Software Development in China: IBISWorld forecasts strong revenue growth for 2012
Source: ChinaSourcing View: 941 Date: 2012-01-11

The Software Development industry in China generated revenue of $284.02 billion in 2011, up 35.1% from 2010 (in constant 2011 dollars). The industry is estimated to have grown at an average annual rate of 29.6% over the five years through 2011. This high growth rate has been due to strong demand from downstream software users and the government, as well as solid pricing levels, according to IBISWorld, America’s largest publisher of industry research.

This industry’s development has been supported and encouraged by the Chinese Government. The industry offers consumers software products, services and systems integration. The software service segment has increased rapidly in recent years and has become an increasingly important contributor to revenue growth. In particular, software outsourcing firms have improved, with more external clients from the United States and Europe seeking Chinese software service providers that offer low prices.

The industry is also highly concentrated geographically. The top five provincial areas by revenue are Guangdong Province, Beijing, Jiangsu Province, Shanghai and Liaoning Province, which together will account for 66.5% of total revenue in 2011. This is due to the presence of relatively well-developed economies in these regions, and the frequent development of software bases by governments.

Mainly due to industry assistance from the Chinese Government and improvement of technology, this industry is expected to continue to develop quickly over the next five years. Industry revenue is forecast to increase to $868.21 billion in 2016, which represents an annualized growth rate of 25.0% from 2011.

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