Software sees solid growth in sales

China's software industry expects sales in 2000 to have hit 20 billion yuan (US$2.42 billion) despite the fact the industry is only one-fifth the size of China's computer hardware sector, according to a report from the China Software Industry Association (CSIA).

China has more than 10,000 software companies at present, among which 3,000 focus on software research and development, the report said.

Most of the firms are relatively small and employ less than 50 people.

China needs a group of software 'aircraft carriers' to support the growth of the industry, these are quite rare at the moment."

Software and hardware sectors should play an equal role in the country's economic growth. At the moment though the software industry is only 20 per cent the size that of the hardware sector, he added.

Operating systems, the basic software tool to run computers, have long been dominated by the Windows series, Developed by US firm Microsoft.

Software piracy has also severely hurt software companies. An official with the National Copyright Administration, who declined to be named, said most of the country's software products were pirated.

According to a report from the Ministry of Information Industry (MII), software piracy is regarded by 60.8 per cent of software companies as their No.1 enemy. But the sector has been given a boost by recent preferential tax policies and crackdowns on piracy, the report said.

Draft amendments to the current Copyright and Trademark Law that aims to bring China in line with World Trade Organization requirement were discussed last week by Chinas legislators.

Under the draft amendments, software intellectual property rights will be better protected.

Ten software conglomerates are expected to emerge in China within five years and the country is expected to have 50 famous software brands within the same time scales. Software exports are expected to exceed US$1 billion by 2005, the CSIA report said.

Zhu said China's software sector is expected to sell products worth 120 billion yuan (US$14.49 billion) in 2005, six times the level of current sales. Domestic software makers are making inroads into overseas markets, he added. Kingsoft, Founder and the Huajian Group are Chinese leaders in this field abroad. The three have entered the international word processing, publishing and computer translating software market.