State council: IT key to economic future in China

More efforts are needed to boost domestic information-sector consumption and make the industry a new driver of economic growth, according to guidance from the State Council issued on Wednesday. Promoting the consumption of information - a field that involves e-commerce, the Internet and cloud computing technology - can effectively drive demand, create new sources of economic growth and help consumption upgrading, said the document posted on the central government's website. China aims to boost public-sector and household spending on the IT industry by more than 20 percent annually through 2015, the document noted. By that year, which is the end of the 12th Five-Year Plan, information consumption volume will exceed 3.2 trillion yuan ($522 billion) and create 1.2 trillion yuan worth of output for related industries. Information consumption based on Internet-related products and services is expected to grow faster than the sector as a whole, with annual expansion of 30 percent. The sector will reach a scale of 2.4 trillion yuan two years from now. The e-commerce market will maintain its rapid development momentum. By 2015, e-commerce transactions are forecast to total 18 trillion yuan, with online retail transactions reaching 3 trillion yuan. First-half revenue for the e-commerce sector grew 45.3 percent year-on-year to 4.98 trillion yuan, the Xinhua News Agency reported on Wednesday. During the period, consumption of information products and services jumped 20.7 percent to 2.07 trillion yuan. Industry and Information Technology Vice-Minister Shang Bing said that information consumption is reinvigorating the economy and boosting domestic demand. However, the country still needs to improve its broadband facilities and services and step up Internet innovation, Shang said. The State Council's guidance calls for a significant improvement in the country's information infrastructure from 2013 to 2015. It mandates the implementation of the "Broadband China" strategy. Under that strategy, urban household broadband speeds should reach 20 Mbps overall by 2015, with some getting faster service of 100 Mbps and rural households having a speed of 4 Mbps. The government will speed up work to issue licenses for the fourth-generation mobile network this year and promote the convergence of the telecommunication, Internet and broadcasting networks into one complete system. China, which has the largest number of mobile phones in the world at 1.2 billion, is already building 4G trial networks in major cities. China Mobile Ltd, the country's largest telecom carrier, is promoting the domestic Time-Division Long-Term Evolution 4G standard and hopes to start a commercial rollout of 4G service as soon as possible. The guidance clearly expresses support for the TD-LTE standard and aims to push forward the deployment of TD-LTE networks. The government also hopes to enhance the supply capability for information products, including various smart devices such as phones and TVs. The country's first-half output of smartphones surged 120 percent to 214 million units, consolidating its position as the world's biggest smartphone market and manufacturing base. The document also calls for the commercial operation of cloud-computing services and the industrialization of the Internet of things and the Beidou Navigation Satellite system. Further, it suggests improvements in the public service information system. As growth in traditional industries slows, the nation is seeking new growth engines in emerging industrial sectors. Zhu Hongren, the Ministry of Industry and Information Technology's chief engineer and spokesman, said last month that the ministry hopes to make the IT sector the nation's third-largest, after real estate and vehicles.