Information and Communication Technology (ICT) for development of small and medium-sized exporters in East Asia: China
Over the past ten years, the most noticeable characteristic of China's industrialization is that the information technology (IT) sector has overtaken textiles, long the country's largest sector as well as the one with the highest growth rate. This rapid growth of China's IT industry can be attributed to the two critical strategies: First, the liberalization of investment and trade, which encouraged a large increase of foreign direct investment (FDI) into the IT sector. The Chinese government devised many policies to encourage transnational corporations (TNCs) to establish manufacturing bases in China and import capital and technology, two elements that China's IT industry lacked. The second element was the increased popularity of IT, that is, the higher demand for IT products. Clearly, the rapid growth of the IT industry and the increasing demand for IT products reinforce each other. This is the fundamental reason for the success of China's IT development policy. Also, closely tied to the spread of IT is the promotion of digitization by enterprises. Increased reliance on digitization by the management of small and medium-sized enterprises (SMEs) has created a large market for routers, servers, switches, broadband Internet and other IT products. SMEs have begun to see that IT products can be used not simply for processing or storing data on a single computer but also for managing the flow of information. The higher the level of digitization, the larger the demand for IT products by SMEs.