China says Web users top US at 253 mln

The latest figure on Web use at the end of June is a 56 percent increase from a year ago, the China Internet Network Information Center said. It said the share of the Chinese public using the Internet is still just 19.1 percent, leaving more room for rapid growth.

The United States had an estimated 223.1 million Internet users in June, according to Nielsen Online, a research firm. The Pew Internet and American Life Project puts U.S. online penetration at 71 percent.

"This is the first time the number has drastically surpassed the United States, becoming the world's No. 1," a CNNIC statement said.

The communist government encourages Internet use for business and education but tries to block access to Web sites deemed pornographic or subversive. Web surfers have been jailed for posting or e-mailing material that criticizes communist rule or is deemed a violation of vague national security laws.

Beijing blocks access to Web sites run by dissidents, human rights groups and some foreign news media. Web surfers were blocked from seeing Google Inc.'s YouTube and other foreign sites with video footage of anti-government protests in Tibet in March.

That same month, the government said it would shut down 25 Chinese video sites and punish 32 others for violating new rules against carrying content that is deemed pornographic, violent or a threat to national security.

In financial terms, China's market lags those of the United States, South Korea and other economies. But online commerce, video sharing and other businesses are growing rapidly and have raised millions of dollars from investors.

The commercial boom has produced success stories such as games site Tencent.com and search engine Baidu.com, which are competing with foreign rivals for local market share. Baidu said Thursday its profits in the latest quarter soared 87 percent over the year-earlier period to 265 million yuan ($38.6 million).

Total revenues for China's Internet companies soared to 40.5 billion yuan ($5.9 billion) in 2007, up 48.6 percent from the previous year, the research firm Analysys International reported this week. It said revenues should keep growing at an annual rate of at least 30 percent in coming years, reaching 137.5 billion yuan by 2010.

By contrast, U.S. online advertising revenues alone in 2007 were $21.2 billion (145.2 billion yuan), according to a report by consulting firm PricewaterhouseCoopers for the Interactive Advertising Bureau.

The research firm BDA China Ltd. says China's online population should keep growing by 18 percent annually, reaching 490 million by 2012--a number larger than the entire U.S. population.

Internet companies are looking forward to a new growth spurt once Chinese mobile phone carriers roll out third-generation, or 3G, technology that can support Web-surfing and other services. No date has been announced, but with more than 500 million mobile accounts, China has a vast pool of potential wireless Internet users.

China's Internet boom has gotten a boost from a sharp slowdown in demand for fixed-line phones as more customers opt for mobile service. Fixed-line carriers have responded by expanding into broadband Internet, Web-based cable television and other services. The CNNIC report Friday said that as a result, 214 million Chinese now have high-speed access.

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On the Net:

Analysys International: english.analysys.com.cn/home/index2008.php