A strong cybersecurity industry underpins everything else. The China Academy of Information and Communications Technology’s white paper puts the 2020 market at RMB 172.9 billion, up 10.6%, and estimates roughly RMB 200.3 billion for 2021, up 15.8% — a field growing fast on the back of more than 200 laws and regulations covering classified protection, critical infrastructure, data security and personal information.
Where the money goes
New infrastructure drives demand, with big data, cloud, IoT and industrial internet drawing the most participants; dynamic perimeters, intelligent analysis, proactive defence and cloud-delivered security are the directions the market rates highest. Among 20 listed firms, average 2020 revenue was RMB 1.53 billion, up 13.77% — well down from 30.14% in 2019 — while average net profit of RMB 185 million grew 15.28%. Profitability beats international peers; R&D spending is rising but R&D intensity still lags.
Capital is active: 77 financing rounds in 2020 for about RMB 7.82 billion, concentrated in early and middle stages and in data security, security services and industrial control. What is missing is M&A — foreign markets consolidate through acquisition, and this market, crowded with small firms across niches, needs consolidation and exit routes to cut internal attrition and build scale.
The honest gaps
Growth is fast but quality lags: few premium products, security services behind the curve, loose coupling with key industries. Head firms trail international leaders on revenue, R&D and technology, with little international business; the long tail is numerous but weak. Talent, capital and a mature demand environment are all in short supply.
The white paper’s recommendations follow from the gaps: complete the top-level rules and enforce them, including cross-border listing reviews; push specialised security for 5G, connected vehicles, IoT and industrial internet, and raise the level of zero-trust, trusted computing and mimic-defence technologies; build a multi-tier talent pipeline; and concentrate the industry in parks and clusters where the ecosystem compounds.
Republished for information. The original text has not been independently verified and does not necessarily reflect our views.
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