Chinese IT spending will reach $259 billion

Spending on information technology by consumers and enterprises in China is expected to reach $259 billion this year, offering substantial opportunities for technology and service providers, according to Gartner. This represents 5.9% growth from $245 billion in 2009.

Despite the global economic downturn, the Chinese economy grew 8.7% in 2009, with IT spending growing at 7.5% year on year. China's government responded to the downturn by injecting $698 billion in stimulus measures during the latter part of 2008, specifically addressing infrastructure and public facilities and organisations.

Gartner estimates $47 billion of this stimulus funding will impact on the Chinese IT industry from 2009 to 2013, with the highest level of spending in 2010 as most stimulus policy measures and plans were finalised and executed during 2009. IT spending represented 6.1% of GDP in 2009. As the IT market evolves and matures, this ratio will decrease slightly to 5.5% during 2013.

The biggest area for IT spending this year is expected to be telecommunications ($189 billion), followed by computing hardware ($45 billion), IT services ($11 billion) and software ($7.4 billion).

While they represent a smaller proportion of IT spending, IT services and software are expected to attain a faster growth rate than the hardware and telecommunications sectors during the next three years.

According to Gartner, the IT economy in China is driven by large verticals, rather than by consumer IT spending; however, it is slowly evolving towards the consumer market. In 2010, the largest industries (as measured by total external IT spending) are manufacturing, financial services and government.

However, Gartner estimates that the fastest-growing industries are healthcare, communications and utilities  -based on the compound annual growth rate (CAGR) of their external IT spending.