IDC Expects China to Overtake Australia as Asia/Pacific’s Largest IT Market in 2000

FRAMINGHAM, MA – May 31, 2000 – China is on the verge of overtaking Australia as Asia/Pacific's (excluding Japan) largest IT market. In 1999, China's IT market was over US$11 billion and accounted for 21% of the area's IT revenues. IDC expects it will grow to over US$14 billion this year.

"As an already-integrated part of the world economy, China currently lags behind the rest of the world in terms of IT adoption," said Ken Xie, general manager of IDC China. "However, both Chinese government policy makers and end users increasingly view IT adoption as a critical factor of China's membership in the international community. With this backing, China will experience strong growth in late 2000 and will maintain this strong growth throughout the next five years."

IDC expects China's IT market will more than triple by 2004, when it will account for almost one-third of Asia/Pacific's IT market.

Currently, hardware dominates the Chinese IT market, accounting for almost 88% of China's IT spending in 1999. However, IDC does expect a change in the country's IT spending patterns. "As the computer installed base keeps growing, demand for software and services will grow," Xie said. By 2004, software and services will account for 15.8% and 9.6% of China's IT market, up from 6.9% and 5.3%, respectively.

Finance represents China's largest IT industry. In 1999, it accounted for almost 31% of IT revenues with US$3.4 billion. Telecom was second with revenues of more than US$2.1 billion and a market share of just under 20%. "The chief reasons for the fast growth of the finance sector is because of its mission-critical business nature and because of the fast booming of China's economy over the last 20 years," Xie said. "As for the telecom sector, the consumer market is obviously one of the major contributing factors."

IDC expects these two industries will continue to be China's largest consumers of IT products through 2004. However, their market shares will likely decrease as other industries bulk up their IT consumption.

China's Internet market will also experience substantial growth through 2004. By 2004, IDC forecasts more than 33 million Internet users in the country. The Internet economy could grow even faster than the number of users. IDC expects it will increase at a compound annual growth rate over 170% and surpass US$114 billion in 2004.

IDC recently published China IT Market Overview, 1999-2004 (IDC #BAP2538G). The report examines China's IT market by region, industry, and product category. Detailed forecasts are provided for each segment. The data communications equipment, packaged software, IT services, and Internet markets are all thoroughly analyzed. The report looks at key trends affecting the market and discusses market drivers and inhibitors. To purchase the report, contact Cheryl Toffel at 1-800-343-4952 or at ctoffel@idc.com. For more information about IDC's Asia/Pacific research programs, please contact Beth Freedman or Lisa Bloom at 508-872-8200.

About IDC

IDC delivers dependable, high-impact insights and advice on the future of ebusiness, the Internet, and technology to help organizations make sound business decisions. IDC forecasts worldwide markets and trends and analyzes business strategies, technologies, and vendors, using a combination of rigorous primary research and in-depth competitive analysis. IDC provides global research with local content through more than 500 analysts in 43 countries worldwide. IDC's customers comprise the world's leading IT suppliers, IT organizations, ebusiness companies, and the financial community. Additional information can be found at http://www.idc.com.

IDC is a division of IDG, the world's leading IT media, research and exposition company.

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