Despite the Chinese government's drive to push ministries to purchase locally produced software, IDC China believes that foreign vendors will not be completely excluded from government contracts.

"It doesn't look possible," said Dorothy Yang, research director for software and services at IDC China. "For infrastructure software, like middleware and databases, I don't think the government can buy it locally."

Concerns are running high amongst foreign companies who see the IDC's projection of a US$426.8 million expenditure on packaged software by the Chinese government in 2003 to be slipping through their hands. That same figure is though to be likely to grow to $938.9 million in 2006. It is unclear whether the government intends any further restriction of foreign software–Microsoft itself says it has yet to receive official confirmation from the government of plans to stop buying foreign software.


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