Sun TV joins the myspace race in China

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Sun TV Shop, the London-listed e-commerce start-up, is planning to launch China's first myspace-style community website.

The company, which counts the manager of U2, Paul McGuinness, as a shareholder, plans to set up the site early next year.

Sun TV Shop is controlled and majority owned by Sun Media, the second-largest privately owned media company in China.

Sun Media has shares in more than 30 media companies. It was set up by chatshow host Yang Lan, the Chinese equivalent of Oprah Winfrey, and her husband, Bruno Wu.

It is almost impossible to do business in China without having the right connections in government, especially for foreign companies. The internet is a particularly sensitive area for the Chinese authorities and access to many sites, including the BBC's, are blocked.

Sun TV Shop, which is also chaired by Dr Wu, claims that its government and media links give it a unique opportunity to exploit the internet. Sun Media has given the company exclusive rights to use its fibre-optic network in China, which provides internet access in 440 cities.

After listing on the Alternative Investment Market in London last month, Sun TV Shop holds its first shareholder meeting in September.

Internet use is roaring ahead in China, especially among people between the ages of 18 and 30. It is estimated that there are around 111 million internet users, up from less than one million 10 years ago.

As well as launching its community website, Sun TV Shop is lining up Western retailers to supply luxury goods such as jewellery to sell over the internet in China. News and entertainment content will mostly be provided by Sun Media.

Community websites such as myspace and bebo have soared in recent months. Sites allow members to post profiles of themselves and chat with fellow users online.