China Software Industry Indepth Research and Investment Strategy Planning Report, 2013-2017

According to data from Ministry of Industry and Information Technology (MIIT), China software industry achieved 1336.4 billion Yuan of business revenue, with a year-on-year increase of 31%, accounting for as high as 18% of IT industry proportion. In 2010, the value-added of software industry rose to more 1% of the GDP, taking up more than 15% of the global software and information service industry share, with over 2 million employees.

In 2010, the top 100 software enterprises, which were intensively monitored and surveyed by MIIT, accumulatively achieved 290 billion Yuan of software business, with a year-on-year increase of 21%, accounting for 21.7% of the national revenue; they realized 55.3 billion Yuan of profits, with a year-on-year increase o f13%, among which there are 4 enterprises with over 10 billion Yuan of software business revenue, increasing one more enterprise than the year of 2009.

In terms of regions, the gathering trend of software industry develops from Beijing and Guangdong to coastal areas. In 2010, apart from Beijing and Guangdong, other coastal cities in the eastern China have the rapid momentum for development. The software revenue in Jiangsu, Liaoning, Fujian, and Shandong will increase by more than 35%, whose proportion in the national software revenue increased by 13.4%, 3.8%, 3.1% and 1.5% respectively over the year of 2001, thus with a total increase of 35%. It gradually breaks through the software concentration pattern of Beijing and Guangdong taking up more than half percentages of the industry (the proportion of Beijing and Guangdong decreased by 35.5%).

In 2010, central cities become key gathering regions for the development of software industry. The 4 municipalities and sub-provincial cities in China achieved 1064.3 billion Yuan of software revenue, with a year-on-year increase of 32%, accounting for 80% of the national software revenue, which is 1% faster than the national average growth speed. In middle and western areas, central cities play a more important role in developing software industry, for instance, the software industry in Wuhan and Changchun, two cities in central area takes up more than 30% of the proportion in central area. The fast development of software industry is closely related to policy support. On February 9,2011, the official “Notice of the State Council on Accelerating the Development of Software and Integrated Circuit Industries” (namely, “Notice” below), points out the State encourage and support the industry in terms of tax, investment, financing, research and development, import and export, talents, intellectual properity rights and market.

According to the “Notice”, the enterprises which are engaged in software development and testing, information system integration, consultancy and operation maintenance, and IC design will be exempt from business tax, which is directly beneficial for software and integrated circuit enterprises. In terms of the old version of “Notice”, the business tax-exempt enterprises limited in those which were engaged in technology transfer and technology development business, as well as the enterprises proving related technical consultancy and technical service business.

All in all, the new policy lays a foundation for the development of software industry during the “Twelfth Five-year” Plan period. Continue to conduct tax policy and strength the implementation of incentive policies and intellectual property rights of merger, export and corporation talents, so as to lead a sustainable development. Forward Company predicts, software industry will develop in several directions of network, service, intelligence, platform and integration. The key point is network, which will be a basic direction of the development of software technology. The focus of computing technologies is turning from computer to the Internet. The Internet, as a platform of software development, deployment and operation, will promote the upgrade and transformation of the entire industry. The SaaA, PaaS, IaaS and other services continue to emerge, whether Ubiquitous Network and the Internet of Things or Mobile Computing and Cloud Computing are all specific reflects of software network trend.

Qianzhan Business Information Co., Ltd. Industry Research Center
Research Team of Software Industry