E-commerce, dubbed as the "new engine" of growth, is helping China sustain its foreign trade at a time when the nation's exports and imports have been decelerating for months, said Vice Minister of Commerce Jiang Yaoping.

During a press conference on China's E-commerce Report 2008-2009, he said China's e-commerce industry will grow "at a high speed" in the coming years and the nation is soon expected to overtake Japan as the world's third-largest nation in terms of value of e-commerce transactions, given that e-commerce is gaining recognition nationwide.

"Besides helping enterprises tap new markets, reduce costs and cope with the financial crisis, e-commerce also plays a bigger role in assisting China to stabilize exports and stimulate domestic demand," said Jiang.

While demand from developed regions such as North America, European Union, Japan and South Korea remains sluggish amid a weak global economic recovery, he said China's manufacturers and exporters are shifting to emerging markets such as the Middle East and Latin America to tap into new growth via e-commerce.

China's export growth eased off for three consecutive months since May and imports saw a decline for five straight months. However, the slowdown would be sustained in the coming months of the year, said a spokesperson from the Ministry of Commerce.

China's e-commerce has grown rapidly during the financial crisis. In 2008, Internet sales grew by 44.8 percent from a year earlier to 3.14 trillion yuan (US$461 billion), and in 2009, it rose to 3.83 trillion yuan with a 21.7 percent growth, according to the report released by the ministry.

E-commerce growth accelerated in the first half of this year. E-commerce transactions reached 2.25 trillion yuan between January and June this year, said a recent report by China e-Business Research Center.

The State Council Information Center predicted recently the nation's e-commerce industry is expected to "register average annual growth rate of above 35 percent in the next few years".

Although e-commerce transactions are expected to grow further, they are not expected to surpass the 2008 levels, Jiang said.

In 2009, China was ranked fourth in terms of market share in global e-commerce, behind the EU, US and Japan.

With more Chinese especially those from the rural areas learning to shop online and exposed to the local e-commerce market, China is likely to surpass Japan as the third largest e-commerce market worldwide in the near future, Jiang said.

(China Daily August 31, 2010)