Comparative Analysis of Broadband Internet Development For Digital Economy in China and Indonesia
Comparative Analysis of Broadband Internet Development For Digital Economy in China and Indonesia
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e-ISSN 2476-9266
p-ISSN: 2088-9402
Doi:10.17933/jppi.2019.090106
Naskah Diterima: 3 Mei 2019; Direvisi : 9 September 2019; Disetujui : 9 September 2019
Abstract
It is important to promote broadband internet development because of its role in supporting economic
activities. The 10% increase in broadband penetration triggered economic growth of 1.38% in middle-income
countries. In 2050, China is predicted to continue as the world economy leader, while Indonesia moves from
position 8 to 4. This qualitative study uses “nation as an object of study” approach of cross-national
comparison in comparing broadband internet development for digital economy in China and Indonesia in
order to realize their future economy position. Four compared parameters are internet infrastructure profile,
digital economy overview, broadband internet development strategy, and broadband internet regulation for
digital economy. Its result is expected to give direct benefit to regulator in making further plans, strategies,
and regulations of broadband internet, particularly for Indonesian government. This study finds the
telecommunication infrastructures to support broadband internet and digital economy regulations in China are
more mature than Indonesia. Nonetheless, Indonesia is very active in the current e-commerce development.
However, Indonesia needs to expand in other digital economy activities such as fintech and provide human
resources with knowledge and skills as part of an important component of the digital economy. Indonesia also
needs to learn from China regarding e-commerce regulations, such as taxation and product standards. This
effort requires the collaboration of government, academics, and industry players to strengthen the role of
broadband internet in digital economy, in China and in Indonesia.
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Comparative Analysis of Broadband Internet Development for Digital Economy (Riva’atul Adaniah Wahab)
development of digital economy in European Union predicted to continue to lead the world economy
countries (Ministry of Communications and whereas Indonesia moves from position 8 to position
Informatics, 2016). 4. When Indonesia makes it into the top five it will
The 2010 World Bank study found that in be interesting for a further study.
low-income and middle-income countries, a 10%
increase in broadband penetration triggered 1.38% of
economic growth. This increase was higher than in
high-income countries which only contributed
1.12%. Booz and Company (2009) predicted that a
10% increase in broadband access in a year
correlated with a 1.5% increase in labor productivity
in 5 years ( The Ministry of National Development
Planning /BAPPENAS, 2014). McKinsey and
Company estimated a 10% increase in penetration of
household broadband internet would drive the
growth of 0.1% -1.4% of Gross Domestic Product
Figure 2. Emerging Markets will Dominate The
(GDP). Oxford Economics (2016) claimed that World’s Top 10 Economics in 2050 (GDP at PPPs)
increasing mobile internet penetration would
Several studies related to the issue of
contribute to an increase US$ 58.1 billion GDP and
development of broadband internet and economy
open one million new job opportunities in 2020 at
have been carried out, among others: Salahuddin
South East Asia. At the regional and village level,
(2015) assessed the linkage between the internet
The Centre for Strategic and International Studies
users and economic growth in South Africa. Using
(CSIS) study (2018) argued that a 10% increase in
Autoregressive Distributed Lag (ARDL), result
network coverage contributed to the Gross Domestic
showed the positive and significant relationship
Regional Product (GDRP) increase of 0.92%. The
between both variables (Salahuddin & Gow, 2015).
internet opens the opportunity to create "online
Similar to Salahuddin (2015), bringing the
work" that allows users to make money through
broadband focus, Pradhan (2015) wrote about the
internet-based work. For example, villages in
short-run and long-run relationship between ICT
Indonesia are involved in online business by creating
infrastructure and economic growth in Asian, starting
capacity building programs to improve customer
from 2001-2012. Fixed broadband was one of the
service skills (Hirawan, 2018).
variable of ICT index in this case (Pradhan, Arvin, &
Based on the World Internet Conference
Norman, 2015). Jorgenson and Vu (2016) through
(WIC) report, the digital economy is predicted to
the title “The ICT revolution, world economic
contribute US$ 2 trillion in world GDP in 2020. In
growth, and policy issues” described the important
2017, 171 million people work in the digital
policy issues about ICT revolutions in promoting the
economy-related sector, 22% of overall employment
economic growth. Program strategy was one of the
in the world (Shenggao, 2018). In 2050, China is
important issues in implementing the ICT policy.
