China's Internet economy upbeat

China's Internet industry has seen robust development despite the global financial crisis. At this year's China Internet Conference in Beijing, the industry's largest annual gathering, participants are quite optimistic about future development.

Many Chinese Internet companies experienced the dot-com bubble burst in 2000. Skeptics began to ask whether the Internet economy was as rosy as it had earlier seemed.

Now a decade later, as the world reels from the global financial crisis, China's Internet economy is showing not only enough confidence to withstand risks, but also substantial profits.

The industry no longer relies on advertising as its major revenue source. Instead, it has seen various new business models emerge.

Yu Yongfu, CEO of UCWEB, said, "China's Internet industry saw a substantial increase in user demand in all sectors. Online searches, e-commerce, news portals all delivered outstanding financial reports. In addition, the industry also saw a more mature market chain. "

E-commerce for example, accounted for 10 percent of China's overall retail sales in 2008. And it keeps expanding and evolving. The country's largest telecom operator, China Mobile, is launching a cell-phone payment system based on mobile Internet technology.

Staff of China Mobile said, "The service allows users to use their mobile phone to buy items and pay bills.. just like a bank card. All ordinary purchases can be done with your phone. You don't have to take your wallet with you any more."

Such creative services are based on the wide acceptance of the Internet and maturing consumer habits. In this regard, China is one of the fastest-developing countries.

Hu Qiheng, chairman of China Internet Association, said, "China's Internet penetration rate exceeded the world's average level for the first time this year. Many online services and business models are well accepted by consumers. "

The industry recorded 150-billion-yuan in sales in 2008. And it has created an additional 200-billion-yuan in related sectors, such as IT, manufacturing, software, and digital content. And with the 3G era upon us, the industry has an even greater potential to nurture new growth points.

Hu Qiheng said, "Mobile Internet is the future trend. It is expected to help with the creation of new business models, and new services. Innovation is highly required. There is a huge amount of opportunities. "

But the industry is a highly-competitive one, because of its comparatively low entrance barrier. Dot-com companies are emerging and dying nearly every day. Industry insiders say with the launch of the GEM board in China, the industry will get more momentum in its development.