Internet usage in China is booming. The user rate, already the largest in the word, grew 6% this year to 485 million users, reports The Economist. What's more, almost two-thirds of the population has yet to log on.

China is making the Internet their own, taking western ideas and restructuring them to suit a country where its citizens are transitioning from largely poor and disassociated regions to a wealthier, trade-rich, and interconnected community.

The potential for Internet usage, and through it e-commerce, is undeniable. Internet cable wires are expanding across the country to hook up the most far-reaching rural residents with access to breaking new, blogs, social networks, games, and shopping opportunities ... a lot of shopping opportunities.

According to the economist, online business is flourishing as the country's young entrepreneurs rush to fill voids in demands and services. "Rivals spring up literally overnight. There are 80 social networks, 200 online-video services and 2,000 online-coupon sites. Questionable business practices, such as kickbacks for online advertisements, add to the competitive frenzy."

While the Internet remains cheap, less than 100 Yuan/month, the result will be a "huge leapfrog effect," says David Michael of BCG to The Economist. "The consulting firm recently predicted that the annual value of China's e-commerce market would quadruple by 2015, to $305 billion."

As more Chinese citizens are plugged into the Internet, the demand for the technological components (computers, smart-phones tablets) and technological advancements grows. Given the competitive nature of Chinese manufacturers, the county's technology industry can be expected to help support and supply the trends.

Interested in trading on China's future in technology?

Below we identify six Chinese technology stocks that have experienced significant increases in institutional buying in the recent quarter.

Hedge funds think these Chinese technology stocks are set for a rally -- do you? (Click here to access free, interactive tools to analyze these ideas.)

1. Renren American Depositary (Nasdaq: RENN): Internet Information Providers Industry. Market cap of $958.90M. Net institutional shares purchased over the current quarter at 50.3M, which is 28.79% of the company's 174.71M share float. The stock has had a couple of great days, gaining 7.94% over the last week.

2. hiSoft Technology International (Nasdaq: HSFT): Business Software & Services Industry. Market cap of $314.56M. Net institutional shares purchased over the current quarter at 5.1M, which is 24.16% of the company's 21.11M share float. The stock is a short squeeze candidate, with a short float at 7.36% (equivalent to 7.82 days of average volume). The stock has had a couple of great days, gaining 9.69% over the last week.

3. AsiaInfo-Linkage (Nasdaq: ASIA): Security Software & Services Industry. Market cap of $722.90M. Net institutional shares purchased over the current quarter at 6.7M, which is 15.36% of the company's 43.62M share float. Might be undervalued at current levels, with a PEG ratio at 0.73, and P/FCF ratio at 13.7. The stock is a short squeeze candidate, with a short float at 22.74% (equivalent to 9.05 days of average volume). The stock has had a couple of great days, gaining 14.99% over the last week.

4. Isoftstone Holdings (NYSE: ISS): Information Technology Services Industry. Market cap of $509.79M. Net institutional shares purchased over the current quarter at 3.6M, which is 12.89% of the company's 27.92M share float. The stock is a short squeeze candidate, with a short float at 12.92% (equivalent to 13.95 days of average volume). The stock has performed poorly over the last month, losing 24.15%.

5. Qihoo 360 Technology Co. (Nasdaq: QIHU): Internet Service Providers Industry. Market cap of $2.70B. Net institutional shares purchased over the current quarter at 5.0M, which is 6.83% of the company's 73.18M share float.

6. Changyou.com (Nasdaq: CYOU): Multimedia & Graphics Software Industry. Market cap of $2.01B. Net institutional shares purchased over the current quarter at 440.6K, which is 4.39% of the company's 10.03M share float. The stock has had a couple of great days, gaining 6.81% over the last week. The stock has performed poorly over the last month, losing 25.82%.

Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the stocks mentioned above. Analyst ratings sourced from Zacks Investment Research.


Kapitall's Becca Lipman does not own any of the shares mentioned above. Data sourced from Fidelity; all other data sourced from Finviz.