cultural Construction
x “Provide rural digital culture and information services”
1. Modern Distance Learning of x Initiated with pilot experiments in
National Party Cadres in Rural Areas three provinces, it will extend to nine
x Build an information services provinces by 2008. Another 19
platform by 2010 with a batch of provinces will be covered by 2010.
teaching resources for rural party x Provinces have built up 197,320
members and peasants terminal receiving posts in villages
x Build a batch of terminal receiving and towns.
2003–
06 posts, including satellite receiving, x 7,073 IP course-wares delivered. The
broadcast and television IP information channel has sent 53.7
transmission, broadband set-top- billion bytes of information. The
box or P2P transmission, etc. teaching center website has
(Rural party members’ activity published 22,678 pieces of
rooms, rural middle and primary information. The total click rate was
schools, etc are usually built up as around 4.4 million, and the daily visits
receiving posts) were over 6,000.
National Development Reform Commission
2008 Document for Informatization for the New Rural Countryside
1. Pilot Project for Rural
Informatization
x Develop a public service platform
that consolidates different
2008 x Under development
government service offerings
x Through innovative business
models, pilot offerings in two or
three provinces


State Council Leading Group Office of Poverty Alleviation and Development
1. Pilot Project for Rural
Informatization
x Provide agricultural information on
demand; help farmers integrate
with national and global markets x Under development
2008
x Provide training for rural
residents—such as distance
education
x Improve connectivity options, such
as video telephony
Notes

1
http://news.xinhuanet.com/zhengfu/200109/30/content_84489.htm.
2
http://www.agri.gov.cn/jhgb/t20080321_1029943.htm.

Appendix 2. Analysis of Eighteen Pilot Projects in China
Organiza- Government Other Number of Generating Content ICT Technology Public Onsite
Project tional Province Year Agency Institution services relevant Generator/ Training Channels Awareness service
Name Model1 Province Category Initiated Supporter Supported offered2 content? Aggregator3 offered? offered efforts? assistance?
Local
Informatization Information
Experience Industry
Center D Guangdong Eastern 2007 Department Lenovo 3 Y Y Internet Y Y
1000 Towns and

10,000 talents D Gansu Western 2002 2 Y Y Internet
Baima Shop Ministry of
F Sichuan Western Commerce Intel 1 Internet
Farmers Internet China
Café F Shanxi Central Unicom 1 Internet
52
Informatization
Farmer Family Ministry of
Stores F Sichuan Western 2007 Commerce Intel 1 Internet
Local SMS &
Information Agricultural Internet &
Service Station G Shaanxi Western 2006 Department 3 Y G Multimedia Y Y
Rural Information
Service Platform G Sichuan Western Local 4 Y G Y Internet
Local
Rural Information Agricultural Internet &
Service System G Jiling Central Department 1 Y G Voice Y
Community Internet &

Information Court G Shanghai Eastern 2003 Local 4 Y G Y Video
Internet &
Farmer Internet Video &
Bar G Ningxia Western 2007 Local 7 Y G Y Voice Y Y
Chongqing
Hotline G Chongqing Western Local 2 Y G SMS & Voice

Organiza- Government Other Number of Generating Content ICT Technology Public Onsite
Project tional Province Year Agency Institution services relevant Generator/ Training Channels Awareness service
Name Model1 Province Category Initiated Supporter Supported offered2 content? Aggregator3 offered? offered efforts? assistance?
Gansu
E-Family G Gansu Western Local Telecom 1 Y G/U SMS & Voice
Internet &
Jinta Model G Gansu Western Local 1 Y G Print Y
Rural Information Internet &

Agent G Jiangxi Central Local 1 Y G Print Y Y
Panggezhuang
Agri-Products
Cooperative SMS &
P Beijing Eastern Local 4 Y P Y Internet
Agricultural
53
Products Internet &

Association P Gansu Western 3 Y P Print
Henan
Henan Netcom T Henan Central Telecom 5 Y T Internet
Zheijang SMS &
Farmers Mail Box T Zheijang Eastern Local Mobile 4 Y G Internet
Notes:
1OrganizationalModelinclude:D(Domesticprivatesector);F(Franchise);G(Government);P(ProfessionalAssociation/Cooperative);T(TelecomProvider).
2Serviceofferedinclude:EducationalService;EntertainmentService;Agriculturalmarketexpansion&ecommerceservice;Supplymanagementservice(basing
supplyondemand);Rural&agriculturalinformationservice/facilitatingconsultationwithexperts;eGovernmentservice;Employmentgenerationservice;
Additionalcommercialservices(printing,faxing,multimediaservice,purchasing);Training.
3ContentGenerator/Aggregatorinclude:G(Government);P(ProfessionalAssociation);T(TelecomProvider);U(User).

