Online chinese giant is awakening

China recently reported an online population of 450 million users. That is the largest online population in the world as Dr Miyazaki said in his Blog is more than the entire US population. After reading all this I started doing some research because as it the world’s second economy after the US and still is a developing country. It sounds like is the perfect place to invest in an online business.

Youku and Tudou online video websites that stream video clips to millions of Chinese users. Their main source of revenue is advertising. Both companies’ revenue for the first month last year was around $34 million.

According to Bloomberg “China is regarded by investors as the top investment market in 2011”. Foreign investment in China rose 25% in April last year, 7% of the apparel market is sold online compare to 11% in the US. Moreover, 25 Chinese companies have gone public since June last year, China’s IPOs of online business are soaring according to this WSJ article. China’s potential is huge!.

However this whole Chinese Internet boom eventually may have limitations like the limited Chinese’s purchasing power, government Internet regulations and bans, and I don’t know if Chinese population is prepared for globalization due to the spread communist ideology in the country. Thus, I don’t know if US should feel threatened by China’s Internet boom, at least in the short term.