China's Internet market scale is expected to jump by 40 percent to 163.5 billion yuan in 2008, according to the estimates of CCID Consulting, a leading market consultant.

"Online games and e-commerce are the major driving forces of the impressive growth," explained Tan Bin, a senior expert with the company.

"Prepaid cards used to be the only profit source for online game operators," said Tan. "Now they sell equipment that players use in the games, which has proved to be more profitable."

According to the CCID research, the online game market grew by 74.6 percent year on year to 11.4 billion yuan in 2007 and is expected to reach 18.7 billion yuan in 2008.

"E-commerce, which covered the sale of books and discs mostly in the past, has become a platform for more products, such as insurance, steel and chemicals," said Tan.

"As traders get used to doing business online, which significantly reduces their costs, e-commerce is sure to boom," Tan said.

China's e-commerce rose by 68.9 percent to 18 billion yuan in 2007 and is expected to see a 65 percent annual increase in 2008, according to the company.

"Online advertising will expand the Internet market as more companies increase their spending during the Beijing Olympic Games," Tan said.

CCID Consulting predicts that online advertising will grow by 49 percent year on year to 6.9 billion yuan in 2008.

Beijing-based CCID Consulting was the first domestic consulting firm to be listed in the Growth Enterprise Market of the Hong Kong Stock Exchange. It is affiliated to the China Center for Information Industry Development (CCID Group).