China to lead APAC tech spend, 5G race ahead of global markets
China is expected to remain Asia’s largest spender in technology, forking out US$256 billion this year and US$273 billion in 2020, as well as lead global markets in 5G where the country’s investments in telecommunications account for 57 percent of its overall tech expenditure. In fact, it has outspent the US by US$24 billion in 5G since 2015, with its three major telcos unveiling plans to launch commercial 5G networks by next year, according to Forrester.
The research firm projected that tech spending in the Chinese market would climb 4 percent this year and 6 percent in 2020, despite ongoing trade tensions with the US that had slowed China’s economic growth. Japan, at US$198 billion, would be the region’s second-largest tech spender this year and, together with China, would contribute 60 percent of the total Asia-Pacific tech budget.
India would place third at US$70 billion, Forrester predicted, while South Korea and Australia would each spend US$50 billion. Countries such as Taiwan, Indonesia, and Hong Kong would each spend between US$10 billion and US$30 billion, with Singapore as pack leader.
“In addition to its slowly progressing smart nation vision, Singapore is doubling down on digital to boost the competitiveness of enterprises at home and in the rest of Asean,” Forrester said. “Singapore also sees artificial intelligence (AI) as an important enabler of long-term sustainability. The entry of digital-native firms like Amazon and Alibaba into Southeast Asia should create the necessary urgency for sectors like retail and logistics in other Asean markets to begin a long-overdue digital transformation.”
However, growth in the Asia-Pacific region’s technology spending would slow to 4 percent next year amidst bleaker market conditions and waning tailwinds, the research firm said. It noted that digital transformation initiatives in 2019 would be more pragmatic and focused on improving operational efficiencies and agility.
China also adopt a similar outlook in its digital transformation efforts as businesses looked to navigate effects of the ongoing trade conflict and a slowing local economy. Its investment in telecommunications, though, would remain robust and China this year was “best positioned” to win the global race in 5G implementations, Forrester said.
It added that South Korea also was gunning to be a key player in 5G and AI, and would continue to aggressively invest in 5G technology development this year. Local telco KT had set aside US$20.5 billion for its 5G Open Lab through to 2023 and was expected to roll out one of the first global commercial 5G networks this year.
The research firm further noted that public cloud adoption was growing in Asia-Pacific, particularly China, Australia, and New Zealand. Spending in this market, comprising public cloud platform services, middleware, and applications would climb to US$24 billion in 2020, up from US$18 billion in 2018.
China tech spending to hit $273B amidst US trade war, slowing economy
Chinese businesses are projected to spend US$256.61 billion on tech this year and another US$272.84 billion in 2020, focusing their investments on transforming operations and improving efficiencies as they brace themselves for an uncertain geopolitical climate, says Forrester.
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