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Revenue from China's information technology industry will grow at a slower pace in the next five years as the government and other big purchasers become more cautious in their investments, a research firm under the Ministry of Information Industry said in a recent report.

 

New services such as Internet-protocol television will help push Chinese IT, but they won't be enough to offset a slowdown in overall sales growth, Beijing-based CCID said.

 

China's IT industry posted revenues of 476.22 billion yuan (US$59.15 billion) last year, a rise of nearly 17 percent from the year before.

 

Annual growth through 2010, however, is expected to slow to a little over 14 percent, according to CCID.

 

In comparison, growth rates of 30 to 40 percent were achieved between 2000 and 2004.

 

"The IT companies have matured and become cautious, and the government's IT infrastructure is now close to a saturation point," said Hao Jianqing, a CCID senior analyst. " IT spending will be cut in the future."

 

Chinese governments at county level or above finished major IT infrastructure construction projects recently. By the end of last year, China had installed phones in almost every village, according to the Ministry of Information Industry.

 

"It's a natural thing that we can't rely on the government or big firms forever," Hao said.

 

New opportunities will emerge from IPTV, third-generation telecommunications and other IT services for the agricultural, medical and architectural sectors and for millions of small and medium-sized firms, according to Hao.

 

The promise of higher data transmission speeds from 3G phone services is expected to generate 33.6 billion yuan in investment this year, according to Norson Telecom Consulting, a Beijing-based firm.

 

Shanghai Telecom has launched a trial IPTV service featuring video on demand, aiming to attract 10,000 subscribers by the end of this year.

 

Remote medical and modern agricultural management systems are also among key technologies China will develop in the next five years, according to the State Council.

 

(Shanghai Daily February 20, 2006)