Chinese internet users reach 289 million

The number of Chinese internet users has reached 298 million, according to the China Internet Network Information Centre (CNNIC). 270 million of these have access to broadband.

The total is more than any other country worldwide, including the US. While the speed that new users are joining the web has moderated in the current economic slowdown, it is expected to increase by another 20-30% in 2009.

The demographic profile of China's internet users is striking, with approximately 70% in the 10-29 year age bracket. Many of these users have no siblings as a result of China's ‘One Child' policy, and, as a result, spend a significant proportion of their social time online.

Charlie Awdry, manager of the Gartmore China Opportunities Fund, believes that there is considerable potential for web-based services in China. "The internet is a major source of news in China, far more important than traditional outlets like newspapers. It is also a well-established medium for social networking. Asians have used Facebook-type networks for some time, well before they arrived in the UK. The demographic profile of internet-users is interesting and is attracting lots of interest from advertisers. It offers a route to target young consumers very efficiently."

The technology sector has outperformed the broader MSCI Emerging Markets Index, and the MSCI Zhong Hua Index in China in the year to date. The Gartmore China Opportunities Fund is overweight technology stocks, with the internet portal operator Tencent and the online media company Sina Corporation contained within the portfolio. Tencent controls the largest instant messaging platform in China known as ‘QQ', with 355 million registered user accounts. Latest results show net profit up 74% on an annualised basis in the third quarter, helped by revenue from online games and advertising. Sina is one of China's leading media companies, offering online news and content, mobile value-added services, and online shopping. Online advertising spending is forecast to rise significantly faster than spending on other forms of media in 2009.