Videogames are serious business in China. The country’s online game market will reach 41 billion yuan ($6 billion) by 2010, accounting for half the global market, according to newly released data from Cnzz.com, a Beijing-based data analysis firm.

The Cnzz.com report says that almost two-thirds of China’s 338 million Web users are now online gamers. The online-game industry, which currently accounts for more than half of the total Internet economy, will see strong annual growth at a rate of 20 percent in future years, the report says.

The mainstream remains the awkwardly named sector of Massively Multiplayer Online Role Playing Games (MMORPGs). In October, six out of the 10 most popular online games in China are MMORPG games, according to the report. World of Warcraft by Activision Blizzard (ATVI) still tops the list with the most registered players and peak simultaneous online users. But the current government regulatory fighting over its Chinese license, held by Netease, may yet have a negative impact on the game, according to the report.

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China’s military is under attack. At least its Web site is…from hackers.

In a sign that China’s Ministry of National Defense faces the same kind of Internet security challenges that militaries around the world have reported, its new Web site was attacked more than 2.3 million times within a month of its August launch. The state-run People’s Daily newspaper reported that revelation Wednesday in an interview with the editor-in-chief of the Chinese defense department’s site, Ji Guilin.

In the report, Ji said it battled down a variety of hackers and no harm was done to China’s national security. He said the site has boosted its network security.

He didn’t say where the hacker attacks originated.

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The black/grey markets in Beijing will blow your mind! On Saturday and Sunday (November 14/15) I had a chance to do a bit of undercover work. I hired a guide to help me navigate the Zhongguancun shopping mall maze–Hailong, Dinghao and e-World Kemao. Jennifer, my guide/interpreter, was in the market for an iPhone (our ruse) and I was going to buy it for her.

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China’s factories have long churned out high tech products. A big question facing Silicon Valley–underscored in a survey released Monday by Intel (INTC) and Newsweek–is how big a role the country will play in dreaming up those gadgets.

The survey found optimism among Chinese respondents and pessimism among the Americans. Some 63 percent of Chinese believe their country will overtake the United States in technology innovation over the next 30 years. Only one-third of Americans believed the U.S. would still lead over that period.

Justin Rattner, Intel’s chief technology officer, agrees that China will reduce the innovation gap with America. But that doesn’t mean that surpassing the U.S. is inevitable. “Speaking personally, there’s no reason for that to happen,” he said.

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President Barack Obama has been spending considerable time on East-West trade agreements while in Asia, but for one chip maker, the negotiations between China and Taiwan are even more important.

The two countries are slowly moving toward a formalized trade agreement, called the Economic Cooperation Framework Agreement, or ECFA, that will address how their economies relate to each another. Its first iteration isn’t expected until early 2010, but Taiwan-based tech companies are already hoping to gain entry to China’s massive consumer market.

That’s especially true for Via Technologies, a chip maker running a distant third behind industry heavyweights Intel (INTC) and Advanced Micro Devices (AMD). The company, founded in 1987, made a name for itself working on an underdeveloped part of the market: small, low-power chips.

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China’s bloggers are a focus of organizers of the President Barack Obama’s upcoming visit, echoing similar efforts by the administration to use social-media tools to communicate with Americans.

On Thursday, U.S. State Department officials held simultaneous press briefings for a select group of predominantly Chinese bloggers in Beijing, Shanghai and Guangzhou, giving a rundown of the U.S. president’s China schedule and took questions from the bloggers.

The attendee list included many influential bloggers, such as journalist Michael Anti, who blogs about freedom of the press, and Rao Jin, whose Anti-CNN Web site scrutinizes China coverage by the news network and other foreign media.

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Statistics tell us that there are already more than two million iPhones in China, and the number is expected to rise (at least a little) following the recent official launch of Apple’s (AAPL) iPhone 3G in the country through local telecom carrier China Unicom.

Both Chinese and foreign firms have been releasing apps targeting China’s iPhone users, even before the Apple smart phone was officially launched in China. Among the most popular apps are Chinese-English dictionaries and Chinese city maps.

Big local players have already flocked to the market. Leading Web portal Sina.com has promoted its offerings on the iPhone App Store to feed users with Chinese news and enable them to update their blogs via iPhone. Tencent, the Internet company that runs the popular Chinese instant messaging system QQ, also offers QQ for iPhone users in and outside China.

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Walt Disney (DIS) won’t make Shanghai the happiest place in the world.

That’s the early reaction from a surprising number of netizens, or Chinese Internet users, to confirmation early Wednesday that plans for Shanghai Disneyland have the green light to proceed. Of the posts streaming into tianya.cn, a major portal, early Wednesday, the negative views were solidly outweighing positive views. A survey on eastday.com suggests a lack of enthusiasm too.

The Burbank, Calif., entertainment giant and the Shanghai government announced that they have central-government approval to build mainland China’s first Disney theme park and resort, which means contracts to build can now be hashed out.

