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Expert: China still needs to go hard for stronger software

China needs improvement in high-end software to help the country grow from a big software country to a software power. [Photo/VCG]

Chinese companies have gained more approvals in the Chinese market with more innovative technologies and products, but still need improvement in high-end software to help the country grow from a big software country to a software power, said industry experts.

“The country’s software industry has achieved a comprehensive improvement in scale, quality and efficiency over the past decade, and has vigorously driven the development of the digital economy,” said Lyu Weifeng, secretary-general of the China Software Industry Association.

According to Lyu, business revenue of the software industry increased to about 9.5 trillion yuan ($1.42 trillion) last year from about 2.5 trillion yuan in 2012 with an average annual growth rate of 16.1 percent each year.

The latest data from the Ministry of Industry and Information Technology also showed that software business revenue maintained a double-digit growth to hit 2.77 trillion yuan from January to April, a year-on-year increase of 10.8 percent.

“The maturity of domestic operating systems, databases, office software and other basic software has been significantly increased, narrowing the gap with that of international mainstream products,” Lyu said.

According to relevant data, the HarmonyOS developed by tech giant Huawei Technologies Co has sold over 240 million units while WPS office software products of domestic software leader Kingsoft have been sold to more than 220 countries and regions.

The country’s 14th Five-Year Plan (2021-25) for Development of Software and Information Technology Service Industry emphasized that by 2025, the country will significantly improve its supply capacity of key software such as basic software and industrial software, and will build two to three influential open-source communities globally.

Wang Xingshan, executive president of tech company Inspur, recalled that it was rare for large manufacturing enterprises to use domestic industrial software 10 years ago due to limited technology, as well as weak management and coordination capabilities.

“But as local companies continued to tackle key technologies and make innovations, things have changed a lot,” said Wang, adding that 69 of around 97 central SOEs have applied Inspur’s ERP (enterprise resource planning) software to drive their digital transformation.

ERP software manages a company’s key conditions including finance, supply chains, operations and human resource activities.

Now in China, more than 70 percent of software for business management is made in the country. But the high-end market is still dominated by foreign software leaders like SAP and Oracle, according to the MIIT.

Revenue from software products, accounting for 25.6 percent of the industry’s total, has accelerated in growth with a 10.5 percent year-on-year increase during the Jan-April period, which was 0.7 percentage points higher than the figure in the first quarter, it added.

“Chinese companies have achieved some progress in basic software and quickly filled some gaps that have existed for a long time. China’s software industry will surely usher in a new golden period of development with a super-large market and abundant human resources,” said Ni Guangnan, an academician at the Chinese Academy of Engineering.

“But from a global perspective, China still lags behind leading Western countries. That is to say, the country has become a big software country but not a software power,” added Ni.

Such gaps mainly come from core software technologies, especially those related to operating systems and industrial software, software application ecology and talent construction, Ni said.

“The research and development investment of domestic companies is still much lower than that of foreign companies, and thereby some technologies cannot meet the needs of high-end scenarios,” he said.

“Whether it is a technical iteration or ecology construction, continuous capital investment is required. More policies are encouraged to support the independent innovation of enterprises, and to encourage enterprises to increase R&D investment for higher innovative capabilities,” Ni added.

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