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Network infrastructure was needed to increase the Indonesia moves from position 8 to position 4.
connected economy (Jorgenson & Vu, 2016). Indonesia makes it into the top five. It is interesting
Relating to the concept of internet economy, to be made further study. According to the
Gnezdova (2016) mentioned that internet had created importance of broadband internet, this research
the new business model contributing to the economy analyzes the current state, the strategies, and the
development. Online resources also provided the regulations of the broadband internet development
efficiency in the economy activities (Gnezdova et al., implemented in China and Indonesia. To achieve the
2016). target entering the top 5 economics in 2050,
Using the cross-country methodology, Indonesia can learn China’s broadband internet
Mitrovic (2015) compared the broadband adoption deployment for digital economy. The result is
level of Western Balkan countries to the European expected to give direct benefit to regulator in making
Union countries, also described the digital gap. The further plans, strategies, and regulations of
result provided strong and weak indicator of broadband internet development, particularly for the
broadband that should be attached as priority in Indonesian government.
political intervention. Building the information
METHODOLOGY
society and improving the economic competitiveness
were part of the result (Mitrovic, 2015). This qualitative research uses cross-national
Another comparative study was also comparison. Because these two countries have
conducted by Gunaratne in 2015. Malaysia, India, similarity in the growth of digital economy, the
Indonesia, and Australia were researched to describe “nation as an object of study” approach of cross-
their rationale, scope, funding, technology, and national comparison is conducted. Using this
current status of national broadband network. The method, researcher can gain deeper understanding by
result was found that awareness initiative is comparing particular issues of broadband internet
important to increase the broadband penetration. development in China and Indonesia. Thus,
Broadband should be affordable and acceptable by researcher can learn the policy initiative of others,
the user (Gunaratne, P, Fernando, & Rohman, 2015). the similarities and differences among countries
The latest research, Curran (2018) wrote which are studied (Gharawi, Pardo, & Guerrero,
about three factors that impact to the growth of 2009).
broadband in Korea, those were policy principles, The data are obtained through literature
regulatory decisions, and population density (Curran studies, for instance, journals, books, news, previous
et al., 2016). researches, and other sources. Collected data are
This research focuses on comparing the consisted of information about existing condition in
broadband internet deployment between two China and Indonesia related to 4 main parameters:
countries predicted to occupy the high position in 1. Internet infrastructure profile
digital economy in the future, learning the policy This part presents empirical evidences of the
initiative of others. In 2050, China is predicted to existing broadband internet infrasctructure in both
continue to lead the world economy whereas countries. The indicators include internet user,
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Comparative Analysis of Broadband Internet Development for Digital Economy (Riva’atul Adaniah Wahab)
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Comparative Analysis of Broadband Internet Development for Digital Economy (Riva’atul Adaniah Wahab)
around 10.2% from the previous year. The recorded of financial internet products reached 129 million, an
consumer goods online retail sales reached RMB increase of 30.2%. The internet financial utilization
7,175.1 billion, an increase of 32.2% from the ratio reached 16.7%, an increase of 3.2% from that
previous year. For physical products, online retailing of 2016. In the government sector, Alipay and
reached RMB 5,480.6 billion, 15% of total retail Wechat which are connected to broadband internet
sales of consumer goods, increased by 28% from the networks are used to pay for government services
previous year. Likewise, food, clothing, and daily such as social security, taxation, transportation,
goods increased by 28.6%, 20.3%, and 30.8% education, healthcare, and payment utilities. Online
respectively. Online retail sales of non-physical government users reached 485 million. The
products reached RMB 1,694.5 billion, an increase utilization ratio reached 44%, increasing at around
of 48.1%. Sales of non-physical goods such as 26.8% compared to that of 2016 (CNNIC, 2018).
