China's population of Web users hits 298 million

The latest figure is a 41.9 percent increase over the same period last year, the China Internet Network Information Center said in a report Tuesday.

China's Internet penetration rate is still low, with just 22.6 percent of its population online, leaving more room for rapid growth, according to CNNIC. The Pew Internet and American Life Project places U.S. online penetration at 71 percent.

China's Internet use is growing at explosive rates despite government efforts to block access to material deemed subversive or pornographic. Regulators are in the middle of a crackdown on sites accused of carrying sexually explicit material.

The financial size of China's online market, however, still trails that of the United States, South Korea and other countries.

The United States had an estimated 223.1 million Internet users in June, according to Nielsen Online, a research firm.

China is preparing to launch third-generation mobile phone service — which supports wireless Web surfing — that is expected to set off a new surge in Internet use.