Statistical report on Internet development in China(January 2018)

Trends and Features

As of December 2017, the total number of domain names in China decreased by 9 percent compared to the end of 2016. However, the total number of ".CN" domain name achieved a 1.2 percent growth, reaching 20.85 million. The proportion of ".CN" domain name increased from 48.7 percent at the end of 2016 to 54.2 percent. The international gateway bandwidth achieved a 10.2 percent growth, up to 7,320,180 Mbps. In addition, the construction of infrastructure, including cable, network access point, base stations for mobile phones and Internet data centers was steadily put forward. On this basis, the use of web sites and web pages, data flow on mobile Internet and APP quantity developed rapidly, all of which increased significantly in 2017. Especially the data flow on mobile Internet has been doubled for three consecutive years since 2014.

As of December 2017, the number of netizens in China reached 772 million, and the Internet penetration rate reached 55.8 percent, which was 4.1 percentage points higher than the global average (51.7 percent) and 9.1 percentage points higher than the average level in Asia (46.7 percent). In the year the number of new Internet users in China was 40.74 million, and the growth rate was 5.6 percent. The scale of Internet users in China continued to grow steadily. Its driving force was the innovation of Internet business modes, the integration of online and offline services, and the putting online of public services. The rapid spreading of information service, the poverty alleviation through the Internet and the improvement of public service have enabled the masses to share and take part in the development of the Internet.

As of December 2017, the netizens using mobile phones to access the Internet in China reached 753 million, and its proportion in the total netizen population increased to 97.5 percent from 95.1 percent in 2016. At the same time, the proportion of netizens using television to access the Internet also increased to 28.2 percent, up by 3.2 percentage points. The utilization ratio of desktop computer, laptop and tablet computer all declined. The use of mobile phone has constantly squeezed the use of other devices to access the Internet. Intelligent devices represented by mobile phones have become the foundation of “connecting all the things". Vehicles and home appliances able to be connected to the Internet have promoted the upgrading of "traveling and living experience", and enhanced the personalized and intelligent application scenarios. The enrichment of mobile Internet services, and the expansion of mobile terminals and mobile data, have enabled the mobile Internet industry to create higher value.

The scale of mobile payment users in China continued to expand, and their using habits were further ingrained. The proportion of netizens using mobile phones to pay online bills while doing offline consumption increased from 50.3 percent at the end of 2016 to 65.5 percent. The mobile payment mode gradually became popular among netizens in rural areas. The proportion of rural netizens using mobile payment increased to 47.1 percent from 31.7 percent at the end of 2016. The scale of Internet users in China buying online financial products reached 129 million, with a year-on-year increase of 30.2 percent.

The online financial scale of monetary fund maintained a rapid growth. At the same time, the regulations on P2P and the enforced supervision have greatly promoted the orderly development of the industry.

In 2017, the scale of online entertainment users maintained a rapid growth. Strong market demands, policy incentives and guidance, and enterprise resources have jointly pushed the online entertainment industry to enter a boom time. Among all the online entertainment applications, the annual growth of live webcast users was the highest, reaching 22.6 percent. Among the live webcast users, the growth rate of live game users was 53.1 percent, and that of live reality show users was 51.9 percent. At the same time, the content of online cultural entertainment was further standardized. The revenue of the online entertainment industry, represented by online games and videos, further increased.

Considerable industrial revenue has promoted online entertainment producers to increase support for content creators, paving the way for the prosperity of the online entertainment content.

The sharing economic business, based on third party information platform and integrated social resources to provide services to users, flourished in 2017. Data showed that, in terms of travel efficiency, the efficiency of "sharing bicycle + subway" mode was 17.9 percent higher than that of private car mode; in terms of energy conservation, sharing bike users rode more than 29.947 billion miles, reducing carbon emissions by more than 6.99 million tons; in terms of stimulating employment, the bike sharing industry created more than 30 thousand offline operation and maintenance jobs. At the same time, the scale of sharing bicycle users increased fastest among all kinds of applications in the second half of 2017. The scale of domestic users reached 221 million, and this application has also been used in 21 overseas countries. Regarding online car hailing services, since the Interim Measures on the Management of Online Taxi Hailing Service was implemented, detailed rules in local areas have been issued to adjust the market access, and enterprises have been looking for transformation and cross-industrial integration to enhance profit, such as cooperating with travel and recruitment companies and sharing customer resources for cross-industrial marketing.

In 2017, the scale of e-government service users in China reached 485 million, accounting for 62.9 percent of the total Internet users. The utilization ratio of Alipay or WeChat civic service platform to access government services was 44 percent. The development of online government services was speeded up and the utilization ratio increased significantly. Because of the integration with big data and AI technology, government services have been more smart, precise and scientific. The service scope of new media and platform in government, such as WeChat civic service and government WeChat accounts, micro-blog accounts and headlines, has been continuously enlarged. Many kinds of civic service, such as traffic violations, meteorology, society information and payment for living costs, have been put online and improved, and also expanded to cover counties.

In 2017, the sectors such as e-commerce, online games and Internet advertising developed very well, and the corresponding growth rate of revenue in each sector was more than 20 percent. For example, the income of e-commerce platforms was RMB 218.8 billion from January to November, with a year-on-year increase of 43.4 percent. The driving force of the rapid growth was the continuous innovation on the modes of e-commerce service, technology and empowerment. The industry of online games increasingly focused on mobility, internationalization and competitiveness. The market of Internet advertising became mature, and the market structure became more stable.

As of December 2017, the number of Chinese listed Internet companies both at home and abroad reached 102, with a total market value of RMB 8.97 trillion. Among them, the market value of Tencent, Alibaba and Baidu accounted for 73.9 percent of the total. The proportion of companies
conducting business on online games, e-commerce, culture and media, Internet finance, and software tools accounted for 28.4 percent, 14.7 percent, 10.8 percent, 9.8 percent and 5.9 percent respectively of the total number of listed Internet companies.

As of December 2017, the total number of Unicorn Internet and IT enterprises in China was 77. The proportion of such unicorn enterprises located in Beijing was 41.6 percent, and that in Shanghai was 23.4 percent. Such enterprises were also located in Hangzhou, Shenzhen, Zhuhai and Guangzhou. Among them, the proportions of e-commerce and Internet financial enterprises accounted for 18.2 percent and 15.6 percent respectively of the total unicorn enterprises, taking a significant position. The other unicorn enterprises focusing on cultural entertainment, vehicles and traffic, intelligent hardware,
online health and AI also achieved rapid development. Specifically, since the Development Plan for AI in a New Era was issued and provided top-level strategy for the development of AI, China has made great progress in this field. As of June 2017, the number of AI enterprises in China reached 592, accounting for 23.3 percent of the global total. In 2016, the number of Chinese patent applications related to AI reached 30,115 cases.

The implementation of Cyber Security Act of the People's Republic of China and the publication of relevant rules and regulations in 2017 provided practical legal guarantee for the cyber security work. The government and enterprises jointly combat with all kinds of cyber security risks, and the proportion of Internet users having experienced cyber security incidents declined significantly. Data showed that up to 47.4 percent of Internet users said that they had not encountered any cyber security problems in the past six months, up by 17.9 percentage points from 2016.