According to the ministry, China now boasts 120.6 million mobile service subscribers.

The United States has 120.1 million mobile users.

China's population of mobile phone users has been growing at around 5 million per month this year, MII spokesman Wang Lijian revealed.

Despite these numbers, however, China's mobile-related firms realize their job is not done.

At present, only 10 percent of the population use mobile phones, with most of them living in eastern coastal cities.

User rates in the United States and the western European markets are around 40 percent and 50 percent respectively.

The relatively low penetration rate in China makes the market very promising and has turned China into a battlefield for telecom equipment makers.

"The Chinese market is a shining star in the cloud of global economic downturn," said Jan Malm, president of Ericsson (China) Co.

Malm said China has become Ericsson's top market this year after being one of the top three in the last four years.

He predicts the market will become increasingly competitive in the coming years.

The country's two mobile telecom operators, China Mobile and China Unicom, have reported rapid growth in both subscriber numbers and business income this year.

Their combined performance of late has cast a shadow over fixed-line phone operators and experts predict mobile phones could outnumber regular phones in the near future.

"The mobile phone has become a strong rival to fixed-line business and mobile subscribers could surpass fixed-line users within the year," said Yang Peifang, a telecom expert with the Chinese Academy of Telecommunications Research.

China currently has 160 million fixed-line telephone users, most serviced by China Telecom.

But China Telecom's growth has slowed down and the company now makes less money than both of the mobile service providers.

The information technology industry, led by the telecom sector, has become a major contributor to the country's economy in recent years.

The IT industry output is expected to make up more than 7 percent of China's gross domestic product (GDP) within five years, according to a forecast by the State Development Planning Commission (SDPC).

The SDPC predicts that 40 percent of the Chinese households will have telephones and more than 95 percent of them will have access to TV and radio in five years.

Over the next five years, the output of IT service industries will grow by more than 30 percent annually, the commission has forecasted. In the same time, the number of Internet users will increase to more than 8 percent of the population, it says.

As average Chinese families are expected to spend a larger part of their income on information consumption, the penetration of information technology into daily life is to create 20 million new jobs over the next five years, according to the commission.

(China Daily 08/15/2001)