Chinese netizens for the first time last year out-shopped their East Asian counterparts in percentage terms, good news for Chinese Internet companies.

A spurt in online shoppers, as a new study shows, also demands full attention from Chinese policy-makers, who are resolved to substantially boost domestic consumption.

In pursuit of balanced and sustainable development, the Chinese authorities have made it one of their top priorities to significantly enlarge the contribution of consumption to economic growth this year.

Now, a thriving e-commerce sector is presenting itself as a promising source of consumption growth, a sector the country could make far better use of.

A study released by the China Internet Development Research Centre under the Chinese Academy of Social Sciences found that e-commerce sales in this country soared by 58 per cent year-on-year to a record 553.1 billion yuan (US$68.7 billion) last year. And the turnover of the consumer-to-consumer market, worth 13.5 billion yuan (US$1.7 billion), tripled in just one year.

Many enterprises that have established an e-commerce presence in the domestic market over the past few years have begun to garner sweet fruits.

Thanks to its 1.3-billion population, China's online tribe is massive and expanding steadily. The number of domestic Web users grew by 18 per cent in 2005 to 111 million, ranking second largest in the world.

Yet, lack of a fast and safe way to pay online has long kept e-commerce away from most Chinese netizens' agenda. It is a firm belief of many Chinese Internet companies that when the market matures, netizens' online buying power will skyrocket.

Clearly, Chinese Web users are warming up to the idea of online shopping. As the study shows, more than 71.3 per cent of Chinese netizens had shopped online by the end of last year, while the average stood at 70 per cent for the Asia-Pacific region.

Increased consumer choice was surely one reason behind the spurt in online shopping. The number of items available online has exceeded 60 million in China.

A number of Internet companies' efforts to secure and streamline online payment has also contributed to the e-commerce boom.

Nevertheless, it is too early to assert that this market has definitely taken off.

Just four months ago, the People's Bank of China, the country's central bank, issued a guideline to ask domestic banks to put a lid on the maximum electronic payment amount in a single deal. The central bank made it clear that such a restriction on online transactions was to guard against the risk of online fraud.

Cyber security problems are rising with the rapid growth of e-commerce and wide use of electronic payment.

For the moment, the defensive measure the banking authorities adopted might be necessary to create a basically safe environment for e-commerce. But in the long run, such a limit on online payment will hinder fast growth of the market.

Hence, a secure and standardized payment system is urgently needed to maintain the robust growth momentum domestic e-commerce has displayed.

Whether for enhancing cyber security or better tapping a new consumer market, the Chinese Government has a huge stake in providing a sound market environment for e-commerce.