BEIJING, March 26 (Reuters) - China is mulling a framework to develop electronic commerce and step up its digital economy, the China Daily said on Friday.

``China's E-commerce is still in an embryonic and exploratory stage,'' it quoted Ministry of Information Industry official Zhang Baotai as saying.

Developing E-commerce in China would be a colossal project requiring the formulation of new laws, policies and technical skills, Zhang told the newspaper.

Zhang said an E-commerce framework has yet to be worked out and the newspaper gave no timetable.

However, Zhang said China would ``blaze its own trail'' in developing E-commerce using existing network facilities.

The ministry has increased co-operation with other government departments to draft strict standards and ensure the orderly growth of E-commerce, the newspaper said.

Only 10 percent of China's state-run firms run computer networks which can be used for digital business, it quoted Rong Zhaoxia, an official in the State Economic and Trade Commission's Trade Department, as saying.

The Ministry of Trade and Economic Co-operation (MOFTEC) runs China's first large-scale e-commerce website (www.chinamarket.com.cn) for foreign firms interested in investing in China.

MOFTEC establised the China International Electronic Commerce Centre in 1996 to research and promote digital business.

The first pilot E-commerce project in China's medical sector has been launched to sharpen the market's competitive edge and improve its economic performance, the newspaper quoted Wang Dan of China Golden Medicine Net as saying.

The project would enable the pharamaceutical and health sectors to distribute information and settle accounts on-line, it said.