China's information technology (IT) industry will maintain rapid and healthy growth in 2005, which will render a good start for the 11th Five-Year Plan that follows the 10th Five-Year Plan ending in 2005.

The prediction was made by Chen Wei, vice-director of the Economic Operations Department under the Ministry of the Information Industry (MII), at the 2004 Annual Economic Conference of China's IT Industry over the weekend in Beijing.

The government will continue macro economic controls for rational and rapid development of the industry, which has taken on effect in China's 2004 vibrant economic development, Chen said.

China's IT industry is expected to see a sales revenue of 2.68 trillion yuan (US$322.3 billion) in 2004, up 42.3 percent year-on-year, becoming the country's leading driver for economic growth, MII sources indicate.

According to Chen's estimate, the industry's added value is expected to hit 578 billion yuan (US$69.6 billion) for the entire 2003, up 44.5 percent. Tax revenue is expected to reach 143.1 billion yuan (US$17.2 billion), up 37.9 percent; and exports totaling to US$180 billion, roughly 34 percent of country's total exports.

Based on the solid foundation laid in previous years, China aims to become a large country in the IT industry with strong competitive strength, Chen said.

For the first three quarters in 2004, China's IT industry witnessed a 40.5 percent rise in added value, which compares to 15.5 percent for all the country's industries during the same period.

Chen noted that profit growth of the IT industry for the first time exceeded the industry's turnover growth speed. Production, sales and profits of the industry grew hand in hand.

According to statistics for the first three quarters of 2004, sales income of China's IT industry totaled 1.88 trillion yuan (US$226.5 billion), up 40 percent from the same period in 2003, and the industry's added value rose 40.5 percent to 363.2 billion yuan (US$43.8 billion).

For the same period, China's IT product foreign trade volume jumped 49 percent to hit US$236.7 billion and exports were worth US$144.6 billion.

The consolidation of the country's top 100 IT companies helped optimize the industry's structure, Chen said.

The January-September revenue of the 100 companies increased 24 percent, and revenues of Haier, TCL and Lenovo, China's top three IT companies, reached 78.6 billion yuan (US$9.5 billion), 31.4 billion yuan (US$3.8 billion) and 28 billion yuan (US$3.4 billion) respectively.

Chen said another contributor to the industry's booming development was foreign investment. Sales revenue from foreign-invested companies reached 1.32 trillion yuan (US$159.6 billion) during the first three quarters, up 45.1 year-on-year.

The IT industry in different regions continued growing momentum for the first three quarters of 2004. Shanghai, Suzhou and Fujian, all in East China, respectively reported increase rates of 97.7 percent, 70.7 percent and 34.2 percent.

Supported by preferential policies for regional development, the country's northeastern and western regions also showed robust growth in the IT industry, with Northeast China's Jilin Province hitting a 29.2 percent growth, and both southwestern Guizhou Province and northwestern Qinghai Province reaching more than 50 per cent.

The software industry's sales revenue also increased by 32.5 percent to reach 180 billion yuan (US$21.7 billion) for the first three quarters.

(China Daily December 6, 2004)