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Monday, June 04, 2012

IT Spending in China to Reach $173 Billion by 2013

China is set to achieve another key economic metric, they're overtaking Japan as the largest spender on information technology (IT) goods and services within the region. According to the latest market study by IDC, IT spending in China is closing in on Japan.

By 2013, IT spending in China will reach $173 billion, exceeding Japan's market by 4 percent. IDC attributes the IT spending growth in the China to two key areas: growing demands of consumer IT, and the IT opportunities brought about by the government's 12th Five-Year Plan.

"Personal consumer electronics will become more intelligent and expand toward small and medium-sized cities. Consumption upgrade, smart home, and intelligent auto, as well as intelligent housing and property management, will fuel the rapid growth of manufacturing and retail businesses as well as the service sector in the industrial chain, resulting in strong IT demand," said Lianfeng Wu, Associate Vice President, IDC China.

The personal consumer IT market is expected to exhibit growth of 29.8 percent in 2012, with smart terminals being a growth engine; and rapid growth of personal devices such as smartphones and media tablets will continue.

Growth of the enterprise-class IT market will be driven by demand for end-user applications, while consumers' use of mobile applications and business personal consumer mobile applications will drive enterprise-class hardware, software, and integration services.

There are a lot of IT opportunities brought about by the major projects in the government's 12th Five-Year Plan. For example, to increase the overall level of social information, the government will support the continued rapid development of e-commerce.

Electronic payment and online shopping will boost investment in infrastructure banking, and online shopping will not only drive investment by professional e-commerce companies but also encourage infrastructure investment by manufacturing, retail, tourism, finance, and other companies.

On the other hand, the national centralized demand keeps generating new IT requirements; Regional healthcare and healthcare cloud programs will also generate huge demand; Municipal and city governments have introduced either Smart City or Digital City plans, which have become the main driving force behind IT market growth.

This makes IT vendors keep increasing resource investment to develop the urban market; Triple play has achieved a breakthrough, broadcast networks–based digital business has begun to develop, and smart TV has started. Some provinces and cities, such as Jiangsu and Beijing, began to build billing systems for these services; Smart grids will drive IT investment.

By the end of 2011, the first two batches of the smart grid pilot demonstration project had been completed, and by 2012, the smart grid project will be launched in a wider scope nationwide to drive higher IT market growth.

The Internet of things has entered the phase of rapid development, driving growth of demand for information systems integration and all kinds of IT products, as well as the rapid development of the embedded systems and communication systems markets.

In the energy-saving environmental protection industry, IT has entered a period of high-speed development, and the development of the Internet of things will drive the upgrade of IT–based, energy-saving solutions.

The total IT investment during the 12th Five-Year Plan period will grow more than that in the 11th Five-Year Plan period. With the support from government, and the rising IT demand from consumer, China will soon become the largest IT spender in the APJ region in 2013.