Edited by Haitong: the Autonomous and controllable Policy of the Great Power of ICT
Editor's note: CITIC pointed out that China is the world's largest exporter of ICT, but the core components and basic software in the industry are heavily dependent on the outside world. Under the logic of self-control, the state has issued a series of support policies, and ICT has ushered in a good opportunity for development!
ICT mainly refers to information and communication technology, which is an organic combination of telecommunications services, information services, IT services and applications. At present, China is the largest ICT exporter in the world, and its export volume has increased rapidly from US $19.7 billion in 2000 to US $527.2 billion in 2016, with an average annual compound growth rate of about 23%.
The ICT industry chain is divided into four levels from hard to soft. The development of basic hardware and application software in our country is good. They are core components, basic hardware, basic software and application software. Among the four levels, domestic brands are more mature in basic hardware such as smartphones and radio frequency base stations, and also have a certain competitiveness in application software represented by ERP and office suites.
The core components and basic software in the ICT industry are heavily dependent on foreign countries, and Sino-US trade frictions and ZTE embargo force China to take the route of self-control. On the one hand, China imports a large scale of core components represented by integrated circuits, reaching 227 billion US dollars in 2016, especially high-end products are almost entirely dependent on imports. On the other hand, China's basic software market is also dominated by foreign giants, such as Microsoft Corp in the operating system. Over-reliance on imports will not only compress the profit space of China's ICT industry, but also make the whole industry face the risk of being "choked" by the country.
Since 2011, China has continuously issued documents related to self-control, and its policy means include four types: the first is financial support, including tax concessions, special funds, government purchases and major strategic projects. The second category is the investment and financing policy, which is divided into direct financing and indirect financing, in which direct financing includes not only encouraging VC/PE investment, supporting IPO and issuing bonds, but also the integrated circuit fund model of equity investment by leveraging social capital. The third category is to set up a leading group for the construction of a national manufacturing power to carry out overall planning and coordination. The fourth category is other policies such as intellectual property protection, which helps to build a better environment for innovation. Generally speaking, financial support and investment and financing policies are the main means.
Financial support is mainly through tax concessions, special funds and major strategic projects to directly support enterprises, and indirectly stimulate demand through government purchases. Tax incentives reduce the burden on enterprises, and its scale reached 240 billion yuan in 2017. The total size of each special fund is expected to exceed 380 billion yuan, some of which will be used for the ICT industry, which shows the degree of support. Major strategic projects use financial funds to support specific industries, such as the "909" project in the 1990s, with a financial fund of 4 billion yuan, targeted to support the development of China's integrated circuit industry. Government purchase can boost the demand for domestic brands and help to establish the image of domestic brands.
Investment and financing policies dredge direct financing and indirect financing mechanisms, in which the equity investment model represented by integrated circuit funds is worth using for reference. The direct financing methods of the ICT industry are flexible and diverse, especially the first phase of the National Integrated Circuit Industry Investment Fund, with a scale of more than 130 billion yuan, and led local governments to set up more than 600 billion yuan of industrial investment funds. According to Xinhuanet and other reports, the second phase of the fund-raising has been basically completed, the size is expected to be between 150 billion and 200 billion yuan, the support will not be reduced.
CITIC is optimistic about the investment opportunities brought about by large funds to support integrated circuits and the purchase of software by the party, government and army.In terms of hardware, pay attention to the leaders in related fields.Semiconductor Manufacturing International Corporation, Zhaoyi Innovation and Hua Hong Semiconductor. In terms of software, pay attention to the leading Chinese software in related fields. In addition, competitive applications are expected to superimpose the wave of localization driven by the purchase of the party, government and military. It is recommended to pay attention to ERP leader.User networkAnd office suite dragonTou Jinshan software.
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