China preparing stimulus program to possibly spark PC, handset sales

China is introducing the plan as it faces an economic slowdown

China will soon roll out a plan to stimulate sales of IT products, which could help revive PC shipments in the nation, and further stimulate purchases of smartphones.

A mention of the plan was made by Miao Wei, head of China's Ministry of Industry and Information Technology, in an interview to Chinese state media shown on Tuesday.

China's State Council will very soon introduce a new proposal to encourage spending in information related products, Miao said in the interview. The purchase of IT services and the establishment of information platforms will also be covered by the plan, he added. Miao did not specifically refer to PCs and smartphones, but they will likely be covered under the program.

China is preparing the stimulus plan as the government faces an economic slowdown, and wants to bolster domestic spending. The country is already the world's largest market for PCs and smartphones.

The country, however, still has ample room to grow its technology sector, especially in the area of Internet usage. Only about 44 percent of the country's population currently goes online. Many others, primarily living in its rural areas, still don't know how to use computers, or have little need to surf the Internet.

The government's upcoming proposal to stimulate IT purchases could help further drum up sales of PCs and smartphones, said Antonio Wang, an analyst with research firm IDC. In the past, China has implemented similar plans that included offering government incentives for rural consumers to buy PCs, or exchange old electronics for news ones, he added.

"The government recently hasn't done much stimulus, so this has caused the PC market to decline," Wang said.

In 2011, China's then fast-growing PC market overtook the U.S. for the first time to become the world's largest. Since last year, PC market growth in the country has begun slowing down. In the second quarter, PC shipments to the Chinese market were down 14.5 percent year-over-year because of weak economic conditions and the popularity of tablets, according to IDC.

"If the government comes out with a new stimulus policy, I think this will have a positive effect on the market," Wang added.

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Michael Kan

IDG News Service
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