Electronics production in China up 20.9% during 1997.............
Note the cutthroat VCD competition.
<<In Guangdong Province alone, there are 263 VCD producers, with capacity far exceeding the local market demand, they said, adding the situation is almost the same nationwide.>>
chinadaily.net
Electronics post rise in output, profits
CHINA'S electronics industry scored a 20.9 per cent increase in production during the first six
months of this year, with its value-added output hitting a record 26.6 billion yuan ($3.2 billion),
a senior electronics official told China Daily yesterday.
Industry profits also racked up a parallel development, totalling 4.45 billion yuan ($536.1
million) during January-June, up 21.9 per cent on a year-on-year basis, Vice-Minister of
Electronics Industry Liu Jianfeng said.
Liu noted strong market demand has sparked electronics factories to gear up production.
But, the official warned, duplication of the same electronic projects has also become rampant
nationwide, especially in TV and video compact disc (VCD) manufacturing.
Official statistics indicate as early as 1995 China was equipped with capacity to produce more
than 44.6 million colour TVs, but it only produced 20.58 million because of market demand. In
addition, another 14 colour television projects were set up nationwide in 1995, with total
capacity of 5 million sets.
Wang Zhongchen, deputy director-general of the ministry's General Office, said in the coming
months the ministry will use administrative means to rein in the development of new projects in
an attempt to avoid "blind expansion" of the electronics industry.
In the coming months, Wang said, the ministry plans to strengthen its manufacturing technology
appraisal for new projects. It also will strictly control issuing production licences to factories
which apply for electronics production.
He urged factories to seek survival through branching into international markets. "They (the
factories) should immediately stop competing with each other domestically by way of slashing
their retail prices, because such a practice simply is equal to 'committing suicide,'" he added.
The State-owned maker of Peony TV, the largest such factory in Beijing, is already suffering
operational losses because its products were gradually squeezed out of the Chinese market
along with the current simmering pricing war launched by Chinese TV producers, observers
say.
In Guangdong Province alone, there are 263 VCD producers, with capacity far exceeding the
local market demand, they said, adding the situation is almost the same nationwide.
"We are going to let the market judge who will be the winner in such a competition, and
encourage those factories which persistently run in the red to go bankrupt," Wang noted.
During the first six months of this year, China produce 650,000 micro computers, up 27.5 per
cent from the same period a year ago.
It also manufactured 10.44 million colour TV sets and 7.21 million lines of computer-controlled
telephone exchanges, an increase of 12 per cent and 29.8 per cent, respectively, over the
corresponding period in 1996.
The vice-minister said Chinese electronics companies have made considerable progress in
gaining the market share in China.
TV makers of Changhong, Konka, Panda, Hisense and TCL already have 65 per cent of the
market share; Chinese VCD makers dominate with 81 per cent, and 60 per cent of micro
computers sold during the first six months of this year were made by Chinese companies, he
added.
Date: 07/21/97
Author: Wu Yunhe- |
