Chinese netizens have hit a record high of 731 million, accounting for 53.2 per cent of the total population, authorities said, as e-commerce drives consumer demand.
During the past year, the number of Chinese who used mobile phones to make payments reached 469 million people, an increase of 31.2 per cent from 2015.
The growth rate of China's netizen population has stabilised after nearly 10 years of exponential growth, Liu Xin with the CINIC said.
In 2016, Chinese netizens used Internet-based government services more often than offline service centers and hotlines.
Government information was disclosed to the public in an increasingly mobile, immediate and transparent manner, the report said.
In addition, Internet coverage expansion has helped improve people's living standards and boost e-commerce, the report said.
For instance, the number of Chinese who ordered takeaway online had reached 209 million as of December 2016, a year-on-year increase of 83.7 per cent.
Between January 1 and November 30, 2016, video websites filed 4,430 network dramas with authorities. Quality of network dramas improved, with some ranking among the most popular for the year, according to the report.