Report on semiconductor industry developments

1
Simplifying Business Regulations Critical
for Development of IT Dan Brody Managing
Director US Information Technology
Office Beijing September 2001
2
USITO Introduction

• Established in 1994
• Voice of the US high tech industry in China
• Representing 4 US high tech trade associations
  with an aggregate 7,000 companies
• Main message
• Govt should lead in tradl areas industry
  should lead new areas
• E-government can improve govt coordination,
  processes

3
Time is Golden

• IT does not equal .com
• Rapid CHANGE in IT markets, business models
• All governments struggling to determine best
  methods
• Many interests all seeking to promote ecommerce
• Govts seek to maintain leadership in traditional
  areas like IP, taxation, criminal acts, legal
  redress, etc
• Business seek ability to experiment with new
  models, reach new customer, and develop new
  devt/distribution/partnership arrangements
• IT-specific issues
• E-commerce and most IT is by definition
  global
• Most IT companies draw significant portion of
  revenues from intl
• IT products have faster product cycles

4
Time is Golden

• The challenge is to develop regulations
  appropriate in arenas where they are necessary,
  as recognized in OECD Ottawa Ministerial
• Regulating
• First, ask if new regulations are necessary or if
  existing can be adjusted
• Second, if regs are necessary, work with industry
• Third, outside traditional areas of govt reg,
  solutions should be industry-led, market-driven
  and consensus-based

5
Governments are Complex

• All governments have many different agencies,
  with complex inter-agency coordination processes
• Coordination requires time, and can cause major
  delays to business
• China
• Stupendous growth over last 20 years
• Large bureaucracy makes difficult for SMEs

6
State Council
SC LAO
MOFTEC
SETC
SAIC
SDPC
MII
SARFT
SCIO
7
Need to Administer Sector

• Industry recognizes the need for government
  oversight
• Administration of sector made more difficult if
  government bureaucracies are getting smaller,
  fiscal revenues are declining
• Governments can improve efficiency and
  transparency by moving toward e-government
• If a government were to ever go public and be
  subjected to shareholder scrutiny, maybe the CEO
  (President?) would roll out a plan for serving
  customers (citizens?) better by offering a
  ONE-STOP SHOP website where customers
  (businesspeople?) could fill out a single form at
  a single place and then the company (government?)
  would send copies to all the relevant departments
  internally