eBay.cn Another U.S. online giant retreats from the Chinese market.

Rumor has it that eBay is leaving China. The Shanghai Daily is in the process of confirming this rumor, which has been going around for some time.

If true, then the U.S. online auction giant will sell the remainder of its Chinese businesses (eBay China and PayPal China) to Tom.com -- the company that runs Skype in China (another eBay property).

In 2003, eBbay bought a third of the successful Chinese auction site Eachnet for $30 million, and later acquired the rest of this company for $150 million. It then rebranded Eachnet as eBay and got rid of the Chinese founders who'd built that company's success. Later, Jack Ma's Alibaba set up TaoBao, a competitor Chinese auction site that wiped away the former Eachnet.

The change comes as Eachnet CEO Martin Wu, hired September 2005, steps down -- according to Market Watch.

So eBay may be the newest addition to the list of major U,S. internet firms, including Yahoo and Google, which are being systematically outperformed by homegrown competition in China.