Mainland business tech spending slows

Growth in information technology spending on the mainland has slowed more than expected this year, weighed down by the global economic uncertainty that has led to weak demand from businesses and the government.

Forrester Research, an independent market analysis firm based in the United States, cut its growth forecast for mainland enterprise spending on information technology goods and services to about 10 per cent from the 13 per cent estimated in January.

It calculated total technology expenditure by businesses and the government to reach 662 billion yuan (HK$811 billion) this year, up from 605 billion yuan last year.

This weakness, however, is likely to be short-lived. Forrester expects Beijing's economic stimulus efforts to deliver a boost in technology spending next year. Bryan Wang, a vice-president and principal analyst at Forrester, described lower demand from the mainland's public sector as a big reason for lower sales this year in enterprise hardware, software and services.

"Many of the government's stimulus projects concluded at the end of last year," Wang said.

He pointed out that the result was "a slowdown of revenue growth for a good number of the top multinational information-technology companies [operating on the mainland] for the first six months of this year".

Major players affected included International Business Machines, Microsoft, Oracle, Hewlett-Packard and Dell.