services are faster than physical goods (CNNIC,
2018). China's cross-border e-commerce trade Broadband Internet Development Strategy in
posted a turnover of RMB 90.24 billion, rising for China
80.6% compared to 2016 (Xinhua, 2018). In 2014, international internet bandwidth per
Another form of broadband internet uses for user reached 5 kilobits per second. China's
digital economy is the development of sharing bandwidth gateway had reached 7.320,180 Mbps at
economy that contributes to economic growth, the end of 2017. This capacity increased by 10.2%
innovation, and expansion of employment. Business from the previous year. The total length of the optical
sharing of bicycle had reached 221 million customers cable line reached 36.06 million kilometers. The base
at the end of 2017, an increase of 108% from the station for mobile communication built to support
previous year. This business expansion covers all mobile broadband internet had reached 6,041
major cities in China. In addition, the food, travel, million. In general, this mobile broadband internet
and engagement businesses are also growing with the infrastructure is capable to cover city and district
availability of online ordering applications. Online areas (CNNIC, 2018).
food orders increased by 64.6% to 343 million The 13th Five Year Plan China targeted 90%
orders, travel orders increased by 25.6% to 376 of poor villages to reach broadband internet.
million, and live reality shows increased 75.22 Therefore in 2018, China focused on broadband
million to 220 million. Online payments complement development in rural areas with the aim of reducing
the economy's digital activity in China. The scale of digital divide between rural and urban areas
the cashless payment user reached 531 million. As (CBNEditor, 2018). The development plan was
many as 571 million of them use mobile online published in the "Implementation Plan Concerning
payments, an increase of 12.3% compared to that of the Advancement of Internet Poor Support (2018-
2016. The use of online payments is also used by 2020)" made by the Ministry of Industry and
rural communities. It was noted that there was an Information Technology. In this agenda, China
increase in the use of online payment in the rural area targeted more than 90% of poor villages with
by 47.1% compared to the end of 2016. The purchase affordable broadband infrastructure in 2020. As
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many as 98% of the total 122,900 poor villages 4. Investing funds of up to US$ 204 billion and
across China will be abble to afford broadband inviting the private sector to contribute.
networks. To realize this target, China has started 5. A pilot project with targeted broadband
three pilot projects for telecommunications services utilization for poor schools and special education
with an investment value of 40 billion yuan (US$ 6 institutions.
billion). This project will be able to connect 130,000 6. Through the 2016-2020 Communication
administrative villages (including 43,000 poor Industry Development Plan, China conducts
villages) with fiber optics. The infrastructure will research for deploying a 5G commercial network
provide experience of internet speeds reaching 65 that promises a higher speed broadband internet
Mbps, faster than the average internet speed in urban experience and enables the integration and
areas. In addition to the target in the rural area, in innovation of mobile internet development,
2020 China also targets fixed broadband deployment industrial internet, and the Internet of Things
covering 70% of households, increasing 3G/Long (CNNIC, 2018).
Term Evolution (LTE) customers to 85% of the 7. Through the "Broadband China" program, China
population, broadband availability for 98% village increased the bandwidth capacity of
administrations, broadband speed access for urban international gateways and expanded the reach
and rural households, respectively 50 Mbps and 12 of Base Tranceiver Station (BTS) for mobile
Mbps, it can even reach 1 Gbps for developed cities. internet (CNNIC, 2018).
