The Chinese Enigma: A look Inside

Meet  Kitty Fok, managing director of IDC China. Find out what she has to say about China’s economic landscape, government initiatives and what they all mean to international tech companies.

Today’s China is a very complicated place. Its economic growth and social development for the past 3 and a half decades have been a true miracle to the world, whereas the recent economic challenges that China is facing make many think that the miracle is over. There are a lot of questions with complex answers. China is a country best understood as shades of gray instead of black and white.

Q1: Is China’s economic miracle over? 

China’s growth has met great challenges. International tech vendors in particular are losing market share. But growth opportunities remain. China’s GDP grew in Q4 2015 and Q1 2016 although growth varied by sector. Despite current difficulties, China will surpass the US and become the largest 3rd platform spending market in the world by 2020, by virtue of its quicker adoption of new technology.

Q2: What are the themes and forces shaping the Chinese economy nowadays? 

China is a big market but not all market sectors are growing. China is in the process of transition on 4 aspects. First, China’s market and economy are transitioning from a focus on production and manufacturing towards services. Second, investments are shifting from high- to low-growth industries, while at the same time becoming more specialized and differentiated. Third, subsidies that used to promote exports are now pushing towards local production and consumption. Lastly, government processes and management are becoming more service-oriented.

Q3: How shall we interpret China’s 13th Five-Year-Plan and its implications on IT? 

The 13th Five-Year-Plan very clearly lays out 4 central objectives in which IT is going to play a key role, i.e. Services and Smart Industries, Innovation and Entrepreneurship, Environmental Protection, and Globalization. This plan also has 6 initiatives, namely, Made in China 2025, Internet+, Big Data, Smart Cities, Belt and Road, Secure and Controllable. Technology is a critical aspect for each initiative. Total investments from China’s 13th Five-Year Plan initiatives are estimated to reach US$7.4 trillion by 2020 driven by government spending and external sources.

Q4: What should international tech companies do in order to strive in China?

Partnership with local parties is a must along with a good relationship with the government. First, supporting the implementation of “Made in China 2025” will definitely help their cause; second, cooperation with Chinese Internet companies like Tencent, Alibaba, Baidu and the likes, along with capturing business opportunities from China’s “Internet+” strategy; third, “Big Data” is a focus so promoting and supporting implementation in Chinese enterprises will help; fourth, support China’s “Belt and Road” strategy; finally, cooperation with Chinese local government solution providers and promote solutions in support of China’s Smart Cities aspirations.

As IDC China’s managing director, Kitty Fok leads the IDC China Business Unit with a team of over 50 specialized analysts and oversees all research processes for the Greater China region. Kitty’s expertise includes an in-depth understanding of the IT market with a focus on emerging markets, China government agenda, as well as the fundamentals of forecasting, business development, and strategic planning/analysis.

Since joining IDC in 1996, Kitty’s involvement in Asia/Pacific PC market analysis and end-user research has contributed to numerous region-wide consulting efforts, specifically in the area of hardware computing trends in Asia/Pacific. Kitty works closely with clients such as IBM, HP, Dell, Lenovo, Microsoft, Intel, AMD, Toshiba, Fujitsu, Samsung, Apple, Acer, Cisco, Oracle, SAP, Huawei, China Mobile, and Government, to deliver in-depth analysis and dependable client advice.

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