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HANGZHOU, Oct. 20 (Xinhua) -- China ranks second globally in the development of the internet, trailing only the United States, said a report released Sunday.

Among all countries, China ranks first in the application of the internet, and second in innovation capacity and industry development, according to the World Internet Development Report 2019, which was released during the 6th World Internet Conference held in the river town of Wuzhen in east China's Zhejiang Province.

However, China has much room for improvement in the development of internet infrastructure and cybersecurity capability, said the report.

In 2018, the size of China's digital economy grew to 31.3 trillion yuan (about 4.4 trillion U.S. dollars), accounting for 34.8 percent of the nation's gross domestic product, according to another report on China's internet development released Sunday.

E-commerce in China is also booming. In 2018, the country's e-commerce transactions totaled 31.6 trillion yuan, up 8.5 percent. E-commerce services generated 3.5 trillion yuan in revenue, up 20.3 percent.

As of June, the number of Chinese internet users reached 854 million and the internet penetration rate was 61.2 percent.