China's netizens estimated at 505m

China has seen its Internet population continue to grow as rapid urbanization has allowed more and more people to access the web, and concerns over cyber security have increased alongside the industry's boom.

The number of Internet users in China is estimated to have reached 505 million as of November 2011, up from 485 million at the end of June, the China Internet Network Information Center (CNNIC) said Wednesday.

The Internet penetration rate rose to 37.7 percent in November, up 3.4 percentage points from the end of 2010, according to a CNNIC report released at a conference in Beijing.

As of the end of November, the number of microblog users exceeded 300 million, jumping from 195 million by the end of June, the report said.

The rapid growth of China's Internet population, already the largest in the world, has spurred expansion in the country's Internet economy.

The value of China's Internet economy surged 72.7 percent year-on-year to 71.6 billion yuan (11.3 billion U.S. dollars) in the third quarter of 2011, according to statistics from the Shanghai-based Internet consulting firm iResearch.

Microblogging, electronic commerce and mobile payment services all continued to maintain a strong growth momentum in 2011, Gao Xinmin, vice president of the Internet Society of China (ISC), said at the conference.

New services and technologies are also taking off, with cloud computing expected to generate a market worth over 60 billion yuan in 2012, the ISC forecast.

China targets up to 2 trillion yuan in telecommunications infrastructure investment during the 12th Five-Year Plan (2011-2015) period and cloud computing is listed as a key project in the plan.

Meanwhile, web security has become an increasingly complicated issue with the expansion of the Internet industry.

There was increasing penetration of, and attacks on, China's Internet infrastructure as well as the information systems of key industries such as finance, transport, energy, customs, taxation and science and technology, Gao said.

Online phishing occurs frequently among financial sector websites, which have become a key target for fraud and privacy theft, he noted.

In the first half of 2011, 217 million Chinese Internet users, or 44.7 percent of the country's total online population, were attacked by malware, including viruses or Trojan horses, and 121 million had the experience of having their accounts hacked or passwords stolen, CNNIC data shows.

China's leading anti-virus software provider, Beijing-based Qihoo 360, claimed in late December that the personal information of more than 6 million users of the China Software Developer Network (CSDN), the country's largest programmers' website, had been leaked by hackers.

The case raised concerns about web security and triggered widespread panic, but a police investigation later found the leaks had been fabricated for the purposes of showing off, fraudulently obtaining money, promoting the company's web security products, or disturbing and disparaging a government move to demand real-name registration for microbloggers.

China faces an increasingly complex and grim situation in maintaining web security, and better regulation is urgently needed, Gao said.