On February 28th, 2019, China Internet Network Information Center (CNNIC) published the 43rd Statistical Report on Internet Development in China. The Report showed Internet development in China in 2018 from multiple aspects, including The Development of Internet Infrastructure, The Development of Internet Applications, The Development of Government Applications, The Development of The Industry and The Cybersecurity Administration.

Internet has been growing rapidly in China with seven characteristics.

1. Internet penetration rate was close to 60%, the threshold of Internet access has been further lowered.

Up to December 2018, China had 829 million Internet users, up 56.63 million over the previous year. The Internet penetration rate reached 59.6%, up 3.8 percentage points from the end of 2017. The number of mobile Internet users in China reached 817 million, accounting for 98.6% of the total netizen population.

In 2018, Internet coverage has been further expanded, network infrastructure in poor areas has been gradually improved, and the urban-rural Internet access gap has been eliminated at a faster pace. Mobile Internet fees have dropped significantly, cross-provincial roaming fees have been canceled. The threshold for residents to access Internet has been further lowered, and information exchange efficiency also has been improved.

2. Basic Internet resources increased steadily, IPv6 has board application scenarios.

Up to December 2018, China had 41,079 blocks/32 of IPv6 addresses, up 75.3% annually. China had 37.93 million domain names, among which the number of “.CN” domain names was 21.24 million and accounted for 56.0% of the total domain names.

In terms of IPv6, China has been continuously promoting the large-scale deployment of IPv6, further standardizing IPv6 address assignment and traceability mechanism, and effectively improving IPv6 security capacity, so as to promote the full-scale application of IPv6.

In terms of domain names, China’s domain name high-performance resolution technology continued to develop in 2018, independent intellectual property software development has made a new breakthrough, and the capacity for localizing and customizing domain name service security strategies has been further enhanced, thus the service and security capacity of China’s domain name service system has been greatly improved.

3. The first law in the field of e-commerce was issued, accelerating the transformation of e-commerce industry.

Up to December 2018, China had 610 million online shopping users, accounting for 73.6% of total Internet users, up 14.4% annually.

E-Commerce Law of the People's Republic of China, the first law in the field of e-commerce, was officially issued, which was of great significance to promote the sustainable and healthy development of the industry.

After years of rapid development, online consumer market gradually entered the stage of upgrading at both supply and demand sides, which formally has become a new driving force for the industry growth.

On the supply side, integration of online and offline resources has been accelerated, new modes such as social e-commerce and high-quality e-commerce have been constantly enriching consumption scenarios, and driving the transformation and upgrading of the industry. The in-depth application of big data, blockchain and other technologies has effectively improved operational efficiency.

On the demand side, the trend of consumption upgrading has remained unchanged, and consumption stratification features have become increasingly prominent, further promoting market diversification.

4. The habit of using offline payment continued to consolidate, the development of international payment market has been accelerated.

Up to December 2018, the number of China’s mobile payment users reached 583 million, accounting for 71.4% of mobile Internet users, up 10.7% annually.

The habit of using offline payment continued to consolidate, among the offline consumers, the number of those using mobile payment increased to 67.2 percentage points, comparing to 65.5 percentage points at the end of 2017.

In terms of cross-border payment, Alipay and WeChat payments have been legally connected in more than 40 countries and regions respectively. In terms of overseas localized payment, Chinese companies have been operating localized digital wallet products in 9 Asian countries and regions.

5. Internet entertainment began standardized development, the utilization rate of short video was close to 80%.

Up to December 2018, the scale of online video, online music and online game was 612 million, 576 million and 484 million respectively.

Online video platforms have been focusing on improving the quality of program content and refining self-made content.

Copyright cooperation among music companies has become closer, and the legalization process of digital music copyright has been significantly accelerated.

More and more game companies began to focus on overseas business, and China’s games have further expanded their influence in overseas markets.

The scale of short video users reached 648 million, accounting for 78.2% of all Internet users. As many Internet companies launching short video products, the market has become more mature, content production has been increasingly professional and vertical, high-quality content has become the core competitiveness of each platform.  

6. Adhere to the people-oriented concept, e-government service efficiency has been improved.

Up to December 2018, 394 million Internet users or 47.5% of all netizens received e-government services in China.

In 2018, China’s new form of "Internet + government services" has been developed in depth. Governments at all levels have promoted the integration of online and offline services on online government service platforms, by importing real-time information, including online declaration, online booking and examination result, to strengthen the construction of the unified and multilevel interconnected data sharing platform, realizing more data auto-running to reduce formalities.

At the same time, local governments have launched county-level media centers, including all media organizations such as county radio and television stations, county party newspapers and county-affiliated websites, which have been responsible for all information release services in the county, so as to concentrate resources, ensure unified management, provide high-quality information and standardized services, to better convey government information and serve the local people.

7. Emerging technologies have maintained a good momentum, making China stronger in network technology.

In 2018, China has gained momentum in basic resources, 5G, quantum communication, artificial intelligence, cloud computing, big data, blockchain, virtual reality, Internet of things, supercomputing and other fields.

In the field of 5G, core technologies development has made a breakthrough, and the government and companies have worked together to promote steady development in this industry.

In the field of artificial intelligence, the scientific and technological innovation capacity has been strengthened, and local plans and policies about effectively promoting the deep integration of artificial intelligence with economic and social development have been issued.

In the field of cloud computing, Chinese government has been attaching great importance to the development of the new generation of information industry represented by cloud computing, and companies have been actively promoting relevant strategics. Cloud computing services have been gradually recognized and accepted by Chinese market.

See the full report here (in Chinese only): The 43rd Statistical Report on Internet Development in China