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Tech & Digital

The tech & digital sector is one of China’s most dynamic and fastest-growing markets. This growth is fuelled by a combination of consumer demand among China’s middle classes and government policies designed to promote the wide scale adoption of tech & digital.

The 12th Five-Year Plan (2011-2016) explicitly outlined the Chinese government’s commitment to developing China’s technology infrastructure. This includes nationwide roll-out of next generation broadband, 3Network convergence (internet-telecoms-TV), and investment into the "internet of things" and cloud computing. 

An explosive growth in consumers' adoption of mobile is also helping to drive market demand. With more than 500 million mobile web users in China, demand is growing not only for devices, but also for software, apps and digital platforms, which service a wide variety of consumer deamnds, from healthcare and financial areas to e-commerce and social networking.  

Sector in more detail

China’s Internet industry is dominated by three main players: Baidu (search), Alibaba (ecommerce), and Tencent (social) (these are also referred to as ‘BAT’). Having built powerful client-data platforms in their respective areas, all three companies have been steadily diversifying, through both in-house development and M&A activity. These integrated ‘tech giants’ cover everything from eCommerce, gaming and digital entertainment, through to instant messaging services and eWealth management.

Adoption of tech & digital has been much slower in the Enterprise market.  According to McKinsey Global Institute only one-fifth of Chinese firms are using cloud-based data storage and processing power, compared to three-fifths of American business. Chinese businesses generally spend only 2% of their revenues on information technology, half the global average.  If challenges around security, piracy, and trust in outsourcing can be overcome, the productivity gains for Chinese firms in the coming years could be significant.

The Telecoms market in China is dominated by the Big 3: China Mobile, China Telecom and China Unicom.  Foreign companies are not able to obtain licenses for telecoms operations but recently there have been advances in opening the market to ‘virtual carriers’ for telecoms resale.  Despite this dominance, the Big3 like their global counterparts face a serious challenge from internet based communications which have the potential to reduce their role to a simple media channel. 

Smart Cities, an initiative of the national government, is another growth area for the tech & digital market over the next few years. By the year 2030, China will reach an urbanisation rate of 65% and will have 221 cities with a population greater than one million. Information technology is seen as playing a key role in helping to create the modern, energy efficient cities that are required to make this trend sustainable. The government has committed to investing £152bn in Smart City projects in China, with opportunities for foreign collaboration across a range of areas; including smart grid, sensors and monitoring, big data, cloud computing, e-Health, e-government, and so on.

Business Issues

A number of regulatory barriers exist for companies exporting tech & digital products to China. Tech & digital hardware suppliers need to ensure that equipment shipped to China has been China Compulsory Certification (CCC) approved. Software vendors are required to register with the China software association. Generally speaking, it is necessary to appoint a local Chinese distributor or agent to act as an importer, to assist with local regulatory issues and to minimize any delays caused during inspections by China Inspection and Quarantine (CIQ).

China’s Indigenous Innovation policies have also served to inhibit market access for British tech firms by excluding them from government procurement contracts. Any companies entering into JVs with Chinese partners are required to share technology/ IP, and to commit to jointly developing new IP within Chinese research centres. While this has had some positive effects, such as joint development of new global standards for mobile LTE, it also presents a challenge to companies looking to protect core IP assets.

Protecting intellectual property is still a major challenge for foreign tech & digital companies when entering the China market. While IPR legislation in China continues to strengthen (with China accounting for the largest number of patent applications worldwide), there remain inconsistencies in IP enforcement across the country. Registering IP in China, carrying out due diligence on local partners, and innovating to stay ahead of potential infringers are all requirements for tech & digital firms wishing to protect IPR when entering the market.

Internet security is another area which is increasingly challenging for foreign companies in China. While extensive software piracy makes China a particularly active virus environment, there are also major challenges in terms of ensuring device security. Growing cybersecurity concerns in China have led to policies restricting opportunities for foreign participation across a number of technology projects.

Key Locations

The tech & digital sector in China is spread across a number of key cities. Shenzhen is major tech hub (particularly for electronics and hardware manufacturing), and is home to leading telecoms firms Huawei and ZTE. As key first tier cities Beijing and Shanghai also have significant technology parks and clusters as well as HQ locations of numerous domestic and international tech companies. Hangzhou is home to Alibaba, while Chengdu and Dalian have both developed important centres for software, cloud computing and outsourcing.






CBBC Initiatives in the Tech & Digital Sector


Contact Our Advisers:








Mark Hedley

Region: UK - London & South East
Support type: General Business Enquiry
Industry: ICT
Tel: +44 (0)20 7802 2018



Kirk Wilson

Region: China - North
Industry: Retail, ICT
Tel: +86 10 8525 1111 ext. 707

Useful reports

E-commerce in China


CBBC’s Guide to E-Commerce in China is aimed at UK companies looking to sell to Chinese consumers via online channels. It provides an overview of the E-Commerce market landscape, major Chinese E-Commerce platforms and cross-border options. 


Mark Heldey

Region: UK - London & South East
Support type: General Business Enquiry
Industry: ICT
Tel: +44 (0)20 7802 2018
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