Google captured 16.6% of Chinese search engine users last year, up from 14.3% the year before, China's domain registry center said in a report dated Thursday.
Google has struggled to raise its user share against Chinese search giant Baidu, which opened in 2000 and has worked hard to lead its domestic market.
Baidu's user share rose more than two percentage points to 76.9% last year, the Chinese Internet Network Information Center (CNNIC) said.
China had 298 million Internet users at the end of 2008, the most in any country, according to CNNIC.
"Google is doing a lot of the right things in China -- it's just in the situation that there's a limit to how much market share it's going to be able to get," said Mark Natkin, director of Marbridge Consulting in Beijing.
Baidu has an easily recognizable Chinese name, while Google only introduced a Chinese name in 2006 and has not caught on as well among users outside of major cities, he said.
Google's Chinese name, "Gu ge," means "valley song," but its catchier English name is more popular among young urban Chinese.
"There's a strong perception that Google is a foreign brand, a foreign search engine, and that Baidu is a domestic one," Natkin said. "As such, there's a little more user acceptance for Baidu."
Some analysts also say Baidu attracts many search engine users with an MP3 search that links to free downloads of copyrighted songs.
Google launched a free music search download service in China for registered songs last year to compete with Baidu, but limited selection has deterred users.
More users stayed loyal to Baidu than to Google in 2008. Google retained around 80 percent of users from 2007 to 2008, much lower than Baidu's 96 percent retention, the CNNIC report said.
Yahoo's user share fell to 1.6 percent last year, the report said without elaborating. The report did not offer a corresponding figure from 2007.