Promoting China's IT consumption

China's State of Council issued some suggestions for improving information consumption to expand domestic demand on Aug 14. China seeks to boost public-sector and household spending on information consumption by more than 20 percent annually through 2015, the document said. By then, information consumption volume will exceed 3.2 trillion yuan and create 1.2 trillion yuan in net worth of output in related industries.

Miao Wei, the minister of Industry and Information Technology (MIIT), said establishing a long-term mechanism to promote information consumption will drive demand and stimulate the birth of a new economic growth point, improve consumption, industry transformation and people's livelihoods, which will benefit both short- and long-term interest according to Economic Daily.

"Information consumption has an effect on stabilizing economic growth and expanding domestic demand. We strongly believe it will play a more important role in the economy, thanks to the hotspots of information consumption springing up constantly," said Xu Yu, director of the information department at MIIT.

Information consumption is about Internet-related products and services. China now has a favorable foundation for information consumption. In 2012, according to statistics, information consumption volume reached 1.72 trillion, up 29 percent year-on-year, drove almost one trillion yuan worth of output for related industries.

"I think information consumption will become a pillar industry," said Cao Shumin, president of the telecommunication research institute at MIIT. "Because information communication has become a pillar industry already, and it continues to grow while other industries are shrinking."

"Information consumption is mainly based on mobile information, which reached 1.5 trillion yuan last year, with indirect pulls not included," said Luo Wen, president of the China Center for Information Industry Development.

Currently, information consumption in China has entered a rapid-growth period; market potential turned out to be new consumption hotspots and engines, driving the innovation of technology and breeding the new consumption mode. Simultaneously, information products and services have strong ties with other related industries, which will become a source of economic growth.

Information infrastructure will improve noticeably until 2015, as the document suggested, adapting to the economic development pace as well as helping to build smart cities. An active and healthy information consumption market will provide richer Internet-related products and services; enterprises will enhance the application of information; the demand for public service information will be expanded.

Promoting information consumption will improve livelihoods further, and will be reflected in education, medical care, hygiene, and pension funds, which can provide more and better choices for the public, while also reducing administrative costs.

To achieve the targets of breeding demand for information consumption, five primary missions are set out in the document: speeding up the evolution of information infrastructure, intensifying the supply power of information products, fostering the demand of information consumption, improving the level of public service and strengthening the consumption environment.

Miao Wei says that the strategy of establishing a public telecommunication service mechanism, the mandate of 4G, the prevalence of smart phones and the commercialization of cloud services will enhance the progress of information consumption.

In addition, more efforts will be made to apply information in vital fields, which will help build a secure environment for information consumption and protect personal details effectively.

The new revolution

One important acting points of guidance is eliminating the barriers in information consumption, such as poor support capability of infrastructure, high threshold of market access, and imperfect policies.

Six supporting policies are outlined in the document: the revolution of an administrative approval system, increasing financial policies, improving the environment of corporate finance, perfecting the telecom services, reinforcing related laws and regulations, statistical monitoring of information consumption.

MIIT will also compel the reduction of telecom fees and charge in a transparent way. One important measure is to encourage the influx of private capital into network infrastructure. More specific measures are needed to solve the problems of network security.