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China's software industry is expected to keep an annual growth rate of 30 percent from 2006 to 2010, and be worth 1.3 trillion yuan (US$162.5 billion) by the latter date.

 

Ding Wenwu, deputy director of the electronics and information technology products department at the Ministry of Information Industry (MII), gave the prediction at the 10th China International Software Exposition yesterday.

 

He added that software exports would reach US$12.5 billion by 2010, more than triple the figure for 2005, which was US$3.59 billion.

 

"From 2006 to 2010 we will attach great importance to the software industry, which is the core of the information technology (IT) industry," Ding said.

 

"It is of strategic importance to the enhancement of our national strength and innovative capability."

 

He said China had made substantial progress in software industry development over the past few years.

 

By 2005, the size of China's software industry was 390 billion yuan (US$48.75 billion), compared with 44.05 billion yuan (US$5.5 billion) in 2000.

 

But there is still a large gap between China's software industry and the same sectors in developed countries.

 

China's industry cannot yet meet the demands of social and economic development in the country, he said.

 

"The globalization and adjustment of the information technology structure is creating opportunities for the software industry in China," said Ding.

 

The MII has laid out several guidelines to help promote the software industry.

 

It will continue drafting industry policies and regulations that will benefit the development of the industry, and will work closely with other ministries, according to Ding.

 

Lou Qinjian, vice-minister of the MII, said a day earlier that a special policy to boost the development of the software and integrated circuit industry, which has been drafted by the MII, had already been submitted to the State Council and will be published very soon.

 

He added that the MII would take concrete moves to support China's software industry through, for example, setting up venture capital groups or government procurement.

 

The Chinese Government has taken similar action before.

 

In June 2000 the State Council released a document that outlined specified support in areas such as taxation and software engineer training.

 

Ding also emphasized the importance of intellectual property rights (IPR) protection.

 

"IPR protection will improve the overall environment for the software industry and create more demand in the market."

 

National leaders have emphasized the importance of IPR protection on different occasions this year, and the government has taken up the cause and cracked down on piracy in China.

 

In 2001, the MII, together with other three ministries, issued a document urging the use of copyrighted software in government sectors. It will soon launch a similar campaign targeting businesses.

 

For example in 2005, Evermore, China's domestic office software maker, won bids for office software products to be used in government sectors in 21 provinces, municipalities and autonomous regions.

 

In April, the MII and the National Copyright Administration said all PCs produced and sold in China must be installed with authentic operating software systems.

 

Ding also said the MII would set up a software talent training system in the next five years.

 

"Competition in the software industry is actually based on software talent," said Lou. "China has also made substantial progress in this respect."

 

By 2005, China had 900,000 software industry workers, a figure expected to grow to around 2.5 million within the next five years.

 

Ding said the MII aims to increase the number of key software enterprises with sales revenues of over 5 billion yuan (US$625 million) in China.

 

According to the latest ranking of the top 100 Chinese software companies, four reported revenues above that figure. They are Huawei, Haier, ZTE and UTStarcom.

 

And 26 companies reported a revenue of above 1 billion yuan (US$125 million).

 

(China Daily June 2, 2006)