By Hu Hongjun

Founder Group's laser scanning phototypesetting systems have been exported to such countries and regions as the United States and Great Britain; Evermore Software's office software products have entered the market in Japan, North America, and Africa successfully; UFIDA Software Co., Ltd.'s enterprise management software has entered the market in Southeast Asia On the INT'L SOFT CHINA 2007 held recently, domestic software products with independent innovations and software brands drew close attention from people and became one of the highlights of the exhibition.

In recent years, China's software industry has been growing rapidly in terms of scales and the average year-on-year growth rate of sales revenues has exceeded 40 percent. In 2006, revenues of the software industry amounted to RMB480 billion yuan while realizing exports worth US$6.06 billion. Various enterprises have boosted their strengths up evidently, there has accumulated 13,000 verified software enterprises, among which 35 enterprises realized their respective sales revenues of over RMB1 billion yuan with their software products. The software industry is becoming a new growth point for the national economy.

With the support of guiding funds from the government, enterprises and the society have been investing more in research and development. Breakthroughs have been made in succession in the dependent research and development of operating systems, database, middleware, Chinese Office software, and information security software.

Up till now, the Linux operating systems of such enterprises as Red Flag Software Co., Ltd. and China Standard Software Co., Ltd. have been applied in fields of e-government and industrial informationization; the performance of such Chinese word processing software as Kingsoft's WPS, Evermore's Office software, Founder's typesetting system has reached the internationally leading level. The middleware of enterprises like TongTech, CVIC Software Engineering Co., Ltd. (CVIC SE), Kingdee International Software Group Company Limited, and Primeton and the enterprise management software products of UFIDA Software Co., Ltd., Kingdee International Software Group Company Limited, Digital China Holdings Limited, FAW Qiming Information Technology Co., Ltd. and Newgrand Software Co., Ltd are all provided with remarked advantages in market competitions in respective key application fields. A batch of security software products with independent intellectual property rights, including Rising, Kingsoft, TOPSEC, VenusTech, and 30wish, have taken up the leading place in the domestic market.

Statistics from the market also show such a point. Up till now, domestic operating systems account for over 25 percent in the software purchase of governments at the provincial level while domestic office software (kits) seizes 60 percent of shares in the market; domestic security software seizes 97 percent of shares in the market. Such a fact has greatly improved domestic software's confidence in development and users' credit degree.

To make substantial breakthroughs, the key for China's software industry is to cultivate a batch of internationally competitive self-owned brands. Statistics show that in 2006, there were about 80 domestic software enterprises that had employed over 1,000 staff members; the number of enterprises achieving a total sales revenue of RMB1 billion yuan from software increased from 12 in 2002 to 35 in 2006; and enterprises achieving a total sales revenue of RMB100 million yuan from software amounted to 396.

Domestic software enterprises are getting increasingly internationalized. Software and information services outsourcing industry has been developing fairly quickly and become a new growth point for the development of software and information service industry. In 2006, the scale of China's software exports amounted to over US$6 billion and revenues from the outsourcing of software and information service amounted to about US$2 billion. A batch of enterprises focusing on exports and outsourcing business, including Neusoft Group Ltd., SinoCom Software Group Limited, Chinasoft International Ltd., iSoftStone Information Service Corporation (iSoftStone) and CompuPacific International are growing up rapidly and the level of their outsourcing services has been improved continually.

At the same time, exports of software products with independent intellectual property rights continue to increase while the profit margin has also been somehow improved.

The rapid rise of domestic software manufacturers has also attracted the attention for international software magnates. In this June, IBM set up a relation of close cooperation with Kingdee International Software Group Company Limited after it began its strategic cooperation with UFIDA Software Co., Ltd. Microsoft has also developed 6 strategic cooperating partners in China, including Inspur Group, Chinasoft International Ltd., and Digital China Holdings Limited, and the scope for the cooperation between Software and domestic enterprises gets aggravated continuously.

According to the development plan, sales for China's software and information service industry in the domestic market will continue to grow at the rate of 30 percent or so during the Eleventh Five-Year Period and break through RMB1 trillion yuan, a great target, with the exports amounting to over US$10 billion; a number of backbone software enterprises with a respective annual sale of over RMB5 billion yuan will come into being, and more famous software brands will be cultivated; breakthroughs will be made on key products and core technologies for domestic fundamental software, thus making it possible for China's capacity in the research and development as well as services of software products and systems to basically satisfy the requirements on the development of the national economy and the informatization of the society.

As to the capacity to make independent innovations, China will play an active role in promoting the research and development as well as the applications of various embedded software products, take the chance of implementing national key scientific and technological special projects and converge energies to make breakthroughs on such core technologies as operating systems, database management systems, and middleware software and cultivate a batch of famous software brands and backbone software enterprises with independent intellectual property rights.

As to the development pattern, the Ministry of Information Industry is exerting all its strength to encourage the development of the industry by adopting the software, intensify the amalgamation and development of software and hardware, guide and facilitate software enterprises to have close combination with the transformation of traditional industries and develop application products and systems that can meet the demands of enterprise informatization. In China's key projects like e-government, modern long-distance education, informatization in rural areas, digital television and digital Olympic, the implementation of demonstrative projects for the software industry will be organized.

As far as the construction of bases is concerned, governments at various levels will fully play the functions of bases as incubators and platforms, guide the formation of a system and a perfect industrial chain for the software industry that get integrated research and development, production, services, and applications, accelerate the formation of scale advantage, cost advantage, and technological advantages, and make great efforts to promote the cluster development of the software industry.

Moreover, as far as internationalization is concerned, studies are being conducted in China on the development of policies and measures that encourage software outsourcing; a system for exploring services in the overseas markets is being established from such aspects as export finance and promoting cooperation between enterprises so that software enterprises' outsourcing capacity will be improved and domestic enterprises will receive helps in their exploration in the market. In addition, multinationals are encouraged to set up production and R&D institutions in China so as to drive China's software enterprises to develop in a favorable and rapid manner.