Consumer focus

Foreign companies need to focus more on China-oriented research and development, to identify areas such as those noted where there are openings to be exploited. Many foreign companies complain that Chinese tech companies get favors from the government. But both the central government and Chinese companies are putting almost all their resources into the China market.

To succeed, foreign companies will need to heighten their own focus on China, to better understand the changes underway and how to take advantage of them

Partnerships critical

Success will also require partnerships to be forged with Chinese companies. For example, there is Intel Corp's $1.5 billion deal signed in September with Chinese chip producer Spreadtrum Communications Inc to develop and market new smartphone chips.

Such ventures lead to the sharing of technological expertise and accelerate the development of new products. And by having a local partner, they help protect foreign companies from concerns that they might pose a security risk.

In the coming years, China will increasingly be at the center of global IT development, both as a market and a creator of new products. Whatever the challenges, foreign IT companies should not walk away from the business opportunities offered by these trends.

The author is managing director, IDC China. The views do not necessarily reflect those of China Daily.