China’s software industry booming

China’s software sector recorded a 26 percent year-on-year increase in revenue to $103 billion during the first four months of 2012.

The growth is still 1.9 per cent down from the same period a year ago, but it is still  making serious money.

According to Digitimes, which was quoting the Chinese Ministry of Industry and Information Technology, revenue earned in April rose 25.2 percent year-on-year, and the growth rate was down 5.5 percentage points from the same period a year ago.

Since the second half of 2011, the growth rate of Chinese software exports remained below 20 percent.

During the first four months, software exports increased 10.2 percent year-on-year to $10.48 billion, with the growth rate down 13 percentage points from a year ago.

Chinese domestic industrial software companies are generally divided into three types: the first type of software companies were born out of the manufacturing industry, with a strong professional background, years of service experience, and advanced technical strengths. The second type are general software makers which are pretty ordinary by world standards.   Then there are software companies developed by research institutes of colleges and universities. They are advantaged in basic research and hold more products with independent intellectual property rights.

What might put the fear of god into many in the international software scene is that most parts of the Chinese software sector are by world standards under-developed.   To manage to make that amount of money at this point of the industry’s history is significant.

One of the reasons it does so well is that a few of China’s major industries, including aerospace, aviation, automobile and high-speed rail, rely on industrial software for product design. However, over 90 percent of their products were developed using large-scale imported software. Many large domestic enterprises in China are also using imported management software. This is mainly due to the lack of domestically-produced high-end industrial software and original technologies and transnational corporations. On the whole, China does not hold much edge in the field of high-end industrial software either.