China IT spending to remain robust

February 6, 2009

With most companies all over the world reporting that economic woes are forcing cuts in IT spending, there is at least one exception. China expects to continue spending as usual.

Corporations all over the world have reported that they are cutting IT costs, including hardware, software, and personnel. The global recession, truly affecting nearly the entire world, has technology vendors across the planet worried about 2009 revenues, and perhaps those in 2010. A recent study shows that China may be nearly immune to the problems that have affected corporations in other countries, according to a CNET news report.

The world financial study, done by Springboard Research, indicates that Chinese IT spending will be protected from slowdown by government initiatives and green spending. The Springboard report says that Chinese IT spending will reach $51.2 billion in 2009, representing a year-on-year growth of 11 percent. This comes at a time when the spending on IT in most countries will be going down instead of up.

Chinese IT expenditures in critical markets such as government, education, and telecoms will expand due to government stimulus package spending, said Bryan Wang, Springboard’s country manager for Greater China. According to his report, government-driven infrastructure spending will maintain spending levels in a large portion of investment in the country in 2009. In addition, IT expenditures relating to the expansion of 3G wireless networks will be a significant area of expense for telecom systems in China in 2009. The Chinese finance sector’s technology spending will remain firm, but the report notes that planners will exercise more caution when making purchases.

Wang notes, “Springboard Research believes the green data centers and related green IT services will become a hot area for these organizations in 2009. Enterprises will look to rapidly build out investments in green-field data centers, and this will also bring out the concept of virtualization and recycling with existing infrastructure, which is increasingly becoming a critical part of the investment moving forward.”

This widening gap in spending will do much to help China catch up with the Western world in the area of technology, which will in turn make Chinese companies more competitive in the years to come. The giant which is China continues to outpace its Western competitors in many area, including technology, making it an even larger force on the world stage.

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