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Intel Corp. (INTC) Chief Financial Officer Stacy Smith said evidence is beginning to emerge that corporations are returning to technology spending, although such spending is driven more by the savings offered than by any spending increases.

“Our sales guys are picking up more interest at corporations,” Mr. Smith said in an interview Thursday. Conversations with customers, he said, are often focusing on the value proposition inherent in upgrading to new computers and servers.

“In general, what we see is that things are improving,” Mr. Smith said. The stimulus package in China has provided a direct boost to the PC market because of the government’s efforts to close the digital divide among its population. And while the European market isn’t yet showing strength, the U.S. market appears to be improving.

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Apple Inc. (AAPL) is a master at creating buzz around its product launches. But as the popular iPhone approaches its official debut in China–the world’s largest mobile-phone market–consumers here seem anything but excited.

The buzz-killer is price. China Unicom (Hong Kong) Ltd., which will start selling the device Friday, is offering a version of the 32-gigabyte iPhone 3GS for 6,999 yuan ($1,024) without a service contract, which is the most popular way for people to purchase phones in mainland China. That compares with about the $800 consumers pay for the same product in nearby Hong Kong, which has different wireless carriers.

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Nokia Corp. (NOK) unveiled its first cell phone developed with China’s homegrown third-generation mobile technology Tuesday, saying it would aim to “democratize” the smart phone market by aiming to sell lower-priced handsets at higher volumes.

The phone and others like it in the company pipeline could help Nokia, which has struggled globally to keep pace with Apple Inc. (AAPL) in the fast-growing, higher-margin market for premium smart phones since Apple’s iPhone was released in 2007, to close some of the gap by capitalizing on its strength in developing markets. But its look–a slider-style with a mirror-like screen, isn’t much different than what consumers have seen before.

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Google (GOOG) has seen its fair share of troubles in China, from having its flagship search engine blocked to being scolded for peddling pornography. Last week, the Chinese Written Works Copyright Society accused the company of infringing the rights of Chinese authors through its Google Books project.

And the drama continues. Now, the Web site of the People’s Daily is accusing Google of “malicious revenge” after Google searches for the People’s Daily Online’s books section turned up warnings that read: “This site may contain malicious software that could harm your computer.”

An article posted on the People’s Daily books page, from the Beijing Times (in Chinese), quoted an official with the People’s Daily site as saying he had received numerous calls from readers who said they were unable to access the site through Google. The unnamed official said there was no harmful software on the site, and that he believed the block was due to the site’s reporting of the Google Books story. The site began featuring stories on the rights-infringement issue on Oct. 21, and even created a special page on the subject. “Starting on the 21st [we] were maliciously blocked,” the official said, according to the report.

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The number of Facebook users in China is dwindling. Or to be more exact: falling off a cliff. And not by choice, as anyone who has tried to access Facebook in China recently knows.

It’s no secret among people in the Internet business in China that Facebook was interested in the world’s largest Internet user population. But apparently–according to various parties that met with a delegation of Facebook officials some time in the last few years–they came, they saw, and they left Chinese social networking Web sites like Renren.com (formerly known as Xiaonei), Kaixin001 and 51.com to fight amongst themselves for the market.

Then, to the chagrin of both expatriate and Chinese users (the number of which appeared for a time to be growing), China’s censors blocked Facebook. Blocks of overseas Web sites such as YouTube.com are a fact of life here, barely acknowledged and never explained by the government. (Many of these sites actually matter very little to Chinese Internet users who have their own favorite Web sites to watch videos on.)

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Microsoft’s (MSFT) big launch of the new Windows 7 operating system on Friday in Beijing was much like its launches around the world: a huge, boisterous demonstration of new features such as being able to share music across multiple computers in one home. With one big difference: the emphasis that executives put on the benefits of “genuine” Windows 7 over pirated versions, showing that piracy remains a huge concern in China, the world’s second largest market for personal computers.

“It’s very important to make sure that people are understanding the benefits of running genuine Windows over pirated copies,” Microsoft Vice President of Windows Platform Strategy Mike Nash told an audience of mostly Chinese reporters. “I look at all of you as great witnesses to explain that to all of China.”

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In response to the recent uproar over Google’s (GOOG) digital library in China, Google initially gave a boilerplate response about its U.S. book settlement applying only to U.S. books, and that the company will “of course” listen carefully to concerns and work hard to address them.

Thursday, journalists received an updated statement from the company saying the Chinese books in its library are available only in snippets, unless use of the full texts is approved by rights holders. Yet somehow, state-run newspaper China Daily seems to have taken this to mean Google plans to make a new settlement with Chinese authors. Today’s headline read, “Oodles of woe for Google,” and the lead paragraph says the company “may draw up a new statement to put out its copyright fire in China, according to a statement.”

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