The Risks in Investing in Sichuan IT Industry
2.2.1 Small Current Market Share with Relative Weak Competence

As China became a full member of WTO, the IT industry is moving more and more nationalization and globalization. Sichuan IT industry has to directly competing against national and international competitors. The fears market competition is reducing the profitability margin. The phenomena results in inadequate input in IT R&D, which in turn has some negative impacts on Sichuan IT innovation and makes Sichuan IT rely on other intellectual rights. This is the major limit in developing Sichuan IT industry and prevents Sichuan to produce high value-added and Hi-Technology products that can compete in the international market with quality and competitive price at sensible scale.

Consequently,Sichuan does not have the absolute strong competitive advantages against same products categories in China except that the province is rather strong in the areas of home appliances, audio-video digital goods,and information security goods which have a high- market share in the domestic market.

Nevertheless, for the investors,lack of good competitiveness by the local firms does create good potential business opportunities.

2.2.2 IT Development Driving Force to be Improved

The driving force for IT application in Sichuan is to reengineer the tradition industries with informationalization applying IT technology. These traditional industries are faced with challenges in their efforts to develop. The industry structures have some structural problems. The operation system needs to be optimized. These issues, to some extent, hinder the informationalization process in Sichuan . For the same logics as above, these issues also present opportunities.

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