The government efforts to achieve these targets
include (chinadaily.com.cn, 2018): Broadband Internet Regulation for Digital
1. Integrating 4G networks by targeting 4G Economy in China
coverage to poor villages into the pilot project. To support the achievement of targets and
The government provides subsidies of 30% of implementation of strategies, special policies are
the total projects with different proportions for needed to improve organizational leadership, the
each region, for example, 15% for the eastern system environment, regulation for construction,
region. improve fiscal support, optimize spectrum planning,
2. Enforcing operators to provide high-speed strengthen personnel training, and develop
networks at low-cost and implement specific international cooperation. The challenge is the need
policies for the low-level economy. Thus, they to establish regional coordination of broadband
are more affordable by their purchasing power. networks, increase the level of broadband network
3. Accelerating the realization of intelligent applications, and enhance broadband network
terminals and application services, and security capabilities (A4AI, 2018). To strengthen the
increasing the promotion of platforms for internet role in national development, China has
educational, health, and economic needs, formulated a variety of policies to ensure that the
including agricultural production for rural internet can be utilized by the public, especially to
communities. support the growth of the digital economy. These
regulations include (CNNIC, 2018):
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Comparative Analysis of Broadband Internet Development for Digital Economy (Riva’atul Adaniah Wahab)
1. New Law of Cyber Security Operators, for example, shopping sites Taobao and
China published the Cyber Security Act on Alibaba. 2) Operators on Platforms, for example,
June 1, 2017. This regulation is a new basis for operating an online store vendors on Taobao, and 3)
regulating network information dissemination and Online Sellers such as e-commerce use social media
cybercrime law. After evaluating the implementation applications (Fujino, 2018). In addition, the new
of regulations in December, it was decided to regulation also regulates taxation and business
accelerate the legislative process of personal registration, personal data protection, and intellectual
information protection regulations, critical property protection (Zhang, 2018).
infrastructure protection, hierarchical cybersecurity 3. Financial Technology (Fintech) Regulation
protection, and cross-border data evaluation. The The Chinese government's policy to improve
aim is information security will increase along with financial inclusion through digital finance has driven
compliance and law enforcement. greater innovation. Today, China is the largest peer-
2. New Law of E-Commerce to-peer (P2P) lending market share and has several
The Standing Committee of the National Unicorns that are focused on payments and
People's Congress (NPC) approved new regulations remittances. A total of 2,136 P2P lending platforms
for e-commerce. This rule came into effect since were recorded completing transactions of RMB 82.5
January 1, 2019. This regulation extends legal billion per month in July 2015 (Arner & Barberis,
protection for consumers and brand owners and 2015). Before 2015, China's banking regulator
breaks down China's reputation as a source of imposed rules on internet payment and third-party
counterfeit goods. In addition, this law also promotes payment services. After that, Guideline on
cross-border e-commerce and participation of small Promotion of Health Development of Internet
and micro businesses (Xinhua, 2018). Close Finance was published as the first comprehensive
supervision and market regulation are needed regulation on fintech. This guideline sets out the
because of the rapid growth of China's e-commerce basic rules of internet payment, online insurance,
market. Beginning with the enactment of this online lending, crowdfunding, and online sales of
regulation, China has published e-commerce policies funds. In December 2015, the China Banking
and standards consisting of the Action Plan for Regulatory Commission (CBRC) issued a draft of
Promoting the Development of E-Commerce in P2P lending regulation and the People’s Bank of
Three Years (2016-20180) and The Guide for Work China (PBOC) issued regulations on online payment
on Standardization of Online Retail. In July 2017, an non-banking service providers (Zhou, Arner, &
internet court was formed in Huangzhou to resolve Buckley, 2015).
