April 24, 2008 -- (WEB HOST INDUSTRY REVIEW) -- China has surpassed the United States to become the world's largest Internet-using population, reaching 221 million by the end of February, according to Chinese government data reported on Thursday.
The number of Internet users in China was 210 million at the end of 2007, only five million fewer than the US Internet users at around the same time, says the Xinhua news agency, reflecting China's explosive growth in web use despite government efforts to block access to material considered subversive or pornographic.
It is believed that China's web population should keep growing by 18 percent annually, reaching 490 million by 2012, a number larger than the entire US population, says Duncan Clark, chairman of BDA China, a Beijing technology company.
Despite the high number of Internet users, Xinhua says that China lags behind the US, South Korea and other markets in online commerce and other financial measures. But e-commerce, video-sharing and other businesses are growing quickly and companies have raised millions of dollars from investors, says Clark. He believes this area will continue to see growth and there will be a lot more opportunities for companies to tap into this.
The boom has produced Chinese success stories such as games site Tencent (tencent.com) and search engine Baidu (baidu.com), which are competing with foreign rivals for market share, says Xinhua.
Another key development has been video-sharing, a newly popular area where some sites say they get 100 million visitors a day, equal to the audience for the biggest state TV channels.
Clark adds that with the world's largest mobile phone market - at 520 million accounts - China also has a vast potential pool of wireless Internet users, making that another market that could be seeing growth in the near future.
This Internet usage boom in China has been making waves in the Web hosting industry as well with North American and European companies expanding their footprints into Asia. Since January, colocation provider Telehouse Europe opened a data center in Beijing and IT security solutions provider GlobalSign launched a new office in China.
The .asia top-level domain was also officially launched to the public on March 26, which has been seeing a considerable amount of attention from North American and European companies, according to DotAsia Organisation (dotasia.org), the registry operator of the .asia TLD.
The Xinhua report cited data from the government's China Internet Network Information Center. An spokeswoman for the organization says the agency will officially release a report later in in July.
