"China has great potential from both a geographic and industry standpoint and there will be five significant trends in the coming years," said Ken Xie, general manager of IDC China.

He made the predictions at IDC Directions China 2003, the company's annual conference on China's IT trends, which was held online yesterday.

Xie pointed out that the first trend in China's information market is making the transformation from an adjustment period into a maturity phase.

Following the fast growth recorded from 1985 to 1999 and the adjustment period experienced in the last two years, the market will become more stabilized and see a steady increase in the next few years, Xie said.

"People will adopt a realistic attitude when it comes to IT spending and pay attention to the sustainability of their information system, not just focusing on direct returns."

The integration of information technology and telecommunications will be another major characteristic with the construction and use of networks, the IDC veteran analyst said.

China will also further see the adoption of information technology in small and medium-sized cities and companies, he said in an online speech.

IDC statistics indicate that in 2002, the market in county-level and below regions only accounted for one-fourth of the total IT market, but the proportion is expected to rise to about 40 percent by 2007.

The share of IT spending from small and medium businesses (SMBs) will also grow from 2002's 28 percent to 45 percent in five years.

"The IT applications in SMBs are at a very primitive stage, with a lot of potential," Xie said.

He said that businesses will have greater demands for industry-specific solutions from information systems, moving away from the use of universal business solutions, which are set to become the fourth trend in China's information market.

Last year, 43 percent of enterprises' IT spending was earmarked to industry-specific solutions, with that figure set to hit 67 percent by 2007.

With rich applications like online games, audio and video communications on the Internet, and online banking, the consumer IT market enjoys a rosy prospect for the future, Xie predicted.

He also said that network security systems, wireless local area networks, personal computer servers with a price less than US$25,000, industry solutions, and online games will become the five big opportunities for information technology firms.

(China Daily April 18, 2003)