From December 4 -5, the Chinese government's Ministry of Information Industry (MII) hosted the 2004 Annual Economic Conference on China's IT Industry in Beijing. MII officials used the conference to showcase new figures on the country's burgeoning IT sector, expressing confidence that IT industries in China will continue to grow rapidly in 2005.

 

MII officials confirmed government plans to maintain macroeconomic control measures put in place in 2004 through the new year. Preliminary data released during the conference indicates that the IT industry has become the country's main engine of economic growth. The MII estimates that by the year's end, total IT sales revenue in China will have grown by 42.3% year-on-year to reach a total of 2.68 trillion RMB (US$322.3 billion, 1 USD = 8.28 RMB). Profits for the first three quarters of 2004 are equally impressive. IT companies in China brought in an estimated 1.88 trillion RMB (US$226.5 billion) that marks a 40% jump from the same period in 2003.

 

According to statistics from the MII, China's IT industries enjoyed a 40.5% increase in added value during the first three quarters of 2004 amounting to 363.2 billion RMB (US$43.8 billion). By comparison, other industries in China grew by only 15.5% on average during the same period. China's foreign trade volume in IT products climbed by 49% during the first three quarters of 2004 to hit US$236.7 billion. China's IT exports for this period were valued at roughly US$144.6 billion.

 

Revenue for China's top 100 IT companies increased by 24% from January to September of this year. China's three largest IT companies -- Haier, TCL, and Lenovo -- posted revenue totals of 78.6 billion RMB (US$9.5 billion), 31.4 billion RMB (US$3.8 billion), and 28 billion RMB (US$3.4 billion) respectively. Growth in China's IT industry has in large part been held up by foreign direct investment. Revenue earned by foreign-invested companies in the IT sector increased by 45.1% year-on-year, topping out at 1.3 trillion RMB (US$159.6 billion) during the first three quarters of 2004.

 

In terms of regional breakdown, the IT industry in Shanghai grew by 97.7% year-on-year in the first nine months of 2004, while nearby Suzhou grew by 70.7%. Further to the south, the IT sector in Fujian province expanded by 34.2%. The MII's figures also seem to offer evidence that the government's preferential policies aimed at encouraging investment in China's underdeveloped interior and northeast are beginning to take effect. For instance, the IT industry in the northeastern province of Jilin grew by 29.2% year-on-year in the first three quarters. IT growth exceeded 50% in both the southwestern province of Guizhou and northwestern province of Qinghai during the same period.