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Dec 2016 - IDC Presentation - Doc # CHE41941516

1H16 Country Reports on IT Services - People's Republic of China

Authors: Richard Zhao, Henry Yan, Emily Zhang, Tommy Zhao, Nina Nie
On-line Presentation


This IDC Presentation provides a detailed analysis of the market and competitive landscape in IT services in the People's Republic of China (PRC) from January to June 2016 (1H16). It covers the market size movements and growth trends in each of the macromarkets (i.e., project oriented, outsourcing, and support and training services) as well as the key industries such as finance, manufacturing and resources, public sector, distribution and services, and infrastructure. The report also provides a market and vendor analysis of 3rd Platform technologies as the key market drivers. The competitive analysis section includes key strategies and activities of large global and local IT services providers in the market.

The data and insights within this presentation are part of the "Asia/Pacific Semiannual Services Tracker" research, which covers 14 foundation markets across 14 Asia/Pacific countries.

China's gross domestic product (GDP) expanded by 6.7% year over year in 1H16, down from a 6.8% gain in the previous quarter. But growth in China's tertiary industries — predominantly services — increased by 7.5%, outpacing growth in primary and secondary industries and for the first time generated more than half of GDP, or 50.5%.

China's IT services market grew sluggishly in 1H16 primarily due to a slowdown in growth in China accompanied by a steady progress on structural reforms and appropriate policy stimulus in the country. However, IT spend remained stable with an increasing number of enterprises adopting 3rd Platform technologies and the government focusing on technology to achieve its economic development plans such as the One Belt, One Road strategy, China Manufacturing 2025 Plan, and the 13th Five-Year Plan.

Outsourcing remained the fastest-growing market mainly driven by cloud services. Meanwhile, there has been a gradual improvement in industry customers' acceptance and recognition of outsourcing. China's economy is in the midst of a transition from a growth model based on construction and heavy industry to one that has relies more on consumption and services. Digital transformation (DX) is seen as an important step to take the services industry forward. Moreover, enterprises are leveraging DX to upgrade and expand their business to stay competitive in an increasingly competitive market. The project oriented market will benefit from the demand released from DX.