Internet economy 7% of China’s GDP

By Kou Jie Source:Global Times Published: 2015-10-30 1:03:01

China’s e-market surpasses US, becomes world’s largest

The Internet has become a critical element of China's economic progress in the past five years, accounting for seven percent of the nation's gross domestic product (GDP) in 2014, a percentage point higher than the US, a report said Thursday.

Issued on Thursday by the China Internet Network Information Center (CNNIC), the report said that China has also exceeded the US to become the world's largest online retail market. Its online retail transactions reached 2.79 billion yuan ($439 million) in 2014, one of the key economic achievements of China's Internet development during the 12th Five-Year Plan period (2011-15).

"China has followed the world's trend to become a leader in e-commerce thanks to its favorable policies and competitive enterprises," Qin An, a cyber-security expert at the China Institute for Innovation and Development strategy, told the Global Times.

According to CNNIC, there are so far 328 listed Internet companies in China, whose total market cap reached 7,85 trillion yuan, accounting for 25.6 percent of the nation's market capitalization. Four of them have made their way to the top 10 world Internet companies, including Alibaba.

In 2014, the number of online shoppers climbed to 361 million, representing 55.7 percent of the nation's shoppers. Online shopping represents 20 percent of all consumer demand, the report said.

For the first time, the report said that mobile phones have become the most commonly-used platform to access the Internet, followed by computers. Some 594 million people in China can access to the Internet through mobile phones. The number is 86.8 percent higher than in 2005-10.

The Internet also boosted growth in related industries such as smart phones, servers, storage and Internet infrastructure, the report added.

E-commerce was able to thrive in China because it was from the beginning competitive with its Western counterparts, whereas the nation's traditional retail businesses are not as developed as those in the West, according to Wang Xiaoxing, an industry analyst from consultancy Analysys International.

On cyber security, the report noted that China has issued 76 regulations and documents relating to cyber security, over 2.6 times of that of 2005-10, while many special operations have been carried out to regulate the Internet, including a crackdown on pornographic and violent content.

China remains a key victim of cyber attacks despite all the measures in the 12th Five-Year Plan period, which have failed to meet the expectations, Qin said.

Qin added that a better guarantee on the development of an industry aiming to protect Internet security should be listed as a national strategy.
Newspaper headline: E-commerce 7% of China’s GDP

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