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China’s new tech sector is slowing to a crawl as domestic demand for consumer electronics continues to wane amid concerns about a rising debt-to-GDP ratio.
Tech exports slowed to a near-record low of 6.6% in the first three months of 2017, according to China’s Commerce Ministry, a sharp reversal from the previous quarter, which was up to 6.7%.
Exports have fallen by more than half since 2016.
As a result, the nation’s tech industry has fallen from a peak of nearly 5% of China’s economy in 2011 to less than 3% today.
The country’s exports have dropped by more about 80% since 2000, according the China Business News report.
The new data is an ominous sign that the tech sector’s fortunes may soon be in decline.
While the growth of China Mobile and Tencent in recent years has helped the tech industry to keep pace with domestic demand, the decline of foreign firms is having a similar effect on Chinese technology firms.
In recent months, Tencent has announced plans to invest $40 billion in local technology companies in the next few years.
While some companies are now getting their feet wet, the Chinese government has been slow to embrace the new trend of “Chinese homegrown tech” that’s gaining steam in the country.
The National Development and Reform Commission said last week that the government will create a new National Industry Authority to boost local innovation.
While the Chinese economy may be heading into a “fourth great depression” that has hit the tech-based economy hard, the country’s tech firms may be able to survive in a time of economic uncertainty.
In fact, some experts say that the country could actually benefit from having more domestic technology firms, which are able to diversify their investments.
China’s technology firms are already using technology to help them compete in China’s growing online shopping market, and they’re likely to continue to do so in the coming years.
For example, Chinese e-commerce giant Alibaba recently launched a new app called Baidu, which it says will help it compete with Amazon.com.
Alibaba and other companies have also started to tap into China’s burgeoning market for cloud computing, which they’ve used to create cloud-based services.
China has already started building its own Internet-based cloud infrastructure, and it’s likely to grow further in the future as the country gets richer and its economy grows faster.