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E-government Market Set to Increase
China's e-government software market is expected to become a major battle ground for domestic manufacturers.

The difference between China and other countries when it comes to government business, has brought unique advantages to domestic firms involved in the development of software for use by government agencies.

However, only those Chinese software developers who are strong on the technology and after-sale service are capable of taking on the job, said a researcher of the State Council's Development and Research Center.

Those companies which have a proven competitive track record, coupled with rich experience in software development, are expected to stay the course and go on to establish firm relations with government bodies.

According to the State Informatization Leading Group, the State will gradually increase levels of spending on software over the next few years.

At present, China's spending on software accounts for only about 8 percent of the total of e-government system construction, a much lower rate than that of most advanced countries.

The construction of an e-government system focusing on software development is under way across the country, while the demand for e-government solutions is expected to witness a rapid increase.

The State Council's Development and Research Center predicts that China's e-government systems market will reach 54.8 billion yuan (US$6.6 billion) by 2004.

The market for software for government use will increase from 2.5 billion yuan (US$300 million) in 2001, 8 percent of the total market of e-government systems, to 5.8 billion yuan (S$699 million) in 2004, 11 percent of the total.

A significant number of software suppliers and developers will benefit from the competition generated by the e-government market, a researcher with the center said.

It is, however, essential that government agencies shift the focus of their attention from updating their computer systems to improving e-government software solutions, he said.

A group of large and technically advanced Chinese companies have produced a series of software for taxation information systems and solutions for financial management and public security, all of which are of great assistance in meeting the demands of the government workload.

An official survey shows that government agencies have set up over 3,000 websites. However, many fail to provide detailed and timely information and lack the capability for exchanging information with other websites.

These systems have not been fully utilized so as to improve the efficiency of government and reform many of its archaic practices.

A plan of the State Council's Informatization Office pointed out that the development of e-government systems will focus on building databases for the administration of the population, geography and macro-economy.

(China Daily February 11, 2003)

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