Seeking to become a leader in information technology, in December 2004 China launched the Internet Protocol version 6 to link 25 universities in 20 cities across the country. The China Education and Research Network Information Center (CERNIC) claimed that the launch of the new Internet Protocol (IP) has made China a leader in the race to build the next generation of the Internet.

Version 6 is more powerful than the current Internet Protocols because it can provide billions of new IP addresses. The launch obviously attracted great attention in the world of information technology. But for China, the use of the Internet has already spread across the vast country with the active participation of people in Bulletin Board Systems expressing their most pressing demands, which include development of new identities and discourse on religion, lifestyle, love and politics. The Internet was a newcomer in China, but it has spread quickly among the middle-class and many young people. The Beijing government uses the Internet to propagate state policy and ideology and it also blocks access to websites aimed at spreading anti-government information.

Taiwan plays an important role in the spread of information technology in China because of its economic investments that bring electronic hardware and software into China. In the chapter dealing with the economic interactions between China and Taiwan, author Barry Naughton says China reached a new level of sophistication in 2000 after becoming a strong competitor with many Asian countries in the field of electronics following two decades of building export-oriented electronic assembly with investments from Taiwan and other Asian countries. China's Semiconductor Manufacturing International Corporation (SMIC) has emerged as a clear leader in the fabrication of wafers. SMIC is headed by Richard Chang, a Taiwanese who worked for Texas Instruments before opening a manufacturing plant in Shanghai with more than 100 Taiwanese engineers. The Taipei government's Institute for Information Industry's Market Intelligence Center revealed that Taiwanese share in the IT industry's total production was only 38 percent in the first quarter of 2002, down from 47 percent in 2001, while production in the mainland was up in 2002.

"Powerful economic forces are driving Taiwan and China's IT industries together," Naughton writes. He says Hong Kong originally played the role of linking the mainland with the world's economy, but it has been reduced to the role of competing with Shanghai in the field of IT. The situation in Taiwan is different from that of Hong Kong because the former has transferred its high-technology manufacturing to the mainland and Taiwanese companies have developed a huge stake in the mainland's emerging electronic industry in Guangdong and Shanghai region.

"This means that as expertise develops in Shanghai and Beijing, Taiwan's share of the business will not necessarily decline," Naughton writes. "Indeed, Taiwan will be pulled into increasingly close involvement with mainland industries. This will have significant implications for economics, politics, and the development of new information technologies."

To cut costs, enhance its international competitiveness and maintain its global production networks, Taiwanese firms have had to move their manufacturing capacities to the mainland. Author Tse-Kang Leng says Taiwanese PC products in China can be called "Made in China, by Taiwan" because of the division of labor and business networking between the two sides. Leng says electronic manufacturers in the mainland whose goal is to have a global business networking will in the end strengthen the powerbase of companies like SMIC. "The global networking enhances, rather than weaken, Taiwan's economic security with mainland China," Leng says. He says the Taipei government is restrained in promoting global networking for Taiwanese IT industries because of politics and China's unification demands. Under such condition, Taiwanese receive only minimum support from the government if they want to expand their networks and may have to look for indirect ways to invest in the mainland.