China’s spending on products and services powered by information technology (IT) will continue to grow in 2020, as the government pledges more investment in “new infrastructure” to embrace digitalization.

The figure for this year’s IT spending is expected to hit 2.1 trillion yuan ($297 billion), representing a moderate year-on-year increase of 2.7%, according to a report by market research firm IDC.

IDC predicted that the biggest consumption source for IT products and services will be the economically developed Yangtze River Delta covering Shanghai and the coastal provinces of Zhejiang and Jiangsu, which will account for 23.6% of the total spending.

The second-largest consumption source will be the Beijing-Tianjin-Hebei region with a share of 16.6%, followed by the Greater Bay Area with 14.9%, IDC said. The Greater Bay Area links Hong Kong, Macau and some Guangdong cities into an integrated economic and business region.

Chongqing and the provinces of Hubei, Hunan, Jiangxi and Sichuan will collectively account for 12.1% of the total spending, IDC added.

Xiao Hongliang, a senior analyst at IDC, said that Beijing’s efforts to transform China into a digital economy and its bet on “new infrastructure” will drive the country’s IT spending growth at a time when the coronavirus pandemic is taking the shine off the Chinese economy.

“New infrastructure” refers to projects that support tech-based developments involving artificial intelligence (AI), the Internet of Things (IoT), big data, robotics and 5G networks, among others.

Contact reporter Ding Yi (yiding@caixin.com)

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