2018 China Internet Development Summary

On February 28, 2019, China Internet Network Information Center published the 43rd edition of the Statistical Report on Internet Development in China (“Report”). The Report recapped the Internet development in China in 2018 from various aspects.

Continuously increasing Internet usage and penetration rate

As of December 2018, the number of Internet users has reached 829 million with a penetration rate of 59.6%, a 3.8% increase since the end of 2017. In 2018, internet service coverage got expanded, network infrastructure construction saw progress in the rural area, and the digital divide got smaller. Mobile data cost was reduced significantly, cross-province roaming charge was officially eliminated, and information exchange efficiency has been improved.

Promoting IPv6 deployment and network infrastructure development

China is continuing to promote the large-scale deployment of IPv6, further standardizing the IPv6 address allocation and traceability mechanism, effectively improving the IPv6 security capacities.

In terms of domain names, in 2018, new breakthroughs were made in independent intellectual property software research and development. Domain security was further enhanced, significantly improving the service and security support capability of China’s domain name service system.

E-commerce industry gets further regulated

In recent years, e-commerce industry has been growing steadily, and the transaction amount has topped 37 Trillion Chinese Yuan (approx. $5.5 Trillion USD) in 2018. As the market grows bigger, an e-commerce law was published on August 2018, which became effective on January 1, 2019, to further regulated to govern the healthy development of the industry.

On the supply side, online and offline resources are getting more integrated, and new business models such as social e-commerce and quality e-commerce continue to drive retail transformation. On the demand side, Chinese consumers continued to revamp their consumption habits, spending more on luxurious products despite a national economic slowdown.

Mobile payment continues to dominate in offline purchasing scenarios

While U.S. consumers are slow to embrace mobile payment methods at the adoption rate of merely 20%, the majority of Chinese consumers have skipped the credit card system and jumped right into using mobile payment technologies – 67.2% of internet users in China have used mobile payment methods as of December 2018. The two largest mobile payment technology providers, Alipay, owned by Alibaba, and WeChat Pay, owned by Tencent, have expanded their operations to more than 40 countries globally, influencing the global mobile payment landscape.

New technology development is on a steady track

The development of infrastructure, quantum information, artificial intelligence, cloud computing, big data, blockchain, virtual reality, Internet of Things and supercomputing were on the fast tracks in 2018. Breakthroughs were made in 5G technology research and development, scientific and technological innovation capabilities have been strengthened in the field of artificial intelligence, and local-grown cloud computing services have become strong contenders in the market competing shoulder to shoulder with global providers.

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