China outlines plans for electronic information industry

The Chinese government has unveiled detailed requirements intended to increase mergers in 9 sectors. The Electronic Information industry is one of them. It's one of the engines of the country's economic growth. Xie Sisi reports on how the plans are enhancing international competitiveness.

Computers, smartphones and televisions, it's hard to live without them. They're also the strength of China's electronic information industry.

At a recent central economic work conference, the government says it will adjust the industrial structure and resolve overcapacity problems plaguing the sector.

Li Yan, institute director of China Center of Information Industry Dev't, said, "China's electronic information industry has achieved continuous and dramatic development during the last three decades. But due to the European sovereign debt crisis and gloomy global economy, we saw a decline in the growth rate of the world's electronic information industry. And China has suffered from a decrease both in external and internal demands. This again shows the structural problems in this industry. Overall, we still see a growing trend in this sector."

According to China Center of Information Industry Development, the scale of China's internet market will reach 489.6 billion yuan in 2013, and the growth rate will maintain a level over 30 percent in the next 3 years.

China's electronic information industry grew rapidly after economic liberalization accelerated its digital development. Since Febuary 2009, the industry has become one of the most essential pillar industries for the nation's economy.

Li Yan says the industry faces three major problems.

Li Yan said, "One is a lack of internal growth power, since we still highly depend on manufacturing and processing. We also suffer from weak innovation and our country is still at the low end of the international value chain. Second, low industrial concentration means low profit, for instance, in 2011 the total revenue from the Chinese Mainland's top hundred electronic information companies was twice that of Apple. But the profit was equal to only 40 percent of Apple's. Finally, we also need to increase our industrial integration."

When it comes to mergers, Li Yan says there are two major directions to increase China's international competitiveness.

Li Yan said, "One is to develop horizontal mergers. Similar enterprises coming together will reinforce the specific electronic products. Vertical mergers will help form large and representative enterprises of the industry."

Industrial experts say they're optimistic about China's electronic information industry. They believe information consumption will play a big role in the country's policy of stimulating domestic consumption.