Hack attacks on major web sites in the United States and China this month have set off spirited discussions among China's information-watchers.

"The attacks tell us that our network is still vulnerable and it tells us that we have a lot of work to do," said an official from the Chinese Ministry of Information Industry.

The ministry is now busy making new rules to govern computer network and information security management. The development of security software has also been put high on the list of an information industry development plan.

In the past years, China has witnessed rapid development in its information industry. By the end of 1999, China had 8.9 million computers linked to Internet and the figure is expected to double this year.

But the country's network security technology drags far behind. A recent survey conducted by a security corporation shows that more than 90 percent of China's e-commerce web sites have security problems.

An official from the Ministry of Public Security also noted that the number of hacking cases is increasing in China at a annual rate of 30 percent. In 1999, the country dealt with several hundred hack attacks.

On or near February 8, when major web sites such as Yahoo and Amazon in the U.S. were temporarily shut down by hackers, China's Sino.com also faced a similar assault.

But the vulnerability of the Internet has also created a large market for security products. A new network software security system was developed recently at Xi'an Communication University. The system, entirely the brainchild of Chinese computer experts, has been approved by the Ministry of Public Security.

Foreign Internet security companies are also coming to the country. RSA Security Inc, a major international security software and consulting company, set up its first Chinese office in Beijing on Monday. Its security product, RSA SecurityID/ACE, has also been approved for sale in China.

Tom Schuster, RSA's vice-chairman in charge of global marketing, said that China is a very interesting and very important market for Internet security, as the country is developing so swiftly.

He predicted that by the end of this year, the demand for network security products in the country will increase by 100 percent.