Appendix 3. Impact Evaluation: Rationale, Definitions and Framework for

Rural Informatization Pilots
Rationale
Monitoring and evaluation are essential components of informatization initiatives,
providing needed information to project implementers on a project’s success in
achieving its development goals and alerting them to potential complications in
implementation.
When people evaluate ICTbased services they usually focus on functionality,
access,orusersatisfaction.Thistranslatesintosuchquestionsas“Hasthetechnology
beeninstalledandisitworkingproperly?”;“Isaccesstoelectronicinformationbeing
providedforawiderrangeofpeople?”or“Aredifferentgroupsofpeoplehappywith
theservicetheyaregetting?”
Thesetypesofinformationareusefulbuttheydonottellyou:

ɶ Aretheservicesprovidedmakinganyrealdifferencetotheusers?
ɶ Are the communities changing as a direct or indirect result of the services
provided?
ɶ Is there any difference in the implementing organisation as a result of
providingtheseservices?

Impact evaluation focuses on answering these questions, and can inform key
stakeholders

ɶ Strategistsandpolicymakers:
• IfICTbasedservicescontributetoachievingprogramgoals
• If the services make any real difference to communities and to reducing
poverty
• Iftheservicesprovidevalueformoney
• What can be done, and how, to be more effective in meeting program
goals
• How to make evidencebased decisions about scaling and replicating
programs
ɶ ManagersofICTbasedservices:
• Iftheyaremeetingtheirgoalsandobjectives
• Iftheyaremakingeffectiveuseofresources(time,money,expertise)
• Iftheservicesmakeanyrealdifferencetoindividuals,totheircommunity
ortotheorganisationsprovidingtheservices
• Ifthereareany(goodorbad)consequencesthattheydidnotexpect
• Whattheycandotoimprovehowtheymeettheirgoalsandobjectives
• Evidenceforadvocacytoengagesupportfromkeystakeholders.

ɶ ProvidersofICTbasedservice:
• Iftheyaremeetingtheirobjectives
• Iftheyneedtoadaptoradjustwhattheyareprovidingandhow

• Iftheservicemakesanyrealdifferencetousers
• Whattheycandotoimproveanddeveloptheservice

Impactplanningandassessmentshouldbeanintegralpartofanyprogramwitha
goalofsocialchange.Withoutit,programsruntheriskofengaginginlotsofactivity
andprovidingnewserviceswithoutmakingadifferencetopeople’slives.
Definitions
Impact—canbedefinedasanyeffectofaservice/projectorinitiativeonanindividual,
group,organisationorcommunity.Thiseffect:

ɶ maybepositiveornegative
ɶ maybeintendedoraccidental
ɶ may affect service providers, service managers, users/customers or other
people

The impact can show itself in individual cases or through more generally
discerniblechanges,suchasshiftsin:

ɶ economic circumstancesofa region orlocalitye.g.morejobsavailable,reduction
inlocalpoverty
ɶ educational and other outcomes e.g. skills acquired; educational attainment;
levelsofknowledge
ɶ qualityoflifee.g.selfconfidence;socialinclusion;workorsocialprospects

Impact assessment—is collecting, analysing and reporting evidence to show whether
the service makes any difference to people, groups, organisations or communities.
(Impactassessmentissometimescalledimpactevaluation.)

Program goals—the overarching stated purposes of the program and/or of the
organisations providing the ICTbased services (e.g. to reduce poverty in the
communitiesservedbytheorganisations).

Objectives—refinement of the program goals into more specifically achievable terms,
usuallyexpressedaswhatcanbeachievedinone,threeorfiveyears.

Thechartbelowshowstheplanningprocessthatunderpinsimpactevaluation.It
begins with the impact aims and indicators and then shows two parallel lines of
activitydecidingon:

ɶ What infrastructure need to be put in place to meet the aims and what
activitieswillhelprealisetheaims;
ɶ What indicators of impact linked to your aims and on output and process
indicators to ensure that your activities are helping you move toward your
aims.

