A trust crisis is stifling China's e-commerce boom, according to a survey released yesterday.

The survey, sponsored by the China Electronic Commerce Association (CECA), showed 36.3 per cent of Chinese companies with experience in online trading don't trust e-commerce. For consumers, the figure stands at 13.3 per cent.

Rampant online fraud has led 23.5 per cent of Chinese companies to list trustworthiness as their biggest concern about online trading.

An earlier report by the China Internet Network Information Centre found 71.1 per cent of Chinese Internet users, who have yet to buy or sell something online, are wary of online fraud.

"A lack of mutual trust between sellers and buyers has become the biggest bottleneck to the rapid growth of e-commerce in China," said Zhao Yinhu, vice-president of CECA at the Ninth China International E-commerce Conference, which opened in Beijing yesterday.

In response, Chinese e-commerce companies have launched some evaluation schemes to rate sellers' reputations in online commerce.

CECA's survey found that 64.2 per cent of Chinese consumers and 71.1 per cent of enterprises, before starting online transactions, check the sellers' record of previous buyers' feedback.

However, despite the increasing use of evaluation schemes, 40.3 per cent of enterprise buyers still fail to give feedback to sellers after completing the transactions, Zhao said.

"If such a practice continues, an effective evaluation mechanism will hardly be established," he said.

Inadequate security for online payments and ineffective laws and regulations have also led a large number of consumers and enterprises to shun online commerce, said Zhao.

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