The role China will play in the IT market by 2010
This article will argue that China will play an important role in the future of the IT market, though by 2010, exactly where it stands within the IT market is unsure. However, it is seen as one of the fastest growing markets, and has the greatest potential to improve.
• Asia is currently seen as seen as a rapidly growing market, with China being the fastest growing country in the region, holding 39.7% of the total Asia/Pacific IT market. It is placed second in the world in terms of sales of desktop computers and Internet usage. It has the world’s largest mobile phone market, with over 200 million subscribers. Some of the reasons for its success are outlined below.
• The Chinese government is actively involved in supporting and boosting the IT economy. This is a good sign for investment in terms of stability in the country. Former Premier Zhu has called for better efforts to boost the IT industry, and so $120 billion has been dedicated for spending over the next five years in the information industry: 500 billion Yuan will go to telecommunications, 50 billion Yuan to postal services and 400 billion Yuan to electronic information. Other preferential policies include taxes, high-tech parks and recreational facilities and other incentives to attract and develop the industry. The government also marked certain schools, such as top universities like Peking University, to focus on IT education so as to expand the pool of networking and software professionals.
• One fifth of the world’s population lives in China, and so has great potential for filling the skills gap in the IT industry. So, not only does the government support education, but companies have realized this potential and are pumping money into the education industry, with a focus on gaining IT and English skills. The annual number of IT professionals produced is estimated to be 200,000. For example, Cisco and the Chinese Ministry of Education, joined forces in 2004, to enable 35 software colleges to be part of the Cisco Networking Academy, so that students can learn how to use the firm’s products. IBM has implemented a similar procedure, allowing 400,000 students to be part of software development programs in 2004.
• Another reason is China’s rapidly developing consumer industry. It has one of the world’s largest domestic markets, with 480 million middle-class consumers. An interesting example of faith in this market, was eBay’s recent announcement that China could become its largest market within the next five years.
• China’s IT market has an 11.1% growth rate in its hardware market, 21% growth in its software market, a 32.9% rise in its IT services, with the general IT market growth of 16%. And with China’s entry to the WTO has ensured it 25% IT spending growth will improve for years.
• Despite all this evidence, exactly where China is placed in the ranks of the IT market by 2010 is not certain. Some analysts profess its places as first, some only third. And let us remember that 2010 is only five years away. The reality is that China is playing, and will play, a pivotal role in the world’s IT market, and from its position at the moment , especially with its government’s support and investment in education, it can only rise in its ranks.
Sources:
"IT market in China", available here
"IT Outsourcing to China", available here
"eBay eyes China for growth", Reuters, available here
"Can China Compete in IT Services?", The McKinsey Quarterly, available here
"Cisco gets behind China's IT education drive", CNet Asia, available here
"IBM to train 40,000 IT students in China", CNet Asia, available here
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