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Chinese ICT hit by trade war

August 6, 2018

IDC China has published research showing the impact of the USA’s new tariffs on $34 billion (€29.4 billion) worth of Chinese imports, and the escalating trade war that followed.

The recently-enforced additional tariffs are having a particular hit on the Asian superpower’s ICT market, IDC China reveals. The growth of the country’s overall ICT market in 2018 has fallen from 9 percent to 8.4 percent, whilst the nation’s GDP growth has fallen from 6.7 percent to 6.5 percent.

According to IDC, “the Chinese ICT market is expected to suffer a greater negative impact from the trade war than China’s national GDP because the outlook of a lower GDP growth will affect ICT purchase and a cheaper Renminbi will significantly increase the overall cost of China’s ICT industry that rely heavily on imported technologies.”

However, IDC China also forecasts that the Government segment, which is most reliant of the ICT segment of Peripherals, will be hit by a “Low” impact, similar to the Healthcare segment and its IT services bracket.

IDC China offers advice to ICT vendors and end users, recommending that they closely follow the ongoing developments of the trade war and its impact, as well as making “proper adjustment” to the export and globalisation strategy, increasing market expansion in the European Union; it also advises vendors and users to “appropriately control the overall cost” in response to the crisis, calling this a “key measure”, and “continuously invest in core technologies and digital transformation.”

“While the China-U.S. trade war has some negative impact on the Chinese economy and the Chinese ICT market, globalisation will remain in the mainstream in the long run, and so will China-U.S. complementarity and cooperation, and digital transformation of economy,” explained IDC China’s Managing Director, Kitty Fok. “ICT vendors and industry users should take the current challenge as an opportunity by creating appropriate strategies of response and continuously investing in digital transformation enabled by new technologies to achieve technology-driven multiplication of insights, of development, of trust and, ultimately, of innovation.”


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