Several Issues on the Network Economy and Economic Governance Wu JiaPei (Senior Follow and Vice President of China

Information Industry Association) Abstract The article divided into six parts. The first part titled the implication of network economy indicates that network economy can be divided into narrow sense and broad sense. There are different three layers of macro, messo and micro level. It illustrated the development of network economy on messo level in both America and China, emphasized the diffusion and penetration of the network economy, considered that the people should dynamically cognize and master the network economy, described the similarities and differences between the concepts of network economy, information economy, digital economy, knowledge economy, new economy, etc. The second part titled the characteristics and factors of network economy indicates that there are seven characteristics for the network economy. They are as follows, 1. All time operation; 2. Developed with the globalization; 3. Can be run in virtual world; 4.The Roles of middle level are weakened; 5. The competition and cooperation are co-existed; 6. The velocity determined critically; 7. The close combination between technical innovation and institutional creation. It described six main factors which played greatly important parts in the development of the network economy. They are as follows, 1. More's Law; 2. Matcalfe Law; 3. Matthew's Law; 4. The scope of increasing rule of marginal effect is enlarging; 5; Pursue a special exciting mechanism for monopoly operation in a certain period; 6. Adopt virtual and real measures simultaneously, combine old and new ways together. The third part titled the network economy bring about challenges and opportunities for China. What we should deal with for challenges are as follows, 1. Prevent to widen the "digital divide" between developing countries and developed countries; 2. Safeguard the network security and information security and corresponding the financial security and economic security; 3. To make an effort to go forward, not fall behind in the adjustment and enhancement of the global industrial and economic structures. In terms of opportunities, 1. To carry out spanning development by later advantages; 2. Increase competitive capacities through information exchange and share; 3. Strive for profits in rearrangement and optimal allocation for production factors in global scope, stress to change the challenges into opportunities, really make the network economy as a historical opportunity for the Chinese economy moving towards the globalization and modernization. The fourth part titled the impact of the network economy on economic governance. It illustrated that although to reorganize the present economic order is important. It also indicated that the essential source is on regulating the economic behaviors of various beneficial bodies through draft rules and make institutional systems. On the earth, the later economic governance is a beneficial balance problem. The paragraph analyzed two different kinds of economic governance ways based on both the personal relationship and legislation respectively, and the inevitability of the former one changed into later one. Meanwhile, it explored how to further promote the development of economic governance along with rising network economy, stressed the follow up new relationship change between government, enterprise and market. The fifth part titled the role of government in economic governance. It considered that government plays an important role regulating economic behaviors of different beneficial bodies by policies, regulations, rules and systems, and indicated that government itself has to possess following six conditions: 1. Plenty flexibility's; 2. Seriously responsible for the public; 3. Respect the choosing right of consumers; 4. Realize governmental informatization; 5 Do innovation in the reform; 6. Pay attention to the achievement and its inspection. Listed the corresponding strategic measures which the government should adopt, for example, 1. Reorganize and rebuilt the governmental departments in order to increase their emergency reacting capacities; 2. Strengthen traditional and new emerging infrastructure construction; 3. Increase the investment for R&D and E&T; 4. Speed up the development off the Internet

and expand the information provided to public; 5. Increase the government efficiency and adopt cooperative network. The sixth part titled China should make a contribution to the world economic governance. It indicated that the global economic governance is more sophisticated than the state economic governance, it involves the beneficial cooperative problems between the states with different sovereignties. It considered that the development of network economy would definitely bring about the exchange and coordination between various national economic governance. Therefore, it is more important to rely on the functions of UN and other international organizations, meanwhile, the regional groups would also speed up drafting relevant rules in economic cooperation. Emphasizing the new international economic orders with justice has been put forward, so the Chinese leaders call on that all countries should have equal right to take part in the world economy decision making and rule drafting, and definitely put forward corresponding propositions.