Room for Improvement
Meanwhile, Huang said he believes, "China will be the leader in the global IT industry in five to 10 years" if certain improvements occur. These improvements include advancement of innovative capabilities, enhancement of internationalized management abilities, and progress in product, technology, brand and talents within local companies, he said. Moreover, Huang noted that currently, "China is still a follower in the global IT industry. The country still lags behind in some aspects, such as industry standards, key technologies and products, independent IPR [intellectual property rights], efficiency of IT application scale.Click here to read about how open source could help China curb software piracy. In addition, Huang said on a scale of one to 10 he would rate the Chinese IT industry as a seven. "The main lowlights include lack of independent innovation for products and technologies, particularly for software and service, which are developing slowly; low ROI for IT investments level of application; rudimentary marketing tactics, which consist mainly of pricing, and may hurt industry development; and IPR protection needing more effort," he said. Yet, the presence of multinational IT and software companies in China has had "a positive impact" on the countrys IT industry by: promoting industry innovation and technology advancement; enhancing the efficiency of returns from IT investments; fostering local talents to enhance local companies competitiveness; enhancing the whole industry chains competency, including technology, product, channel, service, and application efficiency, Huang said. As for Chinas contribution to the worldwide IT industry, Huang said, "Chinas economy is developing rapidly and doing so in a sustainable way. Chinas IT market has huge potential and its rapid development is boosting the global IT industrys development." However, according to Huang, "Chinese companies are extremely competent in the areas such as large-scale manufacturing and other popular consumer IT areas; but multinational companies are more competent in the software and professional services market." Meanwhile, the keys to doing business successfully in the Chinese IT market include finding the "perfect" combination of technology and brand, establishing and maintaining strong relations with partners and customers and localizing operations and management, Huang said. In addition, IT companies planning to enter the Chinese market or to grow their business in the country would do well to establish connections with the Chinese government, Huang said. Relationships with the Chinese government are "very significant" for IT product and services suppliers. "Although China started market-oriented reforms some time ago, the governments impact is still significant," Huang said. "This is particularly true for industries such as finance, telecommunication, energy, communications, education and other key sectors. "It is very important to maintain good relations with government to better understand policy and development, and to build a good environment for a companys survival and continued development." Check out eWEEK.coms for the latest open-source news, reviews and analysis.
"But, on the other side, China has a healthy economic base, a rapidly growing economy, stable industry policy and huge potential for the IT market, especially with the rapid development of Chinas innovative companies."