Figure A.3.1. Developing Performance and Impact Indicators
Overall purpose/mission
Aims/objectives
What are you trying to achieve?
Areas where service is trying
to make a difference (not activities)
Outcomes/impact/achievement
indicators/success criteria
How will you know if you are
making a difference?
Service Infrastructure
Output/service performance
indicators
Processes that contribute to
realising the aims/objectives
including activities and capacity building
Review your indicators Process/performance

indicators
Baseline data
Collected to ascertain
where the service is now
Targets
Grounded in baseline data
Implement and monitor

Source:Markless,S.andStreatfield,D.R.2006.

Examples of Evaluation Framework

OneexampleofhowimpactevaluationhasbeenappliedtoinformatizationistheReal
Access/RealImpactframeworkdevelopedinSouthAfrica.Thisframeworksetsoutthe
determiningfactorsinwhetherthereisrealaccesstoICTthatgoesbeyondcomputers
and connections so that technology use makes a real impact on socioeconomic
development.1
If the overall mission of a rural informatization project is to improve the living
standard of rural farmers, a framework to evaluate the impact might look like the
examplebelow.

Table A.3.1. A Framework to Evaluate Project Impact
Impact Impact Activity/ Impact
aim objectives processes indicators Outputs Outcomes
To Increased Computers Reduced direct Local staff More relevant
improve rural installed costs through use competent and local content
living productivity of on-line confident to available
standards Experts recruited administration give ICT
of rural support to
to develop local Increased
farmers farmers
content Farmers use computer and
Internet services internet skills
Local staff trained for timely and Proportion of amongst
relevant farmers farmers
in ICT
information to completing ICT
help increase courses Increased
Local staff run quality and yield
ICT courses for access to
local farmers computers and
Farmers diversify the internet
production
Increased
trade/sales Level of sales
Increased Training Farmers develop Farmers’ co- Evidence
capacity for materials and new products operatives are presented to
participating strategies convinced to farmers about
in new developed support new business
Farmers develop
economic farmers’ use of development
knowledge of
domains prospective ICT
customers
Levels of interest
in new business
development
Farmers access
credit/ financial
resources on-line

For the pilot projects highlighted in Appendix 2, the following are some of the
indicators that could be pursued, to assess impact, a framework is proposed for
evaluatingtheirimpactaswellastheirsustainabilityandreadinessforscalingup.

Table A.3.2. Indicators to Assess Project Impact
Impact Category High-level Indicators
User satisfaction with services Reduced direct costs (such as travel time, service delivery time,
bribe payment)
More and better-quality services (such as single-window access,

convenience, quality of problem resolution0
Demand driven (such as feedback mechanism)

Economic impact Income generation
Job opportunities
Disaster prevention/mitigation
Social impact Better-informed population (for example, on health and education)

Improved governance and transparency
More social networks and participation in community activities
Sustainability Level of subsidy required (fully funded, partial funding)

Timeframe of subsidy(throughout project life vs. initial stages)
Revenue sources
Capital costs required (such as for infrastructure building)
Degree of scaling up experienced
Note

1
http://www.bridges.org/publications/94.

Appendix 4. A Framework for Evaluation of Eighteen Pilot Projects

User Satisfaction Economic Social
of Services Impact Impact Sustainability of Service
Builds
Increased Service
Service Income Employ awareness/ Level of Add’l Project Centers/
Project Improve- More gene- ment interest in Public Loan/ User scaled Access
1 2
Name ment? services? ration? generation? ICT? Subsidy Grant? fees ? up? Points?
Panggezhuang Agri-
Products Cooperative Y n/a
Information Service
Station Y F Y
Rural Information
Service Platform F Y
Henan Netcom P Y
Baima Shop Y P L&G3 A/C Y
Informatization
Experience Center P C Y
Rural Information
Service System Y F Y
Community Information
Court F C Y
Farmer Internet Bar Y F Y Y
Chongqing Hotline Y Y F A/M
1000 Towns and
10,000 talents Y N Y
E-Family F A
Jinta Model Y Y F
Agricultural Products
Association Y P M/P
Farmers Internet Café Y n/a A Y
Informatization Farmer
Family Stores Y P Loan4 A Y
Rural Information
Agent Y F
Farmers Mail Box Y Y P A
Notes:
1Levelofpublicsubsidyinclude:F(Fully);P(Partially);N(Nosubsidy).
2Userfeesinclude:A(AccessfeestousetheInternet,SMS,voiceservice);C(Commercialservicefees,e.g.
printing,faxing,multimedia,etc);M(Membershipchargesforregularservices,e.g.professional
cooperatives);P(Profitpercentage);andcombinationsofeach.
3Loansprovidedbyruralcreditcooperatives,localagriculturalassociations;GrantfromIntelforfarmer
computers.
4ChinaTelecom,ruralcreditcooperatives,localagriculturalassociation.

