Original URL: http://www.theregister.co.uk/2012/10/11/china_growth_slows_encourages_hitech_imports/

China wants more hi-tech importers

Beijing's deep pockets to the rescue again

By Phil Muncaster

Posted in Business, 11th October 2012 06:04 GMT

The wobbly global economy is set to further stunt growth in China’s domestic technology market, leading Beijing to offer even greater financial incentives to encourage more hi-tech imports to the country.

The Chinese government will offer 2.5bn yuan (£249m) in loan subsidies to importers of unspecified advanced technologies and raw materials, a 25 per cent increase on last year’s sum, according to Reuters.

Chinese imports actually fell 2.6 per cent in August from the same period in 2011 while exports rose only 2.7 per cent, less than expected.

Beijing will therefore be hoping this latest cash injection will help put its slowing economic growth back on track and reduce an embarrassingly high trade surplus which according to some estimates stood at over $26bn in August.

Forrester’s latest report, China Tech Market Outlook: 2012 To 2013, could be some cause for concern, however.

The report claims that domestic and multi-national tech vendors in the PRC are all seeing a slow-down in their operations, with growth for 2012 revised down from 13 per cent to an admittedly still-high 10 per cent.

At $105bn, China’s annual tech spending still ranks third globally behind the US and Japan, but per-capita IT spending in China is only four per cent of Japan’s and three per cent that of the US, showing clearly the massive potential for long-term growth, the analyst said.

Computer equipment and peripherals still remains the biggest tech segment for spending in China, and is set to grow eight per cent this year and 13 per cent next.

Software growth will slow in 2013 after the government’s scheme to kick out pirated software is completed but outsourcing will pick up, the report said.

Other tech areas pegged for stellar growth in 2013 – backed by more investment from government – include high-speed rail projects, healthcare and education and banking reforms. ®