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China's information technology industry posted a 50 percent fall in revenue in the first quarter because of tighter macroeconomic measures and worse-than-expected showing by homegrown firms, said a senior official.

 

China's IT revenue hit 909.3 billion yuan (US$118.09 billion) in the first three months, 16 percent growth year on year compared with 30 percent, said Wang Bingke, deputy director general of Bureau of Economy System Reform & Economy Operation at the Ministry of Information Industry, the IT regulator, in Shanghai Tuesday.

 

"The slow pace of fixed-asset investment and homegrown firms' decreased market share are the major reasons for the fall," Wang said during a media briefing of Nepcon China, an electronics fair in the city.

 

With marcoeconomic measures, the IT fixed-investment dropped four percent in the second half last year against the first half, which resulted in the slow growth in the first quarter, said Wang, who didn't provide the detailed investment figures.

 

In the fourth quarter, sales in the domestic handset market amounted to 23.34 million units, and the combined share of the Chinese firms was only 26 percent, according to Analysys International, a Beijing-based IT consulting firm.

 

"More than 20 Chinese firms stopped phone manufacturing in the first quarter due to fierce competition," Wang said, who also mentioned multinationals control more than 70 percent of the revenue in the industry.

 

The rapid drop in prices of LCD (liquid crystal display) TVs, laptops and mobile phones also pushed the revenue down, industry insiders said.

 

Digital TV and next generation phone, or 3G, are opportunities for homegrown firms to prepare for the Olympic Games in 2008 in Beijing, Wang said.

 

By the end of this year, China will launch a new policy to crack down on unauthorized phone manufacturing, Wang added.

 

More than 650 exhibitors from 22 countries or regions are attending Nepcon China, which will close on Friday.

 

(Shanghai Daily April 25, 2007)