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.
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