Page 342 - 2018 White Paper on the Business Environment in China
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8 White Paper on the Business Environment in China
2.11InformationandCommunicationIndustry
Background government investors contributing the rest. The fund will
be available to both state-owned and private enterprises,
China’s electronic information industry and is the first fund promoting service exports in China.
continued to grew quickly Boosting service exports will help China generate external
in 2016, with its value-added output expanding 10 demand for a sector it is trying to expand. The fund is an
percent year-on-year. The growth was 0.5 percentage extension of existing policies in 15 pilot programs located
points slower than that in 2015, but outpaced overall throughout China (Hsu).
industrial output growth by 4 percentage points,
according to the Ministry of Industry and Information Foreign investment is a key component of the
Technology (MIIT). The statistics took into account major reform plan, as China’s economic slowdown poses a
electronic information companies, or those with annual challenge to private and government spending alike.
revenues of more than 20 million yuan. The industry’s From January to November 2016, foreign investment
rapid development was boosted by Internet-based in services amounted to 515.3 billion yuan, an increase
innovations and government efforts to improve Internet of 8 percent. Of this, the high-tech services industry
infrastructure. China has over 700 million Internet users amounted to 88.14 billion yuan. Foreign investment
and 1.3 billion mobile phone users - more than any is highest in consulting and retail services, and helps
country on both measures. In 2016, China produced 2.1 to fill funding gaps as China’s economy struggles to
billion mobile phones, up 13.6 percent year-on-year, preserve growth. Although the service sector fund is not
the MIIT data showed. Smartphone output reached enormous, there is the hope that China can maintain
1.5 billion in 2016, accounting for nearly 75 percent of expansion of the service sector given potential demand
total cellphone production and rising 9.9 percent from from abroad. A focus on new areas within the service
2015. China is currently channeling 1.2 trillion yuan into sector, such as e-commerce and technology, is more
information infrastructure projects, mainly broadband likely to bring about growth than a cumbersome reform
and mobile network improvement. The plan runs of traditional sectors that are mired in regulation and
through 2018 (Xinhua, China’s electronic). underproductive. In addition, increased employment
in the service sector resulting from its expansion
Information tends to be correlated to higher incomes, which will
positively benefit China’s population and lead to higher
As China reduces its focus on manufacturing consumption (Hsu).
and attempts to restructure toward a service-based
economy, its leadership announced plans to set up China is also pushing for greater self-sufficiency in
an additional 30 billion yuan fund to encourage high computer chips, electric cars and other industries, calling
value-added service. The plan reinforces China’s current it a necessary strategy in the face of Western countries’
approach toward service sector reform, focusing largely controls of certain high-tech gear. As the country tries
on non-traditional sectors. Due to the emphasis placed to move away from low-end manufacturing, Made in
on China’s service sector, the industry weighed in at China 2025 is designed to juice economic development
38.4 trillion yuan in 2016, making up over 50 percent in emerging industries by providing $300 billion in low-
of GDP for the second year in a row. China is aiming to cost loans, research funds and other government aid.
get that number up to a 70-80 percent service sector But big companies in the rest of the world worry that
contribution to GDP, the average for advanced countries. the program gives an unfair advantage to homegrown
The new service sector fund will focus on high value- players, with the stated goal of Chinese companies’
added service exports like technology and finance, with owning as much as 80 percent of specific domestic
the state contributing 16.7 percent of the fund and non- markets in eight years. China’s Minister of Industry and
342
2.11InformationandCommunicationIndustry
Background government investors contributing the rest. The fund will
be available to both state-owned and private enterprises,
China’s electronic information industry and is the first fund promoting service exports in China.
continued to grew quickly Boosting service exports will help China generate external
in 2016, with its value-added output expanding 10 demand for a sector it is trying to expand. The fund is an
percent year-on-year. The growth was 0.5 percentage extension of existing policies in 15 pilot programs located
points slower than that in 2015, but outpaced overall throughout China (Hsu).
industrial output growth by 4 percentage points,
according to the Ministry of Industry and Information Foreign investment is a key component of the
Technology (MIIT). The statistics took into account major reform plan, as China’s economic slowdown poses a
electronic information companies, or those with annual challenge to private and government spending alike.
revenues of more than 20 million yuan. The industry’s From January to November 2016, foreign investment
rapid development was boosted by Internet-based in services amounted to 515.3 billion yuan, an increase
innovations and government efforts to improve Internet of 8 percent. Of this, the high-tech services industry
infrastructure. China has over 700 million Internet users amounted to 88.14 billion yuan. Foreign investment
and 1.3 billion mobile phone users - more than any is highest in consulting and retail services, and helps
country on both measures. In 2016, China produced 2.1 to fill funding gaps as China’s economy struggles to
billion mobile phones, up 13.6 percent year-on-year, preserve growth. Although the service sector fund is not
the MIIT data showed. Smartphone output reached enormous, there is the hope that China can maintain
1.5 billion in 2016, accounting for nearly 75 percent of expansion of the service sector given potential demand
total cellphone production and rising 9.9 percent from from abroad. A focus on new areas within the service
2015. China is currently channeling 1.2 trillion yuan into sector, such as e-commerce and technology, is more
information infrastructure projects, mainly broadband likely to bring about growth than a cumbersome reform
and mobile network improvement. The plan runs of traditional sectors that are mired in regulation and
through 2018 (Xinhua, China’s electronic). underproductive. In addition, increased employment
in the service sector resulting from its expansion
Information tends to be correlated to higher incomes, which will
positively benefit China’s population and lead to higher
As China reduces its focus on manufacturing consumption (Hsu).
and attempts to restructure toward a service-based
economy, its leadership announced plans to set up China is also pushing for greater self-sufficiency in
an additional 30 billion yuan fund to encourage high computer chips, electric cars and other industries, calling
value-added service. The plan reinforces China’s current it a necessary strategy in the face of Western countries’
approach toward service sector reform, focusing largely controls of certain high-tech gear. As the country tries
on non-traditional sectors. Due to the emphasis placed to move away from low-end manufacturing, Made in
on China’s service sector, the industry weighed in at China 2025 is designed to juice economic development
38.4 trillion yuan in 2016, making up over 50 percent in emerging industries by providing $300 billion in low-
of GDP for the second year in a row. China is aiming to cost loans, research funds and other government aid.
get that number up to a 70-80 percent service sector But big companies in the rest of the world worry that
contribution to GDP, the average for advanced countries. the program gives an unfair advantage to homegrown
The new service sector fund will focus on high value- players, with the stated goal of Chinese companies’
added service exports like technology and finance, with owning as much as 80 percent of specific domestic
the state contributing 16.7 percent of the fund and non- markets in eight years. China’s Minister of Industry and
342
