25 January 2007

China's growing internet population may soon overtake the US

China's rapidly growing internet population reached 137 million users by the end of last year, according to a report by the China Internet Networks Information Centre (CNNIC). This figure represents 10.5 per cent of China's population, as well as signifying a 23.4 per cent year on year increase in internet use by the Chinese.

A report by JP Morgan earlier this month forecasted that, at current rates, the United States will continue to be the largest internet user worldwide until at least 2010. However, the CNNIC contradicts this, predicting that within as little as two years China will overtake the United States as the largest internet user in the world.

The rate that internet use is growing in China has consistently beaten the projections of external analysts. Now that internet penetration has reached 10 per cent, the web can be seen as a mainstream medium in China - and the growth rate is predicted by the CNNIC to increase even more in the next few years. Furthermore, the growth of China's internet population could get an extra boost when 3G mobile phone services are introduced in the country, allowing China's 461 million mobile phone users to search the internet while on the go.

Following the exciting findings of this report, Chinese Communist Party Chief, Hu Jintao, announced a vow to 'purify' the internet for the Chinese people. Mr Hu spoke of the need for the state to retain the control it has on how its people use the internet whilst utilising the web's economic potential, promising to "ensure that one hand grasps development while one hand grasps administration."

Although the issue of censorship was not mentioned explicitly, this is sure to be a hot topic of conversation across the globe as China continues to solidify its status as one of the key players in the internet world.

The Chinese Ministry of Public Security retains very strict control of what internet content is made available to its citizens, as a result of a project known officially as Golden Shield - or affectionately termed the Great Firewall of China. Censored content includes sites that belong to outlawed groups, news sources that cover taboo subjects, such as Tiananmen Square, or sites that are deemed 'subversive', such as the BBC website.

This raises some interesting issues for Western internet companies looking to expand into China. On one hand, there is a huge market in China and the government is looking to exploit the economic use of the internet. On the other hand, the strict control of internet use may come as a shock to the usual business practices of companies that are used to working in countries with a more liberal approach to the internet.

The effects of this can be seen in countries that have already entered the Chinese market. Google, for example, has attracted international criticism for agreeing to censor content on its Chinese portal. Recently, Microsoft teamed up with the leading Chinese language search engine, Baidu, to develop applications and display Baidu's paid search advertisements on Microsoft sites in China. But, like Google, Microsoft has also had to submit to a level of censorship to operate in the country.

It will be interesting to see whether China can achieve the control it desires over the internet when the number of web users in the country is increasing at such a rapid rate. Furthermore, how will the barriers set by the Chinese government affect the way that search engine marketing campaigns are run? The answers are yet to be seen, but promise to be fascinating.