online shopping contract disputes in the jurisdiction,
other internet cases, and litigation fees related to Digital Economy Overview in Indonesia
online transactions. At the end of 2017, there were According to Garther's research, an increase
3,064 of 4,859 cases closed. Issues were regulated in online activity is triggered by the high use of
including the types of e-commerce operators mobile devices, for instances, smartphones and
recognized in the law consisting of 1) Platform tablets. Economic digital activity contributes as
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Comparative Analysis of Broadband Internet Development for Digital Economy (Riva’atul Adaniah Wahab)
Broadband Internet Development Strategy in intervention programs and also stimulant and
Indonesia catalyst funding, consisting of:
In 2016, Indonesia international internet a. Economic connectivity including the Palapa
bandwidth per user reached 6.23 kilobits per second. Ring Project, Satria Satellite, Joint Pipe
Until the third quarter of 2016, the number of BTS of Project, and Wireless Connectivity Pilot
four giant operators in Indonesia reached only 163 Project for Rural Broadband. Palapa Ring
thousand. Indonesia is already deploying fiber optic aims to provide the backbone of the national
network more than 154 thousand in length through telecommunications system in the form of
internet provider project, for instances Telkom fiber-optic networks that connect districts
(IndoTelko, 2019), XL (Tari, 2019), and government and cities in Indonesia, especially for non-
project, for instance, Palapa Ring (Katadata.co.id, commercial areas. Palapa Ring development
2019). is carried out with a government and
The Indonesian government's commitment business partnership (Public Private
to roll out broadband services is embodied in Partnership/PPP) cooperation scheme
Presidential Regulation No. 96/2014 concerning (Clinten, 2018).
Indonesia Broadband Plan. The concept is outlined b. Enabling consists of USO Fund Reform and
in the National Broadband Policy Plan (Ministry of the development of National Human and
Communications and Informatics, 2012). Indonesia Industrial Resources.
plans to deploy fixed broadband in urban areas to 3. Encouraging broadband internet-based services
reach 71% of households with 20 Mbps speeds and and applications through stimulation of
30% of population, including mobile access that can application and service development,
be reached by all population at a speed of 1 Mbps in maintaining service quality, price, and security,
2019. Whereas fixed broadband targets in rural areas and increasing consumer protection. The
in the same years cover 49% of households with 10 government encourages interconnection costs to
Mbps speeds, 6% of population, and 52% of mobile a minimum thus, people can enjoy low-cost
accesses at a speed of 1 Mbps. To increase the services.
adoption of broadband services, maximum service 4. Encouraging the use of broadband internet in
prices are targeted at 5% of the average monthly various sectors, especially in priority sectors
income at the end of 2019. Efforts made by the including e-government, e-health, e-education,
government to achieve these targets include ( The e-logistics, and e-procurement, and anticipate
Ministry of National Development Planning the impact of broadband.
/BAPPENAS, 2014): 5. Capacity building programs to improve digital
1. Making broadband internet as part of universal literacy, computer administration, and
access and incorporating broadband in Universal broadband education and training.
Service Obligation (USO). 6. Investing to the broadband deployment at 10%
2. Infrastructure deployments include the of the total needed fund. The estimation of the
infrastructure provision through regulatory
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needed funds are around Rp278 trillion or 0.46% obligate to register their business to the ministry of
of GDP. trade. In addition, this regulation also requires
Challenges faced are 1) broadband Indonesia marketplace user reporting along with traded goods.
still lagging at the global level, 2) backbone coverage 4. Security Customer Protection
is not evenly distributed, especially in eastern Law No. 8/1999 concerning consumer
Indonesia, and 3) the price of broadband services in protection does not include rights in e-commerce
Indonesia is still high. transactions. Consumer protection in online
transactions is currently covered by Law No.
Broadband Internet Regulation for Digital 19/2016 concerning Information and Electronic
Economy in Indonesia Transactions, Government Regulation No. 82/2012
To realize the strategies and encourage the concerning the Implementation of Systems and
achievement of the broadband internet development Electronic Transactions, Ministry of Communication
targets, Indonesia has compiled various regulations and Informatics (MCI) Regulation No. 20/2016
including: concerning Protection of Personal Data in Electronic
1. Regional Retribution Policy Systems, and MCI Regulation No. 19/2014
Since the establishment of regional concerning Handling of Websites with Negative
autonomy in Indonesia, each region in the territory Contents. Indonesia also established the Indonesia
of Indonesia has its own rules regarding regional Security Incident Response Team on the Internet and
retribution for the construction of broadband internet Infrastructure (ID-SIRTII) to minimize the negative
