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Internet industry helps keep Chinese economy steady

By Chen Limin (China Daily) Updated: 2013-01-17 13:54

China's booming Internet industry has helped the country counter the global economic crisis in recent years, an industry association official said.

Gao Xinmin, vice-president of the Internet Society of China, said during an industry forum in Beijing on Wednesday that "the industry has become an important way for China to ease the effects of the economic crisis".

Total revenues of the industry are estimated to have been 450 billion yuan ($72.4 billion) last year, an increase of 32 percent from a year earlier, he said.

Internet industry helps keep Chinese economy steady
 
Amazon.cn's booth at a trade show last year in Shanghai. [Photo / China Daily]

The number of China's Internet users rose to a record 564 million by December, more than four times Japan's total population in 2011. With the increasingly large Internet population, Internet services such as online shopping, online advertising and online games have become increasingly popular, transforming the huge number of users into revenues.

Chinese listed Internet companies saw their profit margins increase by 33.7 percent, and revenues by 32.8 percent, over the past year. The figures are higher than those of the top 30 Internet companies in the world by market value, which registered a 13.5 percent rise in profits and 27 percent rise in revenues on average, Gao said.

Oliver Barron, head of NSBO, an investment bank with offices in London and Beijing, said the Internet industry will play a bigger role in China's economy.

However, it is still too early to say how much it has boosted the country's economy, he said.

China's GDP was 47.2 trillion yuan in 2011, and according to the government's full-year target of a 7.5 percent growth rate, which is due to be announced this Friday, is likely to have reached 50.74 trillion yuan last year.

That means the Internet industry is the source of 0.9 percent of the total GDP in China.

Barron added that in the past two quarters, the property sector was the real booster of the country's growth, which has been affected by a shrinking demand from overseas markets for its exports.

Outside China, Internet companies continue to drive growth and job creation in the IT industry, according to a report from the Organization for Economic Cooperation and Development in October.

The top 250 companies in the information communication technology sector by revenue boosted employment in OECD countries by 4 percent in 2010 and 6 percent in 2011, the report said.

The IT services industry bucked the 2009 economic downturn better than manufacturing, and rebounded in early 2010, the report said.

chenlimin@chinadaily.com.cn

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