Making the Right Connections

Edward Zeng knows all about high-speed access and good connections--in politics as well as on the Internet. The government economist-turned-businessman has leveraged an insider’s knowledge with an entrepreneur’s flair to find a profitable niche in China.

He has staked his claim in cyberspace with a simple idea: Turn a network of Internet cafes into a countrywide constellation of cyber-ports to make it easy for anyone to get on the Web.

He hopes his Sparkice cafes (https://www.sparkice.com.cn) will act as virtual and physical gateways into the world of e-tailing for the fastest-growing Internet audience in the world. “It’s the best way to get around the [barriers] to e-commerce,” Zeng said, referring to the issues of how to get on, how to pay and how to play.

Zeng’s solution is simple: Shop on the Web, pay at the cafe, and Sparkice will take care of the rest. The cafes also can set up home pages for their clients, who so far are selling everything from garlic to steel.

Zeng plans to open 100 Internet bases around China, even in the remote areas such as Sichuan province in the nation’s interior. Recent government restrictions on Internet cafes like his don’t bother him. As a part-time advisor to policymakers in Beijing, he helped write them.

“There is no road, there are no rules,” Zeng said. “We pave the road, we make the rules.”

One of his products, Dragonpulse, offers a detailed industrial database created from an official government census. The information collected by a fading Communist apparatus has turned out to be a very good capitalist tool. Users can receive elaborate information on nearly 100,000 once-impenetrable state-owned companies for $50 a search. And they can pay by credit card.

Zeng, a confident 35-year-old, is a study in contrasts himself. A former economist with China’s State Planning Commission, he researched wage and price reform for the government until 1989. But when China was slapped with international sanctions for its suppression of the demonstrations that year in Tiananmen Square, “everything was put on hold,” Zeng said. He quit the government and moved to Canada for six years to study and start a series of small businesses. Most of them failed.

He returned to China in 1996, a few months after Internet access became publicly available.

The following years were a critical time in China, as the government struggled over how to balance the economic benefits of the Internet with the flood of unwelcome information, pornography and gambling that came with it.

Afraid that political concerns would mean more electronic walls and bottlenecks, Zeng prepared a white paper outlining the advantages of developing the Internet and especially e-commerce: It can help distribute wealth, stimulate exports and create jobs at a time when China’s economic growth has stalled.

“One big order from overseas can support a whole factory,” Zeng said.

Those ideas won him the ear of government leaders, who have swung around to full-fledged support for developing laws and technical infrastructure for e-commerce in the next few years.

In turn, those connections have drawn the attention of world leaders and Internet gurus. He was invited to meet President Clinton and Hillary Rodham Clinton during their visit to China last year. He has been dubbed a “global leader for tomorrow” by the World Economic Forum. At this year’s WEF meeting, a jet-set schmoozefest held at a ski resort in Davos, Switzerland, he swapped ideas with Amazon.com’s Jeff Bezos and VocalTec’s Elon Ganor about Internet telephony.

“This is the future for e-commerce,” Zeng said. “We’re going to be out in front.”

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Anthony Kuhn in The Times’ Beijing Bureau contributed to this report.