China has more than 380 million internet users now
Online revenue generated in China surged by more than 30% to 74.3bn yuan ($10.9bn, £6.7bn) in 2009, a research firm has said.
iResearch predicts that online earnings in China from advertising, games, shopping and other activities will surge 51% to 112.3bn yuan this year.
Separately, a report said that Google has begun talking to China about not filtering content on its search engine.
It refused to confirm this, saying it "won't be giving a running commentary".
"We've said already that we will be taking a new approach in China," a Google spokesman in London said.
"We will be discussing with the Chinese authorities the basis on which we could operate an unfiltered search engine within the law, if at all."
On 12 January, the company said in its blog that Chinese human rights campaigners using its Gmail service had been hacked.
It said it would hold talks with the Chinese government to stop censoring its search engine, and would leave the country if an agreement could not be reached.
China has said that foreign internet firms are welcome to do business there "according to the law".
Google currently holds about one-third of the Chinese search market, far behind Chinese rival Baidu, which has more than 60%.
China has more internet users - about 380 million - than any other country and is a lucrative market.
When Google launched google.cn in 2006, it agreed to censor some search results - such as the 1989 Tiananmen Square protests, Tibetan independence or Falun Gong - as required by the Chinese government.
The Chinese business magazine Caijing reported that Google has already moved some of its Beijing-based employees to Hong Kong.