Chinese government official admits domestic mobile Internet industry is ‘relatively backward’

Speaking at a seminar hosted by wireless operator China Mobile, a Chinese vice minister of industry has candidly admitted that some of the technology in his country’s mobile Internet industry, such as core devices and operating systems, have been “relatively backward” and have left overseas OS-makers like Apple and Google space to flourish in the market.

Sina Tech reported Ministry of Industry Vice Minister Liu Lihua’s remarks from the sixth International Mobile Internet Conference.

Liu reportedly said that the rise of smartphones and mobile Internet users brought the Chinese market to maturity. Mobile Internet users have climbed to 1.06 billion subscribers with 184 million 3G users, and there are over 100 million smart device owners in China. There are gaps in that maturity, though, according to Liu.

“At the same time as this rapid development, we should also take note of some of the problems that exist in China’s mobile Internet industry, such as core devices, operating systems and other key technology are relatively backward; app store fragmentation and a lack of scale; business models that blindly pursue size and a lack of innovation,” he continued.

Those issues opened up an opportunity for Google, Apple and other giants to gain a foothold in the market. Liu added that the Chinese industry has produced a number of mobile phone operating systems, but their late start prevented the products from catching on. He further challenged Chinese companies to participate in the market to meet the “urgent need” for a leader.

A study from China’s Internet Network Information Center released in July found the number of Web users to have climbed 11 percent year over year to 538 million, with mobile users passing the number of PC users for the first time. Data from IDC suggests smartphone shipments in China overtook feature phones in the second quarter.

For its part, the Chinese Internet industry has developed its own titans, namely Tencent (IM, social networking), Baidu (search), Sina (Web portal, social networking) and Alibaba (ecommerce). However, critics have accused domestic players, big and small, of failing to innovate and instead resorting to cloning successful overseas businesses.

Image via Flickr / Matt512