Market Profile

Economic Growth

On December 11, 2001, China became the 143rd member of the World Trade Organization (WTO). With WTO membership, China is expected to accelerate its growth and make sweeping changes in nearly every sector of its economy, which is already the fastest growing economy in the world at 9.5% growth in 2004. As the world's fastest growing country, China overtook the U.S.A. as the number one destination for foreign direct investment with US$60.6 billion in 2004.

China's Next Frontier: Information Technology (IT)

No longer is China's IT industry associated with the image depicting a peasant carting a PC on the back of his bicycle. In stark contrast, international companies have, in recent years, started moving technology-intensive manufacturing industries, marketing operations, purchasing offices, product development and human resource development to China.

China Computer World Research ( CCWR) predicts that the 5 years from 2005 to 2009, the information technology in China will see a compounded annual growth rate of 18.5%.  The major drivers of growth will be government, enterprise, and individual demand for IT products and services. China's 2003 IT market size amounted to $30.5 billion (Rmb252 billion), up 11% over the previous year, according to CCWR.  The hardware market is expected to grow 10% in size to reach $23.01 billion (Rmb190.1 billion) in 2004; software to $6.53 billion (Rmb53.9 billion), up 25%; and services to $5.54 billion (Rmb45.8 billion), up 27% The market size is expected to grow by 15% to reach $35.1 billion (Rmb289.8 billion) in 2004. The best opportunities will come from government, manufacturing, power, transportation, banking, insurance, education and healthcare sectors.  With China's e-government program entering full implementation, government IT spending will focus on applications and services.  In the manufacturing industries, major customers will be the large and medium-sized enterprises from the petrochemical, automobile, metallurgical and chemical engineering industries.  IT investment in the education sector will enter a period of stable growth, with a shift of focus from the cities to the rural regions and an emphasis on customized solutions.  Although the banking industry's IT spending has entered a period of steady growth, current information systems and IT infrastructure will need to be upgraded, expanded or redeployed to meet new business needs.  So far, the insurance industry lags behind other industries in IT application.  With the booming of insurance business, IT spending in this industry will witness a period of high growth.   Steady growth of China's economy bodes well for the continued high growth of IT spending in the transportation sector.  With the completion of industry restructuring, China's power sector will see a sharp increase of IT spending in 2004.

Education & Training

China's economic success, combined with rapidly increasing foreign investment and aggressive IT growth plans, is putting significant pressure on the educational system to provide an adequate supply of trained, knowledgeable and skilled management and workers. Although the number of applicants for graduate study in China increased by 945,000 or 18% more then the previous year, China's state-owned institutions are able to meet only 32% of the demand. At present, Chinese institutions produce only 10,000 MBA graduates per year, a disproportionately small number considering the size of its population. It has been estimated that China requires about 300,000 MBA graduates in order to prepare for global competition expected from its WTO membership. Because the demand for higher education far exceeds the supply, competition among students for limited enrollment at higher education institutions is fierce. To close the gap between the supply and anticipated demand for education and training, China will be in need of foreign educational providers like CIBT to service the accelerating demand for post-secondary education learning.

Additional Information - click on the links below. . .

• Powerpoint Presentation

• Executive Summary