The market value of China's Internet industry climbed more than 56 percent from a year ago to 38.9 billion yuan (US$5.7 billion) in the first half, industry statistics showed.

E-commerce remains the largest sector, contributing 27.6 percent of the total, while online advertising accounted for 21.9 percent as the World Cup and other seasonal events pushed marketing spending, according to a report released by Internet consulting firm iResearch yesterday.

"The strong growth showed robust domestic demand although the Chinese economy is mostly boosted by investment and exports," iResearch said in the report.

"Low inflation and strong consumer potential will push the Internet economy," iResearch analysts Hu Yuanyuan and Zhang Mobai wrote in the report.

The mobile Internet proportion dropped to 10.3 percent from 12.8 percent in the first quarter as the government went after illegal wireless value-added content providers.

The popularization of 3G and upgrades to telecommunications services are expected to lead to strong growth in the next few years.

China Internet Network Information Center said earlier this month that the country's web users reached 420 million by the end of June. Penetration rate rose to 31.8 percent and mobile Internet users increased 18.6 percent from the end of last year to 277 million.

China's Internet economy is expected to exceed 44 billion yuan by the end of the third quarter, according to the research firm.