China's Software Industry Sees Rapid Growth in 2005

Strategic Insights -

China's software industry experienced a remarkable growth in 2005, earning 390 billion yuan (US$48.75 billion), a year-on-year surge of 40.3 per cent, according to the Chinese Ministry of Information Industry. This significant growth outpaced the overall electronic information industry, which grew at a rate of 23.6 per cent. The software industry's expansion has been impressive, with a growth rate of 40 per cent over the last five years, increasing its share of the electronic information industry from 6.3 per cent in 2001 to 11.2 per cent in 2005. The industry's diversification has led to new growth points, including software services and system integration.

Key Takeaways:

  • China's software industry earned 390 billion yuan (US$48.75 billion) in 2005, a year-on-year surge of 40.3 per cent.
  • The industry's growth rate outpaced the overall electronic information industry, with a growth rate of 23.6 per cent.
  • China's software industry has experienced a 40 per cent annual growth rate over the last five years.
  • The industry's share of the electronic information market increased from 6.3 per cent in 2001 to 11.2 per cent in 2005.
  • Software services and system integration have emerged as new growth points for the industry.
  • Software products accounted for 55 per cent of the industry's income, with earnings from software services and system integration increasing by 66.5 per cent and 40.1 per cent, respectively.
  • China's software industry has six major software exporting bases and 17 Chinese software companies have won CMM5-international certificates.
  • Many Chinese software firms are shifting their focus to out-sourcing services for the international market.
  • The ministry forecasts the software outsourcing business from Europe and the United States will increase by 50 per cent in the next few years.

Statistics:

  • China's software industry earned 390 billion yuan (US$48.75 billion) in 2005.
  • The industry's year-on-year growth rate was 40.3 per cent.
  • The overall electronic information industry grew at a rate of 23.6 per cent in 2005.
  • China's software industry has grown at a rate of 40 per cent per year over the last five years.
  • Software products accounted for 55 per cent of the industry's income, with sales of 206.65 billion yuan.
  • Earnings from software services increased by 66.5 per cent to 50.49 billion yuan.
  • Sales of system integration increased by 40.1 per cent to 132.9 billion yuan.
  • China exported software worth US$3.59 billion in 2005, an increase of 28.2 per cent over the previous year.

Sources:

  • Asia Pulse, "China's software industry earns 390 billion yuan in 2005" (March 20, 2006)
  • Xinhua (2006)