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Spending on electronics and IT continues to rise

THE fixed-asset investment in China's information technology and electronics industry continued to increase at a higher growth rate in the first two months despite the tough economic environment, the Ministry of Industry and Information Technology said yesterday.

In January and last month, the fixed-asset investment in the IT sector reached 30.66 billion yuan (US$4.50 billion), a jump of 25.6 percent year on year, compared with the growth rate of 20.5 percent last year, according to the ministry.

The electronic component and semiconductor sector saw a surge in investment in the period but spending in telecommunications equipment and computers slowed or even dropped, the ministry said.

China is the world's biggest laptop, cell phone and TV manufacturing base.

The investment from domestic firms grew 44.6 percent to 15.37 billion yuan, 19 percentage points higher than the industry growth rate.

The government is encouraging development of the flat panel display, semiconductor, third-generation mobile communications and software sectors, instead of just assembling and manufacturing low value-added products.

State-owned Datang Group recently announced it would invest US$172 million into Semiconductor Manufacturing International Corp and cooperate with the biggest wafer manufacturer on the Chinese mainland on 3G development.

China has also announced a 4-trillion-yuan stimulus package to boost the economy and has unveiled plans to support 10 major industries, including electronics.

In the first two months, the electronic component industry investment jumped 26.9 percent to 9.14 billion yuan.

Investment in the computer industry was 2.06 billion yuan during the period, a 10.1-percent rise year on year, lower than the 66-percent growth a year earlier.



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