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Reply To: None Saturday, 4 Nov 2000 at 8:44 AM EST
Post # of 70550
China bans mobile makers
Source: South China Morning Post
Publication date: 2000-11-04
(rn - morning all. glad to see everyone made it through this wild week. sorry if this has been posted b4 - I won't bother to try and catch up on all the posts)
China has banned new foreign investment in the mobile telephone production sector in an effort to protect domestic producers.
Quotas have also been set on domestic content and export levels for foreign companies which are already operating.
The Workers Daily yesterday quoted Wang Jianzhang, deputy chief of the General Planning Bureau of the Ministry of Information Industry, as saying the government was taking many steps to support the 10 firms it had chosen as domestic manufacturers of mobile phones.
According to official figures, mobile sales in China this year will reach 28 million. In the first six months, domestic brands accounted for 10 per cent of these sales and the target for the whole year is 15 per cent. Mr Wang told a meeting of domestic makers that, from this year, Beijing would not permit new foreign investment in the mobile makers, either as joint ventures or wholly owned foreign companies.
He also said existing foreign joint ventures must export at least 60 per cent of output and by the end of next year must reach a local content rate, by value, of at least 50 per cent.
Mr Wang said the access of these foreign joint ventures to the domestic market would be determined by their level of exports and localisation of components.
Ma Xiuhong, an assistant vice-minister at the Ministry of Foreign Trade and Economic Co-operation, told the same meeting that while China was in the process of implementing a market economy it was still practising a "planned economy" in the mobile phone sector.
Other measures to aid domestic manufacturers are billions of yuan to help them in research and development - 400 million yuan (about HK$378.72 million) from treasury bond issues and 1.4 billion yuan from the fees users of mobiles pay to connect to the network, and 5 per cent of the connection fee from users of fixed-line telephones.
The newspaper said the 10 domestic makers were battling to gain market share against the dominant foreign brands, especially Nokia, Ericsson and Motorola, which had cut prices as part of their strategy to combat competition.
Another headache was a shortage of the imported core chips needed for the telephones, made worse by a sino-Korean trade war earlier this year when Beijing slapped punitive tariffs on imports of South Korean chips.
One of the worst hit firms is Xia Hua Electronics of Xiamen, which last year placed orders for 100,000 chips a month but is receiving less than half. Meanwhile the TCL group of Guangdong has invested US$4 million in a production line to turn out 2.5 million mobiles a year due to start this month, but it has not been able to work because of a chip shortage.
(Copyright 2000)
Publication date: 2000-11-04 |
