Boston, MA -- (SBWIRE) -- 04/15/2013 -- China's IT spending growth is forecast to increase by 9.8% in 2013 to reach a total value of CNY858.2bn. This is robust growth but a modest slowdown compared with 2012 as economic growth slows slightly. However growth will remain robust over the medium term with CAGR of 12% 2013 to 2017. There will be a deceleration of IT investment and retail spending, but modernisation drives in sectors such as education, healthcare and manufacturing should keep the market in positive growth territory. Meanwhile, China's strategy to develop the western areas of the country should drive sales of IT products and services, even if the developed east-coast economy hits a slowdown.

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Headline Expenditure Projections:

Computer hardware sales: CNY511bn in 2012 to CNY553.7bn in 2013, +9.8% in local currency terms. Windows 8 and demand for new form factors such as tablets and hybrid laptops will boost sales.

Software sales: CNY101.6bn in 2012 to CNY113.2bn in 2013, +11.5% in local currency terms. Modernisation of Chinese companies, as well as the launch of Windows 8 will boost software sales. However piracy continues to be a major drag on both the consumer and enterprise markets.

IT services sales: CNY169.1bn in 2012 to CNY191.2bn in 2013, +13.1% in local currency terms. Growing demand in second and third-tier cities as enterprises invest to meet the challenges posed by growing demand for their services. Meanwhile the SME cloud market is a particularly strong source of growth.

Risk/Reward Ratings: China's score was 48.6 out of 100. China remains sixth in the Asia region in our latest RRR table, ahead of India, Thailand and Vietnam but still behind more developed Asian markets such as Singapore, Australia and Malaysia. The country's relatively low market risk score offset the boost from its IT market size, but China should continue to ride up the rankings over time.

Key Trends And Developments

The growth of the tablet market will be a key feature of 2013. The arrival of an increasing range, and lower cost, of tablets and laptop-hybrids using Microsoft's new Windows 8 and Google Android will add to competition for Apple, which has dominated the market so far. Apple has responded by introducing consumer credit in February 2013, with payments able to be spread over a period of up to two years, enabling a greater range of consumers to afford its products. It is no surprise competition is intensifying with tablet sales estimated to have passed 10mn in 2012, more than double the 5mn level in 2011.

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