Industry Trend Analysis - 13th Five-Year Plan To Provide Boost To Domestic IT, CE Sectors - FEB 2018


BMI View : The ICT sector is integral to China's 13th five-year plan (2016-2020) and will stimulate growth in other industries. While the plan lays out ambitious broadband targets, profitability in the telecoms sector will be largely undermined by the state-owned operators' need to compress prices to meet them. On the other hand, local IT and consumer electronics (CE) companies will gain from a higher budget for R&D (2.1% of GDP to 2.5%) and reduced reliance on imports for high-tech inputs.

The ICT sector takes centre stage in China's 13th five-year plan, with the state playing up the role of broadband connectivity and technological innovation as enablers of growth in various sectors. In particular, a key goal is for ICT to help the manufacturing sector to move up the value chain. The plan lays out a few key targets for the ICT sector, and the country's goal to establish itself as a 'Cyber power' by 2020 - which chime with the government's 'Made in China 2025' and 'Internet +' plans. As such, we see the new five-year plan as having a primary effect of building on existing trends rather than creating new ones.

Telecoms

Operators' Data Monetisation Abilities Constrained Despite Exponential Growth
China - Internet Penetration (2015-2021)
f = BMI forecast. Source: BMI, MIIT

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