infrastructure. impact caused by the internet network (Wahab,
2. Tariff and Interconnection Regulations 2016).
Telecommunication Law No. 36/1999 and 5. Regulation of Domestic Component Levels
the following regulations mandates companies to At present, there are several domestic
open wide opportunities for interconnection. component level regulations for telecommunication
Minister Regulation No. 8/2006 regulates operations in Indonesia consisting of two; the MCI
interconnection procedures. The crucial issue about Regulation No. 41/2009 concerning Procedures for
interconnection is business-to-business process in Assessing Achievement of Domestic Component
determining the service price based on basis issued Levels in Telecommunication Sector and MCI
by the government. This price can affect the price of Regulation No. 14/2010 concerning Procedures for
services paid by consumers. Assessing Achievement of Domestic Component
3. E-Commerce Regulation Levels of Operational Expenditure/Opex in
Indonesia has launched the E-Commerce Telecommunication. These regulations will be
Roadmap 2017-2019. Draft of Government simplified into the MCI Regulation concerning
Regulation about E-Commerce already exists. In Procedures for Assessing the Achievement of
addition to government regulation, electronic Domestic Component Levels in Telecommunication.
transactions will also be regulated by the Ministry of The proposed ministerial regulation includes
Trade regulations. One of the points is marketplaces telecommunication implementation obligations to
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Comparative Analysis of Broadband Internet Development for Digital Economy (Riva’atul Adaniah Wahab)
meet the domestic component level of capital and concerning Rearrangement of 2.1 GHz Radio
operational expenditure, self-assessment and Frequency Bands for the Need of Organizing
verification, reporting, supervision and control, and Cellular Mobile Networks and Director General of
sanctions (Hutabarat, 2018). Postal and Information Technology Resources and
6. Spectrum Refarming Equipment Decree No. 376/2017 concerning Its
The development of broadband internet Technical Guidelines (MCI Prublic Relations
connectivity is very dependent on the availability of Bureau, 2017).
the frequency spectrum. The availability of adequate In addition, there are also a number of
frequency spectrum allocation will greatly support regulations in the form of ministerial regulations
the sustainability of digital economic growth by governing the Rearrangement of Radio Frequency
ensuring the implementation of financial inclusion, Bands for the Need of Organizing Cellular Mobile
economic contribution, digital citizenship, and social Networks
equality (GSMA, 2018). Table 2. Spectrum Refarming Regulations (JDIH
Kominfo, 2019)
MCI of Indonesia as a leader in ICT sector
has completed refarming the frequency of 800 MHz,
900 MHz, 1800 MHz, and 2,1 GHz. Through this
process, the use of frequency spectrum becomes
more efficient thus the expansion of broadband
internet services and penetration can be accelerated.
Based on the results obtained, a comparison
In this condition, an increase in economic growth can
of aspects of broadband internet development can be
be achieved (Khairuddin, 2019).
formulated in supporting the digital economy in
Refarming is carried out based on several
China and Indonesia as follows:
regulation, for instances, MCI Decree No. 1998/2017
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Comparative Analysis of Broadband Internet Development for Digital Economy (Riva’atul Adaniah Wahab)
Comparison of infrastructure aspects shows emergence of economic activity in this sector. On the
that the gap of between the percentage of internet other hand, fintech in Indonesia has not been
users in China and Indonesia is not large, but if it is massively used because of the constraints of its
calculated based on the number of people, the immature regulations.
