China Information Technology Report Q1 2016

BMI Industry View

SWOT

IT SWOT

Industry Forecast

Table: IT Industry - Historical Data And Forecasts (China 2012-2019)

Industry Risk Reward Index

Table: Asia Pacific IT Risk/Reward Index - Q1 2016

Market Overview

Hardware

Software

Cloud Computing

Table: China Cloud Vendor Developments

IT Services

Regulatory Development

Table: Government Authority

Regulatory Developments

Competitive Landscape

International Companies

Table: Apple

Table: Foxconn

Local Companies

Table: Inspur

Table: Neusoft

Table: Yonyou Software

Regional Overview

Asia - Local Vendors Leverage Emerging Lower-End Device Market

Demographic Forecast

Table: Population Headline Indicators (China 1990-2025)

Table: Key Population Ratios (China 1990-2025)

Table: Urban/Rural Population & Life Expectancy (China 1990-2025)

Table: Population By Age Group (China 1990-2025)

Table: Population By Age Group % (China 1990-2025)

Methodology

Industry Forecast Methodology

Sources

Risk/Reward Index Methodology

Table: IT Risk/Reward Index Indicators

Table: Weighting Of Components

China Information Technology Report Q1 2016

BMI View: The Chinese IT market is poised to return to high single digit growth in 2016 once again after ageneral slowdown in 2015 due to a slightly weakened economic outlook. We maintain the view that Chinawill continue to post strong growth and sales numbers in the IT market and its various subsectors. Thesupportive and forward-looking policy environment combines with market fundamentals to provide stronggrowth prospects resulting from the size of the population, rising incomes, relatively low penetration ofdevices and solutions and a supportive policy environment. There is however downside risk, not least forforeign vendors operating in China where the policy environment favours local enterprises. Nonetheless,we believe the outlook is positive overall due to the factors mentioned above.

Headline Expenditure Projections

Computer Hardware Sales: CNY577.0bn in 2015 to CNY610.9bn in 2016, +6% in local currencyterms. Sales will remain robust as tablet market stabilizes in 2016 after a weakened 2014/15.

Software Sales: CNY106.6bn in 2015 to CNY121.0bn in 2016, +13.5% in local currency terms.

IT Services Sales: CNY235.2bn in 2015 to CNY267.9bn in 2016, +14% in local currency terms.Corporate investments and state support for development of Chinese cloud computing industry will meanincrease in adoption rates will accelerate in 2016, driving IT services outperformance.