BEIJING - CHINA'S fast-growing population of Internet users has risen to 298 million after passing the United States last year to become the world's largest, a government-sanctioned research group said.

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

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

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 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. -- AP