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Global crisis bites software and IT

CHINA'S software and information technology services revenue will grow 22 to 25 percent this year, almost half last year's growth rate, because of the global financial crisis, the top industry regulator said today.

The outsourcing income for finance and manufacture will drop but the revenue from telecommunications and government outsourcing is expected to surge, said the Ministry of Industry and Information Technology.

"The influence (of the crisis) has deepened. It has hit the software industry and many manufacturing firms in the coastal regions have shut down," the ministry said in a statement on its Website.

In 2008, China's software and IT services revenue was 156.7 billion yuan (US$23.0 billion), a 41.2 percent growth year-on-year, the ministry said.

Globally speaking, IT spending will grow less than 3 percent, lower than the previous forecast of 5 to 6 percent, according to US-based IT research firms Gartner Inc and IDC Corp.

The home-grown software industry has the advantage because it has a domestic market, which is fueled by next-generation mobile communications services and the government's stimulus packages.

In January, China issued 3G licenses to three carriers, which allows users to enjoy high-speed data services like video calls and film downloads on handsets.

The investment in 3G, which is expected to hit 200 billion yuan, includes the software infrastructure like the new charge system and service platform, industry officials said.

Meanwhile, China plans to spend 15 billion yuan on the industrial technology update, as a part of its 4-trillion-yuan package to stimulate the economy.

In the first quarter, the software industry growth rate will drop but it is expected to rebound in the second half, according to the ministry.


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