Institutional push for digital leadership drives China businesses

Many Chinese businesses are increasingly adopting digital technologies

The government initiatives to boost digital economy and digital leadership through the expansion of information and communications technology (ICT) infrastructure and regulatory support mechanisms are driving China’s enterprises to increase their ICT spending in 2022, finds GlobalData, a leading data and analytics company.

GlobalData’s recent ICT customer insight survey* reveals that about 47 per cent of respondents, who are key IT decision makers in the enterprises covered in the survey, claimed that there is a slight increase (1 per cent to 6 per cent) while 32 per cent claimed a significant increase (greater than 6 per cent) in their ICT budgets for 2022 compared with 2021.

Aasif Iqbal, Technology Analyst at GlobalData, says: “The ambitious government programs outlined in the 14th Five-Year Plan, which emphasizes on expanding the country’s already well-established digital economy and attaining technology leadership in the long-term, are the key contributors towards the overall positive ICT spending sentiment among the enterprises in China. Furthermore, many Chinese businesses are increasingly adopting digital technologies to maintain their competitive edge in the local as well as global markets.”

The survey further reveals that cloud computing is one of the top investment areas for China’s businesses in 2022. Businesses across the verticals have already been adopting cloud-based services, applications and platforms owing to their scalability, flexibility, and cost-effectiveness.

More than 75 per cent of respondents from the country confirm that their enterprise ICT budgets for cloud computing have increased in 2022 compared with 2021. Furthermore, local hyperscalers like Baidu, Alibaba, Huawei, and Tencent are consistently enhancing their capacities to serve the growing demand for cloud computing in the country.

Iqbal adds: “In China, cloud and internet-based operations and services are prevalent across the private as well as the government sector entities. Moreover, due to the strict data protection and localization regulations, the cloud space in China is mostly dominated by the local players.”

The rapidly increasing digitalization is also driving the businesses to increase their investment on IT infrastructure and services, apart from cloud. For instance, more than 75 per centof respondents in China have confirmed that their enterprises are prioritizing investment on high-end servers and managed servers over the next two years.

Iqbal concludes: “Disruptive technologies are finding increasing favor among the enterprises in China. The government has already set a blueprint guiding the commercial use of emerging technologies within its China Standards 2035 strategy. In response, the enterprises are ramping up the use of these technologies to support their digital transformation as indicated by GlobalData’s survey, where almost 80 per cent of the respondents confirmed increasing their disruptive technology budgets in 2022 compared to 2021, with AI and edge computing being the popular areas.”

*ICT Customer Insight Survey was carried out between May 2022 and June 2022. The survey respondents (100) included senior executives involved in IT decision making in enterprises cutting across several verticals and geographies.


Leave a Comment

Related posts