Cyberspace competition is intensifying: security vulnerabilities, data leaks, ransomware and APT attacks multiply under the pandemic, and global energy, healthcare, finance, technology and education sectors face frequent attacks whose impact keeps spreading. Hacker organisations continue attacking critical infrastructure through supply-chain compromise – the security situation remains severe.
National planning gives security prominent placement – strengthening cybersecurity protection, improving laws and standards, building critical information infrastructure protection systems, and cultivating AI, big data, blockchain, cloud and cybersecurity as emerging digital industries. Legislation advanced quickly this year: the Data Security Law, the Personal Information Protection Law and the Critical Information Infrastructure Security Protection Regulations all took effect, and local five-year plans make cybersecurity a priority direction.
MIIT’s draft three-year high-quality development action plan targets an industry above RMB 250 billion by 2023, a compound annual growth rate above 15%, and security investment reaching 10% of IT investment in key industries such as telecom.
Fast growth, hot data security
Per the China Academy of Information and Communications Technology’s analysis, the industry reached RMB 172.9 billion in 2020, up 10.6%, and is expected to reach about RMB 200.3 billion in 2021 – roughly 15.8% growth, returning to high-speed expansion. Data security is the hottest field; financing in data security, security services and industrial control security each exceeds 10% of the total, showing strong capital attention.
A survey by the National Industrial Information Security Development Research Center finds supply capacity steadily rising and segments such as industrial internet security opening up: revenue at 25 listed security firms grew 31% year on year in the first half of 2021. Revenue is regionally concentrated – 25.9% from north China, 25.2% from the south, 22.8% from the east – and nearly 40% of firms now cover the whole country, mostly through direct-sales-led hybrid models. Big data, cloud, IoT and industrial internet are where security firms invest most.
Pain points need joint effort
The industry’s problems: on the supply side, low-level homogeneous competition, weak innovation capacity, scarce high-end products and customised services; on the demand side, needs not fully released, wide variance across industries, and poor linkage between products and services. Capital cooperation is early-stage; over 3,000 security companies exist but most lack overall strength. And talent supply constrains both sides – 89% of firms report difficulty hiring security talent, while job seekers cite unattractive pay and thin supply of highly educated candidates.
The path forward takes all sides: suppliers must accelerate innovation and raise product and service capability; buyers must increase security investment and protect data across its full life cycle; and regulators should support the industry, guide more investment and build mechanisms matching supply with demand. As digitalisation accelerates, security risks will penetrate the real economy further – and industry demand and growth will follow.
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