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Chinese software industry slows from January to April

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BEIJING, May 29 (Xinhua) -- China's software industry posted slower growth in the first four months of this year due to increasing competition, weak external demand and a slow implementation of preferential policies, the Ministry of Industry and Information Technology said Tuesday.

Software industry revenues rose 26 percent year on year to 652 billion yuan (103.06 billion U.S. dollars) from January to April, slowing 1.9 percentage points from the same period last year.

The growth during the January-April period also marked a slowdown of 0.4 percentage points from the first quarter of this year, the MIIT data showed.

Software exports amounted to 10.47 billion U.S. dollars during the period, up 10.2 percent year on year, slowing 13 percentage points from a year ago and decelerating 4.9 percentage points and 2.3 percentage points, respectively, from February and March.

To boost the sector's growth, the Chinese government has created preferential tax policies for software and integrated circuit (IC) enterprises to spur technological innovation and industrial upgrades, according to a government statement issued on Thursday.

Backdated to Jan. 1, 2011 and effective until Dec. 31, 2017, enterprises that manufacture IC lines thinner than 0.8 microns will be approved for two-year corporate tax exemptions once they make a profit.

They will then be taxed on only half of their corporate income for another three years, according to a joint statement from the Ministry of Finance and the State Administration of Taxation issued earlier this month.

The country's current corporate income tax rate is set at 25 percent. Companies producing IC lines thinner than 0.25 microns or that have investment exceeding 8 billion yuan will be taxed at a discounted rate of 15 percent, the statement said.

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