The development of China's IT industry in 2017_The development of IT in the future

The China IT Industry Development Report (hereinafter referred to as the report) is divided into two main sections. The first part provides an overview of China’s IT development in 2017, while the second part looks ahead to 2018 and beyond. Let’s dive into the key insights with the help of our network communication expert. **2017 China IT Development Overview** The 2017 report continues to be based on the China IT Development Index, using public data sources across four dimensions: industrial strength, innovation, integration, and environment. These are measured through twelve key indicators that form the core evaluation model. This year marked the fifth release of the report, which analyzed eight countries. Based on the proportion of their IT industries in GDP, these nations were categorized into three stages: factor-driven, efficiency-driven, and innovation-driven. Each stage was matched with corresponding economic contributions and weights. The main countries included the U.S., Japan, Germany, South Korea, the UK, China, Russia, and India. [Image: The development of China's IT industry in 2017 and future trends] There are six major reasons behind the growth of the IT index: First, the overall industry level has steadily improved, placing China among the global leaders. In 2017, China scored 73.8, a 6.3-point increase from 2016—nearly a 10% rise. Although it ranked sixth among the eight countries, the gap with the U.S. narrowed to just 7.8 points. It was indeed one of the fastest-growing years for China’s IT sector. All four sub-indicators showed improvement. Industrial strength rose to 79.3, moving from third to second place, with a 5.5-point increase, or 7.6%. The industrial environment reached 75.9, still fifth but up by 5.51 points, or 6.8%. Industrial integration saw the most significant jump, climbing 13.2 points (a 17% increase), even though it remained sixth. Industrial innovation increased by 1.6 points (3.7%), keeping its sixth position. The rapid growth of the industry also boosted international competitiveness. The electronic information manufacturing industry saw revenue exceed 13.6 trillion yuan, rising by 13.2%, while the software and IT services industry reached 5.5 trillion, growing by 13.9%. Telecommunications revenue hit 1.3 trillion, up 6.4%. Notably, total telecom service volume surged by 76.4%, and broadband speed improvements significantly enhanced user experience. Costs decreased, profits increased, and the software and IT services industry reported a profit of 702 billion yuan, up 15.8%. While the growth rate was 15.8%, tax revenue jumped by 36%, showing strong financial health. Meanwhile, the cost per unit of revenue in the electronics manufacturing sector dropped by 0.24 yuan. High-end products and services became more prominent. Smartphones accounted for 74.3% of all phones, smart TVs for 63.4%, and IT services made up 53.3% of software revenue. Export performance also improved, with electronic manufacturing exports growing by 14.2%. Innovation was another key driver. The self-sufficiency rate of core components rose from under 30% to over 85%. Domestic CPU performance increased fivefold since the start of the 12th Five-Year Plan. Terminal CPUs now match global standards, and the installed base of domestic intelligent operating systems exceeded 100 million units. The "Double Creation" initiative also delivered impressive results. By 2017, there were 120 demonstration bases, over 4,200 innovation spaces, and 3,200 technology incubators. Central enterprises established 970 innovation platforms, including 121 internet-based ones. Combined with the "Made in China 2025" strategy, this laid the groundwork for the industrial Internet. Cloud computing continued to grow at a 30% annual rate, with Alibaba reaching over 10 billion in revenue last year. Zhejiang alone added 120,000 cloud users in a single year. Open-source alliances and standard systems were also strengthened. New technologies, industries, models, and formats emerged rapidly. AI platforms like Tencent’s and quantum computers were recognized globally. E-commerce giants such as Alibaba and JD.com expanded into new retail, while companies like VIPKID and Hujiang Net School gained popularity in online education. Industrial Internet platforms began to take shape, with Sany Heavy Industry and Haier launching their own platforms. Large enterprises accelerated digital transformation, and the Industrial Internet Alliance worked to build a standardized framework. Information consumption became a key driver of domestic demand, reaching 4.5 trillion yuan in 2017, contributing 0.6 percentage points to GDP growth. The shift from pure information consumption to "information + consumption" was evident, with applications in poverty alleviation and smart society building. The policy environment became increasingly favorable, with a focus on legalization and standardization. The 19th National Congress emphasized IT development, and policies like blockchain regulation and cybersecurity laws were introduced to ensure a safer digital ecosystem. While many achievements were made, challenges persisted. The consumer Internet dividend slowed, and competition in the Internet of Everything intensified. External pressures, especially from the U.S., also grew. **Outlook for IT Development in 2018 and Beyond** With the 19th National Party Congress and the “two sessions,” China’s digital construction entered a new era. The IT industry is set for a new generation of technological change, driven by 5G, AI, and cloud computing. These innovations will fuel high-growth periods and create new leading products. The integration of IT with the real economy deepened, especially in manufacturing. The Industrial Internet platform became central, with a focus on enterprise cloudization, industrial operating systems, and apps. New rules and norms will continue to evolve as IT reshapes traditional industries. Independent innovation reached new heights, with breakthroughs in supercomputing and quantum technology. Enterprises are becoming key players in the innovation system. Network infrastructure is evolving, with 5G trials and IPv6 expansion. The IoT is expanding, and the next-generation Internet will see deeper integration into various sectors. Overall, 2018 marks a pivotal year for China’s IT industry, setting the stage for sustained growth and global leadership.

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