China IT spend to hit $124B in 2014

Summary:Country's public and private sectors are forecast to spend US$124.5 billion on IT, an increase of 10.5 percent over last year, and retain its position as the world's third-largest tech market.

China's public and private sectors are forecast to spend US$124.5 billion on IT in 2014, an increase of 10.5 percent over last year, and retain its position as the world's third-largest tech market. 

The country will also be the third fastest-growing market among emerging economies, trailing Brazil and Mexico, according to a report by Forrester Research. China will place behind the U.S. and Japan in the global IT market, estimated to be worth US$2 trillion. The U.S. will see IT spending of US$877 billion this year, followed by Japan's US$211.4 billion. The Forrester report excludes corporate telecom services and consumer spending.  

Andrew Bartels, lead author and vice president at Forrester, noted: "An improved economic outlook for 2014 and 2015 will translate into better growth in the global market for business and government purchases of IT goods and services than [what] occurred in 2013."

The research firm predicted that China's enterprise IT buys grew 6 percent in 2013 to 698 billion yuan (US$114.36 billion), and will climb another 8 percent this year to 752 billion yuan (US$123.21 billion). It expects local vendors including Huawei, Inspur, and Lenovo to benefit from the NSA-Snowden blowout , gaining market share in server, storage, and networking. 

Forrester also forecast China to become the world's largest e-commerce market with 356 million online shoppers in 2014-- exceeding the entire U.S. population--and its online retail market will be worth US$604 billion in 2017.

Worldwide, IT spending by governments and businesses will climb 5.5 percent to hit US$2.22 trillion this year, according to Forrester, with software purchases accounting for the biggest share at US$568 billion. 

Across the Asia-Pacific region, IT spending will grow 4.5 percent from 3.1 percent in 2013, where mainland China "continues to narrow the gap" with second-largest market Japan, Forrester said. Demand for personal computers , for example, remains steady in China, compared with declines in other markets around the world.

According to the research firm, IT transformation projects will be main drivers of IT spending in the region with Vietnam, the Philippines, and Indonesia leading Asean in IT purchase growth. Much of this will come from companies deploying large IT transformation projects and implementing best practices to boost their competitive edge amid a slower, more uncertain economic landscape, Forrester said. Thailand's volatile political scene also may affect IT investments in the country, hence, hampering IT spending growth this year. 

Topics: Tech Industry, China


Eileen Yu began covering the IT industry when Asynchronous Transfer Mode was still hip and e-commerce was the new buzzword. Currently a freelance blogger and content specialist based in Singapore, she has over 15 years of industry experience with various publications including ZDNet, IDG, and Singapore Press Holdings. Eileen majored i... Full Bio

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