China's software industry earned 390 billion yuan (US$48.75 billion) in 2005, a year on year surge of 40.3 percent, according to latest the statistics with the Ministry of Information Industry.

The software industry is still one of the fastest growing sectors in the country's electronic information field, with a growth rate that is 16.7 percent higher than that of the industry as a whole, said the ministry.

China's software industry witnessed a 40 percent annual growth rate over the last five years, expanding its share among the electronic information industry from 6.3 percent in 2001 to 11.2 percent in 2005.

The sales of software services and system integration have also become a new growth point for the software industry.

Statistics with the ministry show that the sales of software products were 206.65 billion yuan accounting for 55 percent of the industry's income, a decline of two percent over 2004. Earnings from software services surged 66.5 percent to 50.49 billion yuan and make up two percent more of total industry sales than it did the previous year.

The sales of system integration also increased 40.1 percent year on year to 132.9 billion yuan in 2005, said the ministry.

According to the ministry, China exported software worth US$3.59 billion last year, an increase of 28.2 percent over the previous year. According to the ministry, China has six major software exporting bases and 17 Chinese software companies have won CMM5-international certificates.

In addition, many Chinese software firms are shifting their focus to out-sourcing services for the international market.

Along with Japanese companies, more and more software firms from Europe and the United States are increasingly interested on China's software industry.

The ministry forecasts the software outsourcing business from the Europe and the United States will jump 50 percent in the next few years.

(Xinhua News Agency March 18, 2006)