One anecdotal indicator of the rapid rise of the ICT sector is the increasingly high level of international political co-operation involved in the industry. The international supply chain of ICT goods and services – while not yet as important as oil – ranks increasingly high up the political agenda for trade and investment negotiations between countries.

Chinese premier Wen Jiabao and UK prime minister Tony Blair recently agreed that ICT is a key sector for co-operation between their respective countries. Last month, Mr Blair sent UK e-commerce minister Stephen Timms to China as the head of the largest UK software delegation. He was accompanied on his second trip to China by more than 100 UK companies, including telecommunications equipment maker Marconi, advanced microelectronics company ARM, and wireless communications specialist PicoChip.


Main attraction

In total, several thousand industry leaders travelled from Beijing, Shanghai and Chengdu to meet the UK delegation at the UK-China ICT week in Shenzhen. The event was born out of Mr Wen’s earlier visit to the UK in May 2004 and largely funded by the two governments.

Speaking at the event, Mr Timms said: “In 2003, China’s revenues from the information industries overtook those of Japan to become the second largest in the world. The UK is a centre for innovation and research in this field, and world-leading British ICT companies are well placed to expand in the Chinese market. I am particularly pleased to be meeting the Chinese minister for the information industry, Wang Xudong, during ICT Week.”

Chinese ICT companies, including China Telecom and Huawei, have already chosen to establish their European headquarters in the UK. Meanwhile, the ICT sector has grown to account for one-fifth of UK exports to China.

Among Mr Timms’ appointments during his trip was the opening ceremony of the Beijing office of advanced microelectronics company ARM, alongside Tudor Brown, the company’s chief operating officer.

“Beijing is widely acknowledged as one of the biggest semiconductor and IT centres in China. We see this office opening as a significant step in increasing our commitment to the China market,” said Mr Brown. “ARM partners have shipped more than one billion ARM processors in the past year, and we see China as a key market for further success with the ARM architecture over the next few years.”

ARM designs the technology that lies at the heart of several digital products, from wireless, networking and consumer entertainment solutions to imaging, automotive, security and storage devices. At the opening ceremony, ARM also announced four new licence agreements involving Chinese partners.

Worthy goal

Political interest in China’s growing ICT industry is clear. The country’s 10th five-year plan singles out the development of the information industry as a key national goal, worthy of investment and government direction.

Despite a recent slowdown in consumer demand, the country’s hunger for technology remains voracious. The demand for optical fibre is forecast to reach 16 million kilometres by 2005, up from 6.6 million in 1999. Meanwhile software sales in China are expected to top $30bn next year.

China’s telecommunications market is now the second largest in both network capacity and the number of subscribers and is set to become the largest market next year, according to the international IT trade fair CeBIT Asia’s organisers. China’s ministry of information recently announced that the average growth rate of the country’s ICT industry is forecast to exceed 20% in the next five years.

Meanwhile China’s mobile phone market looks set to grow to 300 million units by 2005, making it the largest cellular market in the world, according to CeBIT.