Internet industry optimism to buoy China's economy?

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Internet industry optimism to buoy China's economy?

(Xinhua) 16:06, August 17, 2013

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At the 2013 China Internet Conference in Beijing, you felt like you had been teleported into a bazaar.

Salespeople lined the entrances handing out business cards and flyers; pretty showgirls in miniskirt with engaging smiles touted their products. Wandering through the maze of little booths that sprawled over two floors, you were bedazzled by colors and deafened by the noise.

This is a snapshot of China's Internet industry: noisy but full of vitality. The annual get-together of Chinese Internet names big and small that concluded Thursday was a feverish with economic optimism, despite the chill of the country's slowing growth.

Will this sizzling sector heat up China's cooling economy?

"Internet-related consumption of information products and services together with e-commerce are becoming the two biggest drivers of China's economic growth and restructuring," said Liang Chunxiao, vice president of the country's top online trading platform Alibaba Group.

He predicted that online retail revenues would account for more than 16 percent of China's total social sales in 2020 when the aggregated e-commerce volume exceeds 28.8 trillion yuan (4.7 trillion dollars).

"E-commerce will boost related sectors such as logistics and raw materials, and help release the consumption potential in many remote areas," Liang added.

China's Internet economy will take up 6.9 percent of its GDP in 2016, up from 5.5 percent seen in 2010, according to a research report by the Boston Consulting Group last year.

The boom of mobile Internet, marked by the popular use of smartphones and tablets across the country, might drive the industry at an even faster pace.

China's Internet users reached 590 million in the first half of this year, and 80 percent use their smartphones to go online. More people are recognizing the opportunity to tap into China's huge consumer market.

Home appliance retailer Suning, footwear manufacturing Xtep and commercial real estate developer Insite Space, businesses that used to seem unlikely to make an impact on the digital world, all participated in the Internet Conference. Everyone is jumping on the bandwagon.

"The next generation Internet will definitely transform conventional industry. Those who don't embrace it quickly enough will be washed out," said Lyu Zaifeng, executive director of Consumer & Small Business Services at Lenovo Group, the world's top personal computer maker.