China IT spend to overtake Japan in 2013

Growing demand from consumer IT and opportunities borne from China's 12th Five-Year Plan to drive overall IT spend to US$173 billion by 2013, exceeding Japan by 4 percent, IDC says.

China's IT spend is steadily closing in on Japan and poised to surpass the latter as Asia's largest spender on IT goods and services by 2013.

According to an IDC report released Thursday, IT spending in China will hit US$173 billion in 2013, making it 4 percent higher than Japan's spend of US$166 billion. The research firm explained the forecasted increase in IT expenditure was due to two key areas--growing demands of consumer IT, as well as opportunities brought about by the Chinese government's 12th Five-Year Plan.

The consumer IT market is expected to expand 29.8 percent this year, said Wu Lianfeng, associate vice president at IDC China, who pointed to devices such as smartphones, tablets and smart terminals as key growth drivers.

As personal consumer electronics become more intelligent, they are also penetrating small and medium-sized cities in China, Wu added. "Consumption upgrade, smart homes, 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."

At the same time, demand for end-user applications will drive the growth of the enterprise IT market, the analyst pointed out. For instance, consumers' use of mobile apps, including business-type apps, will spur enterprise-class hardware, software and integration services.

Kitty Fok, country manager of IDC China and vice president for IDC's Greater China research, added that major projects in the Chinese government's 12th Five-Year Plan had brought about many IT opportunities, pushing the total IT investment during this period to exceed that of its predecessor. For example, the government's aim to support the continued rapid development of e-commerce such as electronic payment and online shopping boosted investment in infrastructure, not only from companies in the e-commerce space, but other sectors such as manufacturing, retail, tourism and finance, Fok explained.

Other IT opportunities came from demand at the national, centralized level, she added. Municipal and city governments also introduced either smart or digital city plans which were the main driving forces behind IT market growth, as IT vendors continued to invest to develop this "urban market", the IDC analyst noted.

After the first two batches of the smart grid pilot demonstration project were completed in 2011, the nationwide launch in 2012 would further push growth in the IT market, Fok said. The "Internet of things" was also developing rapidly, fueling demand for information systems integration and upgrades for IT-based, energy-saving solutions, she added.