BEIJING -- When Li Bo began producing memento buttons in 1998, he reckoned his three-man operation would sell mostly to tourist-site operators nearby.

Then he registered his company with Alibaba.com, a Chinese Internet company that specializes in introducing manufacturers and buyers across China and around the world. A Chinese trading company more than 1,240 miles from Mr. Li's base in Shenyang saw the listing and ordered 200,000 political-campaign buttons for a buyer in France. Last year, Mr. Li's company generated the equivalent of $845,700 in revenue, and garnered half its orders from people who learned about the company through Alibaba.com's Web site.

Electronic commerce is changing the way companies all over the world do business, making it easier for them to buy and sell to each other and to connect with customers. But in China, e-commerce is having an especially big impact in helping small private businesses sell nationally and even internationally.

Hampered by poor roads, a creaky transportation network and fractured local markets, small companies have a hard enough time doing deals in other provinces within China; traditionally, it would have been near-impossible for them to identify potential partners abroad. By acting as global trade fairs, Chinese e-commerce sites are allowing many smaller companies to reach a far wider market and to compete directly with larger competitors.

Ant farmer Lu Dengai estimates that her sales of ant nests and eggs jumped one-third to about 80 two months after she followed her son's recommendation and registered the Guangxi province farm on Alibaba.com in November.

Fu Xiaohui, a researcher for the Ministry of Information Industry, estimates the value of online business-to-business deals in China hit 275.6 billion yuan ($33.30 billion) in 2003, with most of these deals initiated online but with payments made offline. By comparison, the official Xinhua news agency put the total amount of such transactions in 2000 at 76.77 billion yuan.

"China has at least one million companies who want to sell products abroad, but they don't know how," says Jack Ma, founder and chief executive of Alibaba.com, widely perceived as China's biggest e-commerce site. The Hangzhou-based company operates two Web sites that serve as a sort of online Yellow Pages for companies looking to buy and sell goods. For an annual fee, users can post information on their companies on the sites and access information about other users.

Alibaba.com commissions basic background checks on its registered users. It also allows users to post references, such as their bank, on the site, enabling businesses to check up on potential partners themselves -- crucial services in a country that has no national credit-rating system.