Maybe the US can afford the old economy and high living standards, but China can t. The major hurdle is infrastructure. Partly, this is a question of the kind of new economy infrastructure that Tian s CNC is building. But more often, it is the more mundane elements that are holding back the start-ups. There is no consistently effective and affordable distribution system nationwide, or even in the major cities.
Payment systems are also a problem.
Credit cards are a relative rarity in China, even among the comparatively wealthy users of the Internet. Access to capital is a third issue, tied in some ways to the fourth, which is government attitudes. Foreign venture capitalists have been eager to fund Chinese dotcoms, at least before last month s market turbulence. Interestingly, some of the discussion of China s entry into the WTO at the summit focused on how that will open up the financial markets. WTO accession will open up vital access to more capital.