China tid bits......................
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Wiring China
Huge market still poses obstacles
By Thom Calandra, CBS MarketWatch
Tue Nov 18 14:29:59 1997 ÿAlso on CBS MarketWatch<Picture: *>Industry indexes
LAS VEGAS (CBS.MW) -- The wiring of China is happening even faster than analysts originally forecasted.
As many as one in four homes in the fast-growing cities of Guangzhou and Shenzen in southern China owns a personal computer, analysts and executives told an international audience at the Comdex technology trade show in Las Vegas.
In Shanghai, 60 percent of all homes have phones, said Leenong Li, president of California company PC21 Inc., which hosts a Web site that promotes U.S. companies and products in China. "This is a huge change from just five years ago," said Leenong, whose company's Web site can be seen at pc21.szptt.net.cn.
China is the world's fastest growing major computer market, with personal computer sales expected to grow as much as 30 percent a year through the year 2000, said Bryan Larson, a trade specialist with the U.S. Department of Commerce. The Department of Commerce figures the computer market will generate $24 billion of yearly sales by the year 2000.
And Chinese buyers of PCs are not, as many Westerners think, in the stone age. Almost half of the PCs being sold in China these days sport multimedia systems, the U.S. Information Technology Office in Beijing says. Pentium-powered PCs represented three-quarters of all units sold in China in 1996, Larson said.
Still, businesses and investors can expect major challenges in their efforts to sell technology products and services in China. "This is a huge and mysterious market," said Leenong, whose words seem just as appropriate when applied to the 10,000 new products at this week's Comdex show.
Most China businesses use the vast size of the market as leverage to negotiate better terms for themselves, he said. What's more, protection of intellectual property rights, while improving, is incomplete in many areas. "To keep up with the latest changes, it requires effort," Leenong said.
In the world of the Web, U.S. businesses face several barriers. Most Chinese Web users suffer from slow access speeds, language barriers and expensive Internet surcharges. China also imposes regulations on overseas-generated Web sites, Leenong said.
IDG, the consulting group, estimates only 8 in 100,000 China citizens have access to the Web. To Internet-ready companies, that means plenty of room for growth. The 50 largest U.S. information technology companies have sales or marketing offices in China.
Leenong offered several broad suggestions to those looking to join the China fray. Be flexible. "Keep your options open," he said. "It's very difficult to turn around a bad deal."
Making a personal commitment to your partnerships may also help. "In China, a lot rests on the individual. The individual makes it happen," Leenong said.
Of most interest to technology enthusiasts was a list of Web sites that offer research and other tips about China markets. They include idgchina.com, china-goldlink.com and welcome-to-china.com <Picture: [CBS MarketWatch]>
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Thom Calandra is Editor-in-chief of CBS MarketWatch. |
