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More help for software firms

0 CommentsPrint E-mail China Daily, January 13, 2011
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China plans to continue preferential policies for the software and integrated circuit (IC) industries to accelerate growth, according to government officials.

The State Council said in a meeting on Wednesday that the nation plans to develop the two industries further by offering investment, financing and tax cut support, as both are "strategic emerging industries of the country".

The announcement came when China, currently the second largest economy in the world, is making more efforts to find a way to transform its economic growth mode and move its industries up the value chain.

The State Council said it will support transregional mergers and acquisitions of the two industries and roll out guidance for companies to set up venture capital and private equity funds in order to integrate resources.

It will also offer tax cut support for the industries, including value-added tax cuts for software products as well as sales tax and income tax cuts for companies.

The State Council said it will strengthen its support for research and development, bringing in talent, and improving market environment to help the industries develop. "China's software and IC industries have developed rapidly in recent years but the base of the two industries is still weak internationally," said the State Council.

Over the past 10 years, China's software industry registered annual growth of 30 percent on average. The proportion of software industry revenue in China's GDP climbed from 0.7 percent in 2001 to 3.2 percent in 2010.

The revenue of China's software industry exceeded 1.2 trillion yuan ($182 billion) in the first 11 months of 2010, increasing by 30 percent over the same period of 2009.

In June 2000, the State Council issued a milestone document to encourage development of software and IC industries by enacting several preferential policies.

The State Council's latest policies came as a continuation of support for the industries after the document in 2000 expired on Dec 31, 2010.

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