The obstacles include high Internet access costs, restrictions on Internet services, lack of a nationwide credit card system, and slow and uncertain delivery.

These problems, some of them typical for developing countries, also encompass network insecurity and lack of awareness of the benefits of e-commerce and possible e-commerce strategies.

The suggestion came from a UN official at yesterday's issuing ceremony of the E-commerce and Development Report 2001, authored by the UN Conference on Trade and Development (UNCTD).

"Nonetheless, the outlook for Chinese e-commerce is good, especially after its accession to the World Trade Organization (WTO)," said Li Zhongzhou, deputy director of the Division for Services Infrastructure for Development and Trade Efficiency under UNCTD.

Li predicted China's commitment to liberalization in the telecommunication and financial services sectors "will spur e-commerce development."

E-commerce insiders said China's WTO entry will create more opportunities than obstacles, though some companies have been financially hurt recently.

"Most e-commerce companies in China have been established by entrepreneurs who have the knowledge experience of working in industrialized countries," said Jin Jianhang, vice-president of China's branch of Alibaba.com, a leading B2B online trade platform.

"The founders have already been adapted to international trade rules before the nation's WTO accession. What they must do is provide a tailored service for Chinese users."

Jin attributed the recent failure of some e-commerce companies to overstretching themselves financially.

Official statistics indicated the number of websites originating in China rose from 1,500 in 1997 to 242,739 by the end of June, according to China International Network Information Center. About 26.5 million Chinese people are now online, compared with approximately 620,000 four years ago.

China has 692,490 domain names, 159 million webpages and 45,598 online databases to provide product information, press releases, enterprise lists, governmental policies, laws and regulations.

Yet only a fraction of the records in the databases are updated regularly.

"We have achieved rapid development in recent years but concerns remain that the burgeoning medium is poorly maintained," said Zhao Xiaofan, vice-director of the State Office of Information Promotion. "So it is with e-commerce."

(China Daily November 22, 2001)