Techcrunch says there are now 137M Chinese web users, second only to the US with 165-210M users. It wouldn't be long before the Chinese web users will outnumber the US web users - after all, there are more honor kids in China than there are KIDS in the US.
But there still many problems with doing web business in China, and the biggest would be that they will copy you in no time.
There were cases reported where Chinese developers were shown only the screen shots of online games from Korea etc and they still copied the entire game, with a striking similarity to the original game, including the game mechanics and so on.
Watch out, those Beijing University graduates are SMART.
I don't know if this is entirely true, but it was rumored that in China even tests such as GRE or GMAT can be re-combinated within hours from the test, as there are test-takers who remember some specific part of the test ( e.g. the twenty second word from the passage for questions 3 through 5) and later put it up on the board. Collected over time, these "recombinated tests" can serve as a great test-prep material.
The second problem is that the Chinese web users don't have a thick wallet, at least for the time being. Very little ARPU expected.
The third problem would be the protectionism of the Chinese government - hence the term "Great Firewall."
There should be more problems but I'll stop here. All said, Chinese market should still be attractive to many, with the country being expected by nearly all experts with high certainty to become the world's #1 economy by 2050 or before.
PS. One of my friend familiar with China said, the right kind of mentality to have when you go to China for business is to let THEM (the local Chinese) make money and take some shares, not claim it's your technology and you should make money.This sounds a bit stretched, but Europeans have learned it hard way from their colony experience that it always works better if you let them make money and collect taxes.
