Analysis | Is China's new 'internet plus' ambition all about new smartphones?

China’s 'internet plus' strategy, announced in early March, promised to integrate mobile Internet, cloud computing and big data for manufacturing and promote the development of e-commerce, industrial networks and internet banking.

But how would this ambitious plan to transform the country into a digital economy work in practice? Already more than 630 million Chinese use the Internet and there are 570 million mobile users who feed Internet businesses worth more than 2 trillion yuan (US$323 billion), according to a Ministry of Industry and Information Technology report in 2014. 

Yang Weiqing, the founder of iResearch, a leading research group on the Chinese IT industry, thinks that end-user devices are the most important, so the government should focus on smartphones and similar devices, which will be at the centre of all Internet-related businesses and the Internet Plus.

“The smartphone is the fundamental tool to connect all parties on the Internet and can be the starting point of Internet Plus to link consuming, industries and finance,” he said in an interview.

Smartphone makers have already been pushing this view, given the potential for them to grow their sales. Entrepreneur Lei Jun, the CEO of Xiaomi, China’s largest smartphone maker, has called for the devices to be able to connect to all home appliances, which should be built to a universal standard to facilitate connecting them all to the internet.

“Imagine when you put the smartphone on the desk at office or home, all electronic devices will automatically link to it. It will be an amazing experience,” Lei said at a press conference in March.

Xiaomi sold 61 million smartphones and made 74.3 billion yuan in revenue in 2014, and recently has taken a step towards its founder’s ambition by investing in one of the mainland’s major home appliance makers, Midea.