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Rural Informatization in China is part of the World Bank Working Paper
series. These papers are published to communicate the results of the
Bank’s ongoing research and to stimulate public discussion.
China’s recent economic growth has expanded industrialization and

urbanization, upgraded consumption, increased social mobility, and
initiated a shift from an agricultural-based economy to one based on
services and industry. However, more than half of China’s population still
lives in rural areas, where the average per capital income is less than a
third of the urban average. The government of China has increased its
commitment to rural development and poverty-reduction programs, with
attention to narrowing the rural-urban divide. Informatization—defined as
the transformation of an economy and society driven by information and
communications technology (ICT)—is increasingly being explored as a
way of helping poor people. Rural Informatization in China presents an
overview and in-depth analysis of rural ICT initiatives in China. This study
reviews the present-day status of China’s rural informatization
infrastructure, examines and summarizes by organizational model the key
initiatives in the past decade, and provides policy recommendations to
address current challenges. Case studies of different financing models of
rural ICT initiatives from China and other countries are included.
World Bank Working Papers are available individually or on standing order.

This World Bank Working Paper series is also available by subscription to
the World Bank e-Library (www.worldbank.org/newelibrary).
ISBN 978-0-8213-8018-5
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W O R L D B A N K W O R K I N G P A P E R N O .

Christine Zhen-Wei Qiang

THE WORLD BANK

C hina’s recent economic growth has expanded industrialization and urbanization,

individual government departments to innovative partnerships cutting across

Table 2.1. Information Infrastructure Coverage in China, 2007

Fixed Line Telephony

Radio and Television

60% 55.2% 53.9%

National average Rural area

Key Rural Informatization Actors and Initiatives

Table 3.1 (continued)

Table 3.1 (continued)

Private information technology firms

Nongovernmental organizations and professional cooperatives

Organizational Models for Rural Informatization

Table 3.2. Rural Informatization Problems and Attempted Solutions

Business Model Breakdown Example: Ningxia Provincial Government

Telecommunications provider model

Business Model Breakdown Examples:

Professional association/cooperative model

Business Model Breakdown Example: Panggezhuang Watermelon

Business Model Breakdown Example: Intel, Sichuan Telecom, and

Private sector model: informatization experience centers

Government- and Donor-driven Initiatives and Sustainability

Box 4.1. Public Programs of Access Centers in Chile

How Chileans say BiblioRedes has affected them

They have greater access to 88%

They are more informed than

Computers will improve the

Private Sector Participation

The Appeal of the Franchise Model

(Box continues on next page)

Transnational franchise models are also emerging to provide crosscountry

Box 4.3. CDI: A Social Franchise Targeting Disadvantaged Urban Youth

Hybrid Organizational Models

Box 4.4. Gyandoot Program in India

India’s Gyandoot program is a government-to-citizen service delivery portal and multipurpose

Lack of a Coherent Strategy

Weak Coordination across Ministries and Integration at the Provincial Level

Income Frontier of private

Unsustainable Business Models and Over-reliance on Government Financing

Lack of Demand-Driven, Locally Relevant Information Resources

Low Levels of Public Awareness and Capacity Building

Lack of Systematic Learning and Impact Evaluation

Formulate a Comprehensive and Coherent Strategy

Support Innovative Business Models

Consolidate and Share Resources

Raise Public Awareness and Build Capacity

Develop Intermediary Institutions and Networks

Ensure Learning, Monitoring, and Evaluation

4. Demonstration Project for x Formed a network of experts and a

5. Opinions of the Committee and the State Council on Promoting the

Appendix 2. Analysis of Eighteen Pilot Projects in China

1000 Towns and

Community Internet &

Rural Information Internet &

Products Internet &

Appendix 3. Impact Evaluation: Rationale, Definitions and Framework for

Figure A.3.1. Developing Performance and Impact Indicators

Review your indicators Process/performance