Businesses in China will triple their spending over the next four years on hardware that saves money by routing phone calls over the internet, a new report forecasts.

China's annual corporate spending on IP private branch exchange (IP PBX) hardware will rise from $164.1m this year to $479.5m in 2010, according to analysts at research firm In-Stat. 

A PBX is a computer system that acts like a switchboard to connect incoming and outgoing phone calls with dialled numbers, and to route internal calls.

A modern VoIP PBX will automatically route calls via the internet whenever possible to cut costs. The systems also provide voicemail boxes, call forwarding and many other common telephony functions.

"Business users in China are seeing VoIP as a basic function in IP PBX products," said Kevin Li, a China-based research analyst with In-Stat.

Rapid new business growth in China is expected to be a key driver as the global market for business VoIP hardware and software reaches forecast sales of $5.5bn in 2007, Juniper Research predicted earlier this year. 

The global IP PBX market will represent slightly more than a quarter of that figure, at $1.6bn in 2007, with China being one of the largest single markets.