Plenty of room to grow in software and IT security services

To further strengthen cybersecurity work, Yang Yuyan suggested giving full play to the leading role of top enterprises. Internet companies should genuinely shoulder responsibilities commensurate with their influence and set a demonstrative example. Core cybersecurity technology innovation should be pushed forward: enterprises, universities and research institutions should be supported in breaking through key core technologies, stepping up research in industrial internet security, AI security, 5G security and data security, and building a multi-domain, multi-level cybersecurity technology innovation system so that constantly changing security risks can be answered effectively. A sound cybersecurity ecosystem should be built, important industries and fields guided to increase investment, technology outcomes commercialised, products and services popularised, and the enthusiasm of cybersecurity firms, network operators, universities, research institutions and society at large fully mobilised.

Li Aidong, deputy director of the Cybersecurity Coordination Bureau of the Cyberspace Administration of China, set out four points: first, persist in preventing threats and strengthen the protection of critical information infrastructure — establish a protection system quickly, define the scope and objects of protection, and avoid an over-broad or generalised concept; second, persist in strengthening the foundation and vigorously promote the development of the cybersecurity industry; third, persist in putting education first and vigorously cultivate cybersecurity talent; fourth, persist in win-win cooperation — deepen exchanges on technology, talent, standards and rules, jointly address global cybersecurity risks and build a community with a shared future in cyberspace.

Li said that after more than 20 years of development China’s internet users have reached 802 million, with a penetration rate of 57.7%; the digital economy totals RMB 27.2 trillion, 32.9% of GDP. China is accelerating its Broadband China strategy, 5G R&D and industrial layout, and IPv6 deployment and application, promoting the integration of the digital and real economies, and moving from a large internet country toward a strong one.

Li stressed the need to see clearly that the cybersecurity situation is becoming more severe as cloud computing, big data, AI and other new technologies and applications develop rapidly; cyberspace’s connotation and extension keep expanding, competition intensifies, threats keep rising and personal-information protection problems are increasingly prominent — all parties urgently need to work together to safeguard cybersecurity.

Guo Qiquan, inspector and deputy director of the Cybersecurity Protection Bureau of the Ministry of Public Security, said the response to cyber warfare should be implemented from the perspectives of real combat, systematisation and normalisation, building a comprehensive cyberspace prevention and control system — moving from passive to active defence, from static to dynamic, from single-point protection to overall prevention and control, and from extensive to precise protection.

Building a broad internet security ecosystem together

Wu Hequan, academician of the Chinese Academy of Engineering, noted that the internet is changing rapidly and coverage is expanding; the technologies supporting it keep developing fast and emerging technology fields are in good shape. China has shown strong development strength in 5G, quantum information, AI, cloud computing, big data and blockchain. The arrival of the 5G era and industrial internet applications mean cyber attacks have more serious effects than before; all parties should work together to build a broad internet security ecosystem, and developing the cybersecurity industry is an urgent task.

Wu Lianfeng, vice president and chief analyst of IDC China, said that by 2022 at least 60% of global GDP will come from digitalisation, and in China the figure will reach 65%. At present China’s share of the global cybersecurity market is far out of proportion: the United States accounts for 44.2% and China only 5.9%.

Wu explained that China’s security market is still hardware-dominated at 61.3%, while globally software and IT security services take a larger share — so the Chinese software and IT security services market has considerable room to grow. IDC sees three trends. First, security is integrating ever more tightly with other technologies: 5G will be a key technology for the second wave of enterprise digital transformation, and by 2024 more than 60% of 5G connections will come from industry scenarios; by 2024 quantum computing will be substantially developed. Second, security depends increasingly on industry scenarios: IDC predicts that by 2022 60% of government departments will upgrade their control systems to protect critical infrastructure such as dams, public transport and nuclear plants from cyber attack, and that China’s smart-city investment will reach RMB 200 billion by 2022, driven mainly by digital government, public safety and traffic management. Third, there will be more M&A and alliances in the security market: in 2019 about 1,400 companies provided cybersecurity services or important products, and by 2023 the number of cybersecurity companies will fall nearly 40% from 2019.

Wu said the continued rapid growth of the global IT security market is the basis for a big opportunity. In terms of the size and growth of China’s IT security market by industry, government, telecom and finance are the core, far ahead of other industries, while manufacturing, education and public utilities, and transport grow faster than the market average. AI is the investment direction. Companies need to grasp the broad picture of enterprise security demand and build a broad security ecosystem that includes infrastructure, cloud platforms, APT platforms and multi-cloud management platforms.

Seeing is the key to answering cyber threats

On 19 August shares of several listed cybersecurity companies rose sharply. Wind data shows the cybersecurity index up 5.73%; by the close Renzixing, Zhengtong Electronics, Inspur and Koal Software had hit the daily limit, Nsfocus, Sinovatio and Jilin Zhaori Innovation rose more than 8%, and Westone, TRS, Bluedon and Tongtech more than 6%.

At the conference, Zhou Hongyi, chairman and CEO of 360 Group, said that in responding to cyber warfare, seeing is the key. Cybersecurity big data is the foundation of seeing, and it needs data from the whole network — enterprises and consumers alike. Only by looking at everything happening across the network from many dimensions can you really know what is happening in cyberspace. Threat intelligence and knowledge bases are the prerequisite for building AI on big data; once they are in place, cyber warfare becomes a contest between people.

In the government and enterprise security market, Zhou said 360 wants to help build infrastructure and help enterprises and government agencies see attacks; blocking attacks and repairing systems is 360’s positioning. 360 will focus on big data and the cybersecurity brain, using big data for security monitoring, and will work with more partners to build a broad security ecosystem, share threat intelligence and knowledge bases, empower more government and enterprise users and push China’s cybersecurity industry forward faster.

Ouyang Meiwen, senior vice president of Venustech, said big data is both an asset and a means of production; big-data security needs data-centred protection and machine intelligence independent of the big-data application itself.

A Shanxi Securities research note says that with the rollout of the Classified Protection of Cybersecurity 2.0 standard, demand for security equipment and services in information systems will increase, driving sales growth for information security vendors. The 2.0 standard moves from passive reporting to active defence and brings cloud computing, big data centres, industrial internet and IoT enterprises into the monitoring system, covering cybersecurity comprehensively and opening up an incremental market, while likely lifting valuations in the sector.