3.2 Overview of Electronic Commerce in China3.2.1 Internet in ChinaIn September 1987, China's academic network built the first national Internet email node and sent the first email from China . Universities were the first Chinese institutions to connect to the Internet. In 1990, many Chinese universities and educational institutions were connected, including the Ministry of Education. But substantial Internet growth did not occur until 1994, when the National Computing and Networking Facility of China project opened a 64K international dedicated Internet line, which achieved fully functional connection. After 1995, Internet adoption by universities and government organizations accelerated. When the China Internet Network Information Center released its first statistical report on China's Internet development in 1997, there were 299,000 host computers and 620,000 Internet users. But China didn't establish a comprehensive national cyber policy for the Internet until the 1990s; before then, the government mostly issued individual regulations to address individual issues. There was no doubt that the Internet has potential and that China's information-oriented promotion will reinvigorate the economy. This common understanding between government and industry was officially confirmed in the ninth five-year plan in 1997. In the same year, the Internet project was included in the agenda of restricting state information infrastructure by the State Council. In 2000, the central government reinforced this understanding and reiterated its plan to "drive industrialization through information, make better use of the advantages of information technology as latecomers, and achieve progress on social productivity... half of the paper...". .ine shoppingBeijing 754 340 45.1% 229 30.3%Shanghai 809 408 50.4% 330 40.8%Guangzhou 480 145 32.0% 119 24.8%Shenzhen 477 149 31.2% 113 23.6% Total 2520 105 0 41.7% 790 31.4%(Source: China Online Shopping Survey, China Intelli Consulting Corporation, May 2008) A survey conducted in four major cities shows that the penetration of C2C commerce, including the open market, was 31.4% in 2007. In these four cities, out of 7.9 million online shopping mall consumers, there were 5 million consumers in Taobao, 2 million on eBay EachNet. The frequency of shopping in Taobao is the highest, which shows that the open market is quite active in those big cities. Taobao and eBay EachNet currently dominate 95% of this market in China. Chart 3.8: Market share of C2C online shopping in China. (Source: China Online Shopping Survey, China Intelli Consulting Corporation, May 20084.