users wasstill very small). Therefore the companies are notrepresentative of all SMEs in each country and the surveys do not reveal how many companies use the Internet Rather, they look at those that use the Internet, plus some non-users and prospective users 1. 1.3 The Development of E-commerce in China In China, the wage is still relatively lower than that in developed countries. Chinese customers wouldnt choose electronic business for the reason of convenience. unless the commodities are cheap enough, which is an obvious fact. On the other hand, if electronic business can be combined with entertainment or recreational activities, the shop on net will ome more attractive;this is also the important prerequisite of B2c development. As is known to all shopping on net is not cheap in China now, and there are not yet enough recreational activities on the net, so we can't deduce that Chinese B2C has found its marketable power of development. For same reason, we can't say that Chinese B2C is in a period of developing fast. But we can prophesy that this period will arrive soon, for the following three reasons Firstly, large sums of money have been invested in the information infrastructure. Now the condition for E-commerce development in China is being upgraded continuously Secondly, the latent customer, such as the young people who have received higher education will accept B2C quickly Thirdly, people's living standard is rising Normally, people begin to value life quality when the per capita GDP reaches 3000 dollars. This signifies that people will pursue higher efficiency of doing household choirs so as to have more leisure time. a number of cities in east China have their per capita GDP exceeding 3000 dollars, which will double in ten years. Even though B2C well known to customers, B2B trade will exceed B2C in 3 years. Due to a report of IDC, the general value of Chinese B2B market will be 2.3 billion U.S. dollars in 2003. A report of Gartner Group points out that global B2B electronic commerce will climb to 7.29 trillion dollars in 2004 Why is B2B developing so quickly? A major reason should be that the E-commerce technology could reduce the trade cost of enterprises. Enterprises, big or small, have great demand for B2B trade. However, most of Chinese enterprises only utilize B2B at product purchase and sale. B2B has huge development space in China, but it needs a period of time to develop, because a lot of enterprises in China have defects in their systems 1.1.4 The Prospect of E-commerce Development The prospect that e-commerce transactions may gain a sizeable share of overall commerce is only one dimension of why the Internet is generating such interest. The open structure of the Internet and low cost of using it permit the interconnection of new and existing information and communication technologies, and offers businesses and consumers a new and powerful information system and a new form of communication. This makes it possible for buyers and sellers to come together in more efficient ways and is creating new marketplaces and opportunities for the reorganization of economic processes. It is also changing the way products are customized distributed and exchanged and how businesses and consumers search and consume products 1.2 Definition of e-commerce and categories of e-commerce 1.2.1 Definition of e- Electronic Commerce seems to be everywhere these days. It's nearly impossible to open newspaper or magazine without coming across an article about how Electronic Commerce is going to change all our lives. Businesses of all sizes are bombarded with adverts that seem to imply that any company not investing in E-Commerce will be left behind Electronic Commerce(EC) is the process of buying, selling, or exchanging products, service and information via computer networks 1. ec defined from these perspectives From a communications perspective, EC is the delivery of goods, services, information, or payments over computer networks or by any other electronic means From a business process perspective, EC is the application of technology toward the automation of business transactions and work flow From a service perspective, EC is a tool that addresses the desire of firms, consumers, andusers wasstill very small). Therefore, the companies are notrepresentative of all SMEs in each country and the surveys do not reveal how many companies use the Internet. Rather, they look at those that use the Internet, plus some non-users and prospective users. 1.1.3 The Development of E-commerce in China In China, the wage is still relatively lower than that in developed countries. Chinese customers wouldn't choose electronic business for the reason of convenience, unless the commodities are cheap enough, which is an obvious fact. On the other hand, if electronic business can be combined with entertainment or recreational activities, the shop on net will become more attractive; this is also the important prerequisite of B2C development. As is known to all, shopping on net is not cheap in China now, and there are not yet enough recreational activities on the net, so we can't deduce that Chinese B2C has found its marketable power of development. For the same reason, we can't say that Chinese B2C is in a period of developing fast. But we can prophesy that this period will arrive soon, for the following three reasons: Firstly, large sums of money have been invested in the information infrastructure.Now the condition for E-commerce development in China is being upgraded continuously. Secondly, the latent customer, such as the young people who have received higher education will accept B2C quickly. Thirdly, people’s living standard is rising. Normally, people begin to value life quality when the per capita GDP reaches 3000 dollars. This signifies that people will pursue higher efficiency of doing household choirs so as to have more leisure time. A number of cities in east China have their per capita GDP exceeding 3000 dollars, which will double in ten years. Even though B2C is well known to customers, B2B trade will exceed B2C in 3 years. Due to a report of IDC, the general value of Chinese B2B market will be 2.3 billion U.S. dollars in 2003. A report of Gartner Group points out that global B2B electronic commerce will climb to 7.29 trillion dollars in 2004. Why is B2B developing so quickly? A major reason should be that the E-commerce technology could reduce the trade cost of enterprises. Enterprises, big or small, have great demand for B2B trade. However, most of Chinese enterprises only utilize B2B at product purchase and sale. B2B has huge development space in China, but it needs a period of time to develop，because a lot of enterprises in China have defects in their systems. 1.1.4 The Prospect of E-commerce Development The prospect that e-commerce transactions may gain a sizeable share of overall commerce is only one dimension of why the Internet is generating such interest. The open structure of the Internet and low cost of using it permit the interconnection of new and existing information and communication technologies, and offers businesses and consumers a new and powerful information system and a new form of communication. This makes it possible for buyers and sellers to come together in more efficient ways and is creating new marketplaces and opportunities for the reorganization of economic processes. It is also changing the way products are customized, distributed and exchanged and how businesses and consumers search and consume products. 1.2 Definition of e-commerce and Categories of e-commerce 1.2.1 Definition of e-commerce Electronic Commerce seems to be everywhere these days. It’s nearly impossible to open a newspaper or magazine without coming across an article about how Electronic Commerce is going to change all our lives. Businesses of all sizes are bombarded with adverts that seem to imply that any company not investing in E-Commerce will be left behind. Electronic Commerce (EC) is the process of buying, selling, or exchanging products, services, and information via computer networks. 1. EC defined from these perspectives ▪ From a communications perspective, EC is the delivery of goods, services, information, or payments over computer networks or by any other electronic means. ▪ From a business process perspective, EC is the application of technology toward the automation of business transactions and work flow. ▪ From a service perspective, EC is a tool that addresses the desire of firms, consumers, and