China legalizes electronic signatures to promote e-commerce

China's parliament on Saturday passed a law legalising electronic signatures in an effort to boost its small but growing e-com industry.

China's parliament on Saturday passed a law legalizing electronic signatures in an effort to boost its small but growing online commerce industry.

The law gives electronic signatures the legal status of handwritten signatures and allows the creation of companies to verify the identity of participants in an online transaction, the official Xinhua News Agency reported.

China has the world's second-largest population of Internet users with 87 million people online. But e-commerce has grown slowly, held back by a low rate of credit card use among Chinese and a lack of other online payment options and legal structures. Despite that, the industry has begun to attract strong interest from foreign investors.

US-based Amazon.com Inc. announced plans this month to pay $75 million for Joyo.com Ltd, China's largest online seller of books, music and videos. E-Bay and others also have announced deals aimed at profiting from China's online commerce.

Chinese lawmakers have been working on the new measure since April, 2003, studying the experience of more developed economies in e-commerce, Xinhua said.

China already has some 4,000 Web sites that carry on e-commerce, the report said. It said their revenues last year totaled an estimated $60 billion.