Research firm Canalys has predicted that by 2020, there will be more than 1.4 billion smartphones in use in China, as well as a further 34 million mobile phone users still to upgrade.
The figure is forecast to outstrip the US, where smartphone usage is said to reach 332 million in 2020, with only 5 million mobile phone users.
Nicole Peng, research director for Canalys APAC, attributed this to the increasing developments in mobile payments, shopping, and social networks as factors for encouraging smartphone uptake.
"Chinese consumers are at the forefront of smartphone adoption. Smarter vehicles, virtual reality (VR), and the Internet of Things will become bigger parts of people's lives through the government's 'Internet Plus' initiative and the increasing competition between local technology leaders," she said.
China shipped a record 117 million smartphones in the fourth quarter of 2015, up 8 percent from the fourth quarter in 2014.
At Shanghai's Consumer Electronics Show Asia event last month, it was reported that VR, automobiles, and drones outshone mobiles amid a reduced demand for handsets in the region.
Mobile World Congress Shanghai will run at Shanghai New International Expo Centre from June 29 to July 1, where virtual reality is expected to be a key focus.