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The information and communication technology (ICT) industry can expect a brighter future in 2006, thanks to the launch of third generation (3G) mobile communications and a more aggressive push to the popularize digital TV, according to a senior government official.
"The 3G and digital TV promotion campaigns will be launched in the first half of next year and they will add a lot of vitality to the industry," said Wang Bingke, deputy director general of the reform and operation department under the Ministry of Information Industry (MII), in Beijing on Friday.
It is the first time that officials from the MII the telecoms and electronics industry watchdog have specified a timetable for the launch of the long-awaited 3G, although there is widespread speculation about the release of licenses next year.
He made the remarks at the China Information Technology and Economic Conference 2005, organized by the MII's think-tank China Center of Information Industry Development. The event, which has run since 2002, is a platform for the MII and other government departments to sum up the current year and talk about future trends.
Wang said that since China promised to offer 3G services and digital TV broadcasting for the Olympic Games in Beijing in 2008, it is high time to begin to push for the large-scale deployment.
The country, with 380 million mobile phone subscribers at the latest count, is a place that every industry player is watching.
The original plan was to have 15 million households with digital TV by the end of the year, but Radio and Television magazine forecasts there will in fact only be 4 million.
3G and digital TV will be a strong boost to the ICT industry, which has suffered slower growth this year.
According to the MII, the electronics manufacturing business in China grew by about 20 per cent in the first nine months year-on-year, less than the 47 per cent growth in the same period in 2004.
He said the reasons include lack of foreign investment due to the macro-economic control by the Chinese Government, a lack of exciting new things like 3G; and a slowdown of exports following the appreciation of the yuan in July.
At the same time, intensifying competition also dragged the profits of the industry down by 5 per cent in the first nine months, while tax revenues fell by 1.4 per cent.
However, Wang said the performance in 2005 as a whole could improve with a strong 4th quarter.
MII estimates the output of the whole industry will reach 3.3 trillion yuan (US$408 billion), compared with 2.65 trillion yuan (US$328 billion) in 2004.
Exports will total US$250 billion, while software sales are forecast to be 300 billion yuan (US$37 billion).
Wang said that since 2006 is the first year of the 11th Five-Year Plan (2006-10) period, his ministry will give some help to critical sectors like semiconductors and software.
MII will release a policy on the semiconductor industry in 2006 to give it strong support, in accordance with World Trade Organization principles.
The country issued a policy in 2000 to encourage the development of the industry, but tax preferences to companies in China led to complaints from the United States, Japan and the European Union over unequal treatment between foreign companies and firms in China. The country scrapped the tax policy last year.
(China Daily December 3, 2005)
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