Figure 8-1 China and its neighbors. China's government is controlled centrally by the Chinese Communist Party, which dictates many facets of industry and technology. After the death of Party Chairman Mao Zedong in 1978, Chinese leaders started focusing on building a quasi-market- based economy. They began rebuilding infrastructure and developing economic poli- cies to improve living conditions and China's standing in worldwide commerce. In the 1990s, the Chinese government recognized that it needed telecommunica- tions infrastructure to become a leading technology country and undertook a major push to develop this infrastructure starting with the eastern coastal region. According to Dixon Doll, the cofounder and managing general partner of early- stage venture capital firm Doll Capital Management: The Chinese government recognized right from the beginning (and they were very, very savvy to do this) that for their economy to thrive and prosper, they needed a world class telecommunications infrastructure in place, and they did a great job of taking all the investment and planning steps necessary to achieve this goal. Asian Market In the information economy we live in today, if you can't get connectivity to your business, you're in a very tough spot. There are a lot of studies about macroeconomics that talk about the critical success factors for an emerging market economy. You have to have ample supplies of energy and a good communications system. A good communications system facilitates speed, volume of business transactions, and more than any- thing else, facilitates the substantial amounts of productivity increases, which are central to a thriving economy. Because of the cost of digging trenches and laying cabling to its large popula- tion, most of whom had no landline telephone service, China concentrated on build- ing out its cellular infrastructure. For large businesses, it developed Ethernet-based IP networks rather than investing in older circuit-switched technology. In some areas, IP-based networks use the 