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Shanghai to Surpass Beijing as Leading IT Market
Shanghai is to overtake Beijing as China's largest IT market in three years, according to International Data Corp£¨IDC£©.
Fred Wong, managing director for the industry analyst's China operation, said the Shanghai government's aggressive efforts in luring regional and international businesses to the city meant rapid demand growth for IT products.
By comparison, Beijing's share of the country's booming IT market slipped in the last few years as businesses that set up headquarters there because of Beijing's strategic importance shifted their expansion focus to Shanghai.
"The Shanghai government has been offering more business-friendly policies to attract business investment, such as tax holidays," he said.
Beijing has been seen as an important first stop for foreign companies stepping into the Chinese market due to its proximity to government offices and industry regulators from which approvals are sought.
IDC estimated Beijing and Shanghai accounted for 32 percent and 26 percent of China's IT market last year, which grew 40 percent to about US$16 billion from 1999. IDC has forecast the market would grow by an average 25 percent annually to US$48 million by 2005.
Mr Wong said key reasons for last year's high growth include greater than expected IT adoption by small- and medium-sized enterprises, driven by government policies promoting e-commerce.
He predicted finance, telecommunications and transport, which accounted for 27 percent, 22 percent and 11 percent respectively of IT spending last year, would remain the top three sectors in 2005.
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