The "white paper" statement of government policy was released three months after a public dispute over censorship prompted Google Inc. to shut its mainland-based search engine.
It said there were 384 million Internet users in China at the end of 2009, about 29 percent of the population. The government aims to boost that to 45 percent in the next five years by pushing into rural areas where the white paper said there was a "digital gap."
It said the Internet had taken an "irreplaceable role in accelerating the development of the national economy" and would continue to impact daily work, education and lifestyles.
But China, which routinely blocks Web sites such as Facebook, YouTube and Twitter, gave no sign there would be an easing of the "Great Firewall" -- the nickname for the of filters that keep mainland Web surfers from accessing material the government deems sensitive.
In a white paper published on Tuesday, the government also said it would not accept outside criticism of its internet controls and warned foreign governments and companies to respect its rules.
"Within Chinese territory, the internet is under the jurisdiction of Chinese sovereignty. The internet sovereignty of China should be respected and protected," the paper said.
It added that China "advocates the exertion of technical means" in line with existing laws and international norms "to prevent and curb the harmful effects of illegal information on state security, the public interest and minors".
The paper said such laws allowed the curbing of online content on topics ranging from "instigating racial hatred or discrimination and jeopardising ethnic unity" to gambling, violence and obscenity.
China is believed to operate one of the world's largest and most sophisticated systems of web censorship, which has been dubbed by some the "Great Firewall of China".
Backed by what analysts estimate is a force of several thousand cyber police, the system monitors and blocks access to any content the government deems unacceptable, ranging from pornography to political dissent.
The release of the white paper follows a high profile spat earlier this year with internet search giant Google over the issue of online censorship.
In March Google announced it was pulling out of China after failing to reach an agreement with Chinese that would allow it to continue working in the country.
The row in turn touched off a war of words with the US over internet freedom, at a time when ties were already frayed over US arms sales to Taiwan, a visit by the Dalai Lama, and a host of trade and currency issues.
According to the New York-based Committee to Protect Journalists, China is one of the world's most oppressive nations in its approach to online censorship.
As of last December, the group said, China had jailed at least 24 journalists, many of them on charges related to internet blogging.
However in Tuesday's white paper China insisted it "guarantees the citizen's freedom of speech on the internet as well as the public's right to know, to participate, to be heard and to oversee".
The paper added that China's leaders "frequently log onto the internet to get to know the people's wishes" and participate in online chats with users.
The report said there were 384 million internet users in China at the end of 2009, equal to about 29 per cent of the total population, and said it wanted to increase that figure to about 45 per cent in the next five years.
It said a key goal would be to push the internet into rural areas where the paper said there was a "digital gap."