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China's online transactions are expected to reach 1 trillion yuan (US$124.9 billion) this year, a sharp rise from last year's 700 billion yuan (US$87.4 billion), said a report released yesterday.

 

China's e-commerce transaction volume has grown by 50-60 percent over the past couple of years and is expected to maintain fast growth for several years to come, said the report released by China Center for Information Industry Development Consulting Co Ltd (CCID Consulting).

 

The number of Chinese netizens has surpassed 110 million and more than 40 million personal computers have access to broadband. "It means China's infrastructure is ready for a boom in e-commerce," said Chi Congbing, analyst with CCID Consulting.

 

Small and medium-sized companies will soon make up the majority of companies conducting e-business, she said.

 

Statistics with CCID Consulting show that 99 percent of China's 31 million companies are small and medium-sized, yet only 800,000 of them made deals over the Internet.

 

Chi believed they will begin to use e-commerce over the next couple of years, Chi said.

 

According to the report, over 3 million small and medium-sized companies will choose online transactions and their investment in e-commerce will rise by 35 percent every year to 100 billion yuan (US$12.49 billion) in 2010.

 

Despite the great potential, CCID Consulting President Huang Yong warned that China's e-commerce still faces challenges stemming from a lack of policies and a credit system.

 

(Xinhua News Agency July 19, 2006)