This was more than double IT spending amounting to $6.2 billion in the previous five-year period.

China's Science Minister, Xu Guanhua, recently told a news conference in Beijing: "The past five years can be regarded as the best period for science and technology development in Chinese history."

Mr Guanhua added that corporate IT Research and Development spending accounted for 65 per cent of the national total.

The Minister declined to specify which industries would receive the bulk of the funds, but highlighted the importance of the computer and telecommunications sectors in his speech.

China's recent home-grown technology innovations include the third-generation TD-SCDMA mobile standard and the "Godson" computer chip (which runs at a top speed of 260MHz); as well as successful missions of its Shenzhou series of unmanned spacecraft.

Mr Xu also pledged continued support for the Chinese mobile standard, which is expected to compete with rival European and U.S.-developed standards later this year.

Speaking of timescale, he added: "I believe there is still a long way to go before China has its own market and has its own competitive products in this market."

Independent estimates suggest the number of people employed in Chinese software companies currently numbers around 200,000 to 300,000. However, the supply/demand gap is overwhelming and the annual supply of IT professionals is estimated at 50,000 against a demand of 350, 000.

During a state trip to India last year, the then Chinese Premier, Zhu Rongji, told IT leaders that if India's software developers combined with China's hardware sector, the two countries would lead the world in IT.

Narayana Murthy, Director of Infosys - one of India's largest software companies - has previously expressed concerns that China could overtake India in the global software market ‘if it was not careful,’ despite the fact Indian software exports currently tower over Chinese exports with their 2001-2002 turnovers at $6.2 billion and $1 billion, respectively.

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Richard Powell, © Shout99.com 2003