China now has more internet users than any other country in the world, as many millions more Chinese in cities and the countryside get connected to the web, a report suggests.

The number of users in China jumped nearly 42 per cent to 298 million by the end of 2008 from the previous year, the China Internet Network Information Centre (CNNIC), a state-affiliated reseach group, said.

The number of Chinese surfing the web from their mobile phones surged 113 per cent to 117.6 million last year.

Mobile internet is expected to grow explosively in the next few years after the recent issuance of third-generation (3G) licenses, the group said.

The internet penetration rate in China, which has a population of 1.3 billion, has risen to 22.6 per cent, slightly higher than the world's average of 21.9 per cent, CNNIC reported.

However, that leaves plenty of room for growth. The Pew Internet and American Life Project places online penetration in the United States at 71 per cent.

The US had an estimated 223.1 million internet users in June, according to Nielsen Online, a research company.

China is preparing to launch 3G mobile phone services — which support wireless web surfing — which are expected to set off a new surge in internet use.

Last week China awarded the long-awaited licenses for 3G mobile networks to three telephone operators, paving the way for investments of about 280 billion yuan (£28 billion) in network upgrading and expansion over the next two years.

China Mobile will spend 58.8 billion yuan this year to expand its 3G network across the country, and China Telecom and China Unicom plan to invest 80 billion yuan and 100 billion yuan, respectively, this year and next.

By 2011 the three operators expect to start 3G services throughout China.

The report by CNNIC noted that internet use in the countryside was increasing faster than in the cities.

Users in the countryside surged by 60.8 per cent year-on-year to 84.6 million, compared with much more modest growth of 35.6 per cent in the urban areas, the report said.

In addition, the number of internet news readers has risen to 2.34 million, and websites have become a crucial area for publicity, the report said.

News portals in China, such as Sina Corp and Sohu.com Inc, are the main sources of information for a large number of internet users across the country.

Students are the main strength of mobile internet users, the study said: 43.5 per cent of them use their mobile phones to read online news, download music, check e-mail and perform a variety of other tasks.

It also said the number of Chinese bloggers hit 162 million by the end of last year.

Wary of threats to its grip on information, Beijing has launched a crackdown on "vulgar" web content after conducting numerous censorship efforts targeting pornography, political criticism and web scams in the past.

This month China released a blacklist of 19 important online portals and websites, including Google and Baidu, the leading Chinese search service, that it claimed provided and spread pornographic or obscene content.

The move came as several Chinese government agencies, including the Ministry of Public Security, initiated a month-long campaign to clean up the web, according to Xinhua, the state-run news service.

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