Market Focus : The Internet Scales Great Wall of Communication With China : Scholars and businesses in People’s Republic tout virtues of exchanging ideas in cyberspace. But some fear Communist leadership’s reaction to use by human rights groups.

Three years ago, 29-year-old Yuan Yue quit his job with the Ministry of Justice, gave up his government-supplied apartment and ventured into the brave new world of business.

After a lean beginning, Yuan and his associates built Horizon, their market research and public opinion polling company, into a thriving enterprise with branch offices in two other Chinese cities. Earlier this month, Yuan proudly added the newest symbol of “making it” in China--an Internet e-mail address.

In a development that has implications for business, scholarship and human rights, the People’s Republic of China is rapidly getting wired--the latest technological breakthrough forcing the nation’s integration with the outside world.

The Internet has already arrived in other parts of Asia, where governments are giving it a mixed reception. So far in China, there has not been a peep from the Communist state about the dangers of the free exchange of ideas in cyberspace.

In contrast, the orderly city-state of Singapore, often viewed as a model of rigid governance by China’s Communist leaders, threatened recently to censor burgeoning traffic on the Internet, especially that critical of the country’s neo-Confucian ethos.

Chinese traffic on the information superhighway increased early this month when two new Internet servers were opened by the Ministry of Post and Telecommunications in cooperation with Sprint International, based in Reston, Va. That makes at least eight networks, mostly at universities and scientific institutions, now linking China to the Internet.

The newly established Sprint system is the first to be offered to the general public, although so far only in the major cities of Beijing and Shanghai. To promote its use, the Ministry of Post and Telecommunications is offering it free on a trial basis to potential customers.

Because getting on the Internet requires a computer, a modem and a telephone--items not within the budget of the vast majority of China’s 1.2 billion people--it may be a while before e-mail becomes a common feature of life here.

“The cost is still too high for the common people,” said Wang Yong Le, project officer for computer networking with the Chinese Academy of Sciences. “Just to get a new phone costs 5,000 yuan ($600).” Only one in 200 people has a telephone in China.

But Susan Horvath, researcher at Merit Network--an Ann Arbor, Mich., company that monitors international Internet traffic--reports that China is one of the world’s fastest-growing Internet users, transmitting more than 12 billion bytes of data in January after starting at zero in early 1993.

Significantly, Horvath noted that the number of bytes coming into China from the outside (9.3 billion bytes) in January far exceeded those going out (3.27 billion bytes).

That means people here--mostly university scholars and scientists--are already taking full advantage of a new gateway to Western databanks.

China’s Internet traffic is still very light compared to that in North America and Europe. According to Merit Network, the volume of Internet usage on the major “backbone” services in the West now approaches 20 trillion bytes a month.

But the momentous fact that the world’s last great Communist power has come on-line has been both applauded and nervously noted by many inside and outside China. “China is taking its first, tentative steps into the information age,” said a diplomat in Beijing, “but I’m concerned about the fragility of the thing.”

The Internet, enthused Halsey Beemer, a project officer with the World Bank, “encourages scientific cooperation across institutional and national boundaries.” Under Beemer’s supervision, a $131-million World Bank project to connect China’s major universities and research institutions via the Internet so that they can share a U.S.-model supercomputer is scheduled for completion this summer.

China’s scientists eagerly testify to the virtues of the Internet.

“It’s helped us a lot,” said celebrated Beijing University plant geneticist Chen Zhangliang. “We send DNA sequences we find to a databank in the U.S. to determine what kind of gene we have.”

But in a development the Chinese Communist leaders might not find so palatable, the possibilities of the Internet have also been noticed by international human rights organizations.

China Human Rights Forum, directed by a board composed of Chinese political exiles--including well-known investigative journalist Liu Binyan--is one of several organizations that have established their own Internet addresses to disseminate articles opposing the Beijing Communist regime.

Another U.S.-based Internet forum, Digital Freedom Net, offers access to the collected writings of Chinese dissident leader Wei Jingsheng, who disappeared last April when he was arrested outside Beijing.

The Chinese capacity for mastering the Internet was first demonstrated not in China but in North America, where thousands of overseas Chinese students participate in one of the most successful electronic newsletters on the Internet.

Founded six years ago by four students in Canada and the United States, the China News Digest today boasts 35,000 subscribers, including an unspecified number in China.

With editions in English and Chinese, the China News Digest collects stories about China from many sources and then distributes them in electronic newsletter form to subscribers. Many, but by no means all, of the articles are highly critical of the Communist government.

In 1994, the service, still managed and staffed by volunteers on American and other overseas campuses, opened a worldwide web server that it claims is now “visited” by Internet users more than 7,000 times each day.

If the Internet system eventually explodes into use inside China, blasting yet another hole in the isolationism that has long dominated Chinese politics, it probably will be on the basis of the highly successful China News Digest established abroad.

Students who return to China after their overseas studies bring with them a familiarity and mastery of the Internet.

If the government’s laissez-faire policy regarding the Internet continues, the system has the potential to cause a revolution in the way information is shared and distributed here.

Thirty years ago, Chinese leader Mao Tse-tung was able to convince the masses that China was one of the most advanced societies in the world because few people had access to radios and televisions that might paint a different picture of the outside world.

By 1989, at the time of the massive democracy demonstrations in Tian An Men Square, the telephone and the facsimile machine had become such important communication tools that the demonstrating students were able to mock the old Maoist slogan “Seek Truth Through Facts” by changing it to “Seek Truth Through Fax.”

But Robin Munro, a human rights activist in Hong Kong with Human Rights Watch/Asia, warns that there are dangers lurking in this brave new world.

“The Internet coming to China obviously opens up major communications possibilities for progressive intellectuals and also for dissidents,” said Munro.

“But there also may be some dangers in store if the dissidents think they can use the Internet safely and anonymously to discuss and coordinate dissident activities.”

Munro noted that in court cases against dissidents in recent years, authorities often cite the confiscation of computers, floppy disks and fax machines as evidence of subversive activity.

Said Munro: “The security authorities are sure to pay increasingly close attention to e-mail use now that the Internet has officially arrived, since they’ll be quite aware of the potential it holds for dissidents to network better.”