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(File photo)

BEIJING, Sept. 6 (Xinhua) -- China's IT and Internet industry continued to prosper in 2016 thanks to a better business environment and technological innovation, according to a report of the Ministry of Industry and Information Technology (MIIT).

Total revenues of major IT and Internet companies reached 17 trillion yuan (about 2.6 trillion U.S. dollars), 1.55 times that of the 2012, the latest official data showed.

This represents 11.6 percent annual growth from 2012 to 2016, with the electronics manufacturing and software sectors leading growth by expanding 9.5 percent and 18.1 percent respectively.

Profit growth at major electronic IT and Internet companies gathered pace in 2016 on increasing investment and lower tax rates.

Last year such firms reported total profits of 1.3 trillion yuan, nearly double that in 2012, with a 17.3 percent annual growth.

The report said that last year the electronics manufacturing sector continued to support the country's industrial growth with its value-added output expanding 10 percent year on year.

The number of IT and Internet companies with annual revenues of more than four billion yuan exceeded 200 and nearly a thousand companies made cross-border operations last year.

Investment in the electronics manufacturing sector rose 1.6 percent year on year. The growth was 14.7 percentage points higher than that of 2015, according to the report.

The industry's rapid development was boosted by Internet-based innovations including virtual reality, smart television and drones.

IT is playing a bigger role in consumption, which will boost combined output of related industries to 15 trillion yuan in 2020, according to an industry guideline released recently by the State Council.

China will bolster online information consumption in the next few years to stimulate domestic demand and shore up economic growth.

By the end of 2020, the consumption of online information products and services is expected to grow at least 11 percent per year to reach 6 trillion yuan, according to the guideline.

Online information consumption stood at 3.9 trillion yuan last year, contributing 0.26 percentage points to the country's 6.7 percent year-on-year GDP growth.

The government has said it will create a sound business environment by adopting inclusive and prudent regulation, cutting red tape, and improving the protection of personal information and intellectual property.