HONG KONG/SAN FRANCISCO, Oct 6 (Reuters) - Online payment specialist PayPal
is hiring in China as it explores an entry into one of the world's fastest
growing markets, following in the footsteps of its parent, eBay Inc.
(EBAY.O: Quote, Profile, Research) .

A PayPal spokeswoman in Silicon Valley said on Tuesday the company is in
exploratory stages for a potential entry to China. She declined to say more
and would not comment on a recent Chinese media report saying PayPal would
launch a service in China by year-end.

In the job section of eBay's China Web site on Wednesday, eight locally
based positions contained PayPal references, including postings for Chinese
content and financial services managers.

"PayPal is definitely looking at China, looking at the market and how to set
up operations here," Shao Yibo, chief executive of eBay EachNet, eBay's
China site, told Reuters in a recent interview.

EBay purchased EachNet for $180 million in two tranches over the last two
years, and recently integrated the company's Web site into its own worldwide
network. Shao would not give more specifics on PayPal's plans.

PayPal services would be a natural fit for China, where e-commerce has been
slow to take off due in part to lack of easy payment methods.

Credit cards are still relatively rare in the country, where cash is still
king and policy-oriented lending by money-losing state-owned banks was the
norm until recently.

To address the payments issue, China's biggest online travel agent,
Ctrip.com (CTRP.O: Quote, Profile, Research) , last month launched a credit
card with China Merchants Bank Co. Ltd. (600036.SS: Quote, Profile,
Research) .

Only about 10 percent of China's estimated 90 million-plus Web surfers buy
things over the Internet, compared with 38 percent in the United States,
according to industry executives.

The nation's online shopping market was worth a relatively modest 4.2
billion yuan ($507.5 million) last year, and is expected to double this
year, according to market research firm Shanghai iResearch.

Users of eBay's EachNet traded $63 million in goods in the second quarter,
up 28 percent from the first quarter but still a fraction of eBay's $319
million in U.S. transaction volume for the three months.

But China's enormous potential has attracted many of the world's top
players, with eBay, Yahoo Inc. (YHOO.O: Quote, Profile, Research) ,
Amazon.com (AMZN.O: Quote, Profile, Research) and InterActiveCorp (IACI.O:
Quote, Profile, Research) shelling out more than $400 million together to
buy various Chinese e-commerce operators in the last two years.