By  Cai Mingzhao 

Vice Minister of the State Council Information Office

Honorable Guests, Ladies and Gentlemen,

A year ago, we held the first successful US-China Internet Industry Forum in Seattle. We reached consensus at that forum that a mechanism should be put in place to facilitate exchange and cooperation between the Internet industries of the two countries. Now through our joint efforts, we are gathering here today in Shanghai, China, for the second forum. To me this signifies recognition of the Forum as an established mechanism for exchange and cooperation.

2008 has been an extraordinary year for China. We suffered riots in Lhasa on March 14 and then a major earthquake in Sichuan on May 12. We also successfully hosted the summer Olympic Games and the Paralympic Games in August and September. The Internet has played a key role in all of these highly significant events.

Over the week following the Lhasa riots, on five websites -- sina.com.cn, sohu.com, NetEase, China.com and Tencent alone -- more than 70 million Internet users wrote comments and blog articles and posted video clips, expressing patriotism, and opposition to violence and terrorist acts. The Internet provided a platform to unite a powerful expression of opinions in support of justice and unity.

At 10 am on May 14, during a crucial phase of the rescue effort for earthquake victims in Wenchuan, a Sichuan girl named Zhang Qi posted an online message: The hilltop at Qipangou Village, 7 km from the county seat of Wenchuan, is a very good landing area. Her message was re-posted on different websites more than 2,000 times within a few hours, and succeeded in attracting the attention of the Earthquake Relief Headquarters. It was this message that enabled the rescue team to secure a successful landing-site in Wenchuan, and their timely intervention saved many lives.

During the Olympic Games, Chinese news websites released over 200,000 pieces per day of Olympic-related news and information, or an average of 130 pieces per minute. Many ordinary citizens used blog sites, podcast sites and instant messengers to record online what they had seen and heard, along with their thoughts and feelings. Each in their own way paid tribute to the Beijing Olympics. Ye Jiating, for example, is a young disabled man from Wenzhou in southeast China's Zhejiang Province. He recorded wonderful moments from 44 Olympic events with his camera. His work has been shared on several hundred websites.

The year 2008 has also witnessed striking changes in the rapid development of China's Internet industry.

Firstly, e-commerce has boomed. In 2007 national e-commerce turnover reached 2.17 trillion yuan, a 90 percent rise over 2006. The number of online shoppers had reached 63 million by the end of June 2008, a growth rate of 36.4 percent within a period of six months. The Ministry of Commerce has forecast that 70 percent of trade turnover will be done through online transactions in the coming decade, and that e-commerce will become the standard commercial economic model.

Secondly, wireless Internet services have been developing rapidly to share the market with wired Internet. Thanks to the development of mobile Internet technologies, the Internet is now accessible to more people via their mobile phones. At present China has more than 84 million mobile Internet subscribers who make up one-third of the country's total Internet users, an increase of 66.7 percent from the previous year.

Thirdly, more end-users have joined the generation of online content providers. Web 2.0 service is extremely popular among Chinese Internet users, igniting their creative enthusiasm. User created content (UCC) and user created applications (UCA) are now key features of the Internet's development in China. Last year I told friends attending the forum in Seattle that we had over 40 million blog sites, and today the number is 107 million. About 42 percent of Internet users are writing blogs, thus greatly enriching online content.

Fourthly, the urban-rural "digital gap" is narrowing. We are witnessing a rapid growth in rural Internet users, who now number more than 74 million. The figure accounts for a quarter of the national total of Internet users. It represents a 70 percent increase from last year, much higher than the 38 percent growth rate in cities. At least 97 percent of Chinese towns and townships now have access to Internet, and 94 percent of them have broadband. More and more farmers in remote villages are improving their family's fortunes with the help of Internet.