According to the latest government data, China now has 253 million internet users, due to recent sharp growth - 56 percent from last year. The inevitable has happened: China now has more internet users than the USA, which is at 223.1 million with 71% online penetration. The fact that the Chinese government is exercising very strict control and censorship over internet use has immensely slowed down the growth of internet use in this country, but when you’ve got a population of over 1.3 billion, even a relatively small fraction of it is enough to become a global leader.

Yes, the really amazing thing is the fact that the online penetration is China is mere 19.1 percent, way, way lower than the USA and most European countries. Financial facts are even more revealing: total revenues for all of China’s internet companies was $5.9 billion in 2007 while in the U.S. online advertising revenues alone in that same year were $21.2 billion. For companies such as Google, Microsoft, Yahoo and other giants, this means two words: untapped potential.

Research firm BDA China Ltd. estimates that China’s online population will keep growing by 18 percent annually - a modest estimation, considering that this growth was 56% this year - and reach 490 million by 2012. The US online market suddenly seems small in comparison. Due to strict Chinese government regulation of the internet, financially the Chinese market will not catch up as fast as it could, but with a little (inevitable) westernization and a little globalization it’ll get there, and every online firm will want a slice of the pie. This one growing market might be more important than most other world’s markets put together.

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