amount will be much different because China's Comparison of broadband internet
population reaches more than 1.3 billion while development strategy aspects shows that the basic
Indonesia only reaches more than 260 million. The policy of developing broadband internet in China is
most significant difference between the countries is more based on hierarchy. The derivative policy is
indicated by the number of fixed broadband made to provide detailed guideline targets for the
subscribers, 13:1 in comparison. The very unequal plans. On one hand, the more detailed the guidelines,
comparison of fiber optic cable and the number of the easier it is to execute into programs or action
BTS shows that deploying broadband internet plans form. However, on another hand, overly
infrastructure in China as a developed country is very detailed guidelines will make it difficult for the
massive. The total length of Indonesia’s fiber optic innovation process thus program execution becomes
in 2019 is even smaller compared to China’s fiber inflexible. Table 3 also shows that the target
optic in 2017. coverage and speed of broadband internet in China,
Comparison of the digital economy both rural and urban, is higher than the target in
overview aspect shows a quite large gap from the Indonesia. It is because of the basic
aspect of contribution to GDP. China's digital telecommunication infrastructures in China, such as
economy has contributed two digits in GDP growth the number of BTS and fiber optic, are more
in its country, while Indonesia only recorded one improved compared to Indonesia. This condition is
digit. However, entering 2018, Indonesia's digital predicted to make it easier for China to achieve its
economy was predicted to contribute around 10% to broadband internet development target. By
national GDP. China's GDP in 2017 was recorded at comparing the field focus of broadband internet
US$ 12.24 trillion while Indonesia's GDP was at US$ development in these two countries, it is known that
1.016 trillion. Table 3 also shows that economic China and Indonesia are very concerned about
activity in China is more varied and unique from the education, health, and economic development. For
aspect of the sector covered, especially sharing the government sector, China has started the
economy in the form of sharing bicycle while in implementation of broadband internet use, such as
Indonesia, transportation services can only be the availability of online payment facilities for
ordered via online transportation application. From government services. While Indonesia is currently
the financial activity sector, the maturity of financial still in the process of implementing the massive
regulations (including fintech) in China has led to the digital economy model. Government services that
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can be paid online are payment of motor vehicle, on e-commerce, and it does not yet any regulations
electricity, and water taxes. Interesting findings are in place oncerning fintech. This condition is caused
shown by the comparison of broadband internet by the fact that the banking authorities are still
development strategies. It is found out that both hesitant to implement massive online payments in for
countries appear to have almost same strategies. The everyday basis. Related to e-commerce regulation,
results inform that both countries are still Table 3 shows that the main regulations have
implementing subsidies for infrastructure regulated things that are considered crucial in e-
deployment. In Indonesia, this subsidy is intended as commerce activities. While the principle of this
a stimulus to encourage the maturity of the project regulations in Indonesia is still separated from that of
location and attract the involvement of the private e-commerce regulation, leaving them less focused.
sector. In addition, the two countries also encourage The table also shows that until today, Indonesia
the availability of low-cost services thus the services remains focusing on regulations for infrastructures
can be reached by the people's purchasing power. such as regional retribution and spectrum refarming.
Unfortunately, pricing is still running by business-to-
business model. It is still difficult to be intervened by CONCLUSIONS
government. Application development acceleration
Based on the results and discussion, it can be
and pilot projects creation are also established as
concluded that the telecommunication infrastructure
strategies in both countries. The difference is striking
supporting broadband internet and digital economy
that China has focused on infrastructure
regulation in China are more mature than
development while Indonesia still focuses on
Indonesia's. There is a huge gap between China's
capacity building. The Human Development Index
digital economy and Indonesia's. Even so, currently
by the United Nation places China at position 86 with
Indonesia is being very active in developing its e-
a value of 0.752, while Indonesia is at position 116
commerce. This effort may contribute to Indonesia's
with a value of 0.694. The Chinese Human Capital
promotion to enter the top five economy of 2050. To
Index is recorded at 0.67 while Indonesia is still at
realize it, the broadband internet development must
0.53. Comparison of item "challenge" reinforces this
be accelerated to support digital economy activities.
finding. The challenge facing China is the
In addition, Indonesia also needs to try engaging in
coordination of broadband networks at the regional
other digital economic activities for instance, fintech.
level while Indonesia still has to work hard to
In addition, the government must also provide its
increase the literacy of internet users thus, the
human resources with the knowledges and skills
development of broadband internet can be as
needed in digital economy, including artificial
expected.
intelligence, data analysis, and blockchain, because
Comparison of regulatory aspects shows that
human resource is also an important component in
regulations in China are very specific to support
the digital economy, in addition to infrastructure
broadband internet use for the digital economy. E-
development.
commerce and fintech regulations have been
prepared. Indonesia is still formulating regulations
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