China's Computer Imports Fall as Market
Growth Slows (Repeat)
Bloomberg News
March 10, 1999, 1:53 a.m. PT
China's Computer Imports Fall as Market Growth Slows (Repeat)
(Recasts)
Beijing, March 10 (Bloomberg) -- China's computer imports
fell for the first time last year, hampered by flagging economic
growth and efforts to trim the bureaucracy, official media said.
Analysts said the fall in imports, down 39.2 percent to
$2.69 billion last year, also reflected the growing market share
of domestic computer companies, which enjoy lower costs and
better distribution networks.
That means tougher competition for foreign computer makers
like International Business Machines Corp. and Dell Computer
Corp., which are spending billions of dollars to boost their
presence in China, still one of the fastest-growing markets for
information technology. Eckhard Pfeiffer, president and chief
executive of Compaq Computer Corp., is visiting Beijing this week
to raise his company's profile.
Executives from foreign computer companies are being lured
to China by rising unit sales at a time when at least eight Asian
neighbors, including South Korea, Thailand and the Philippines,
saw sales shrink in 1998.
The Chinese market's growth slowed dramatically in 1998,
though. The China Daily newspaper, citing the Ministry of
Information Industry's Center for Computer & Microelectronics
Industry Development, said computer sales grew by 13.9 percent to
148 billion yuan ($17.8 billion) last year, down from 41.3
percent growth in 1997.
Liu Chunlu, the center's vice director, said sales of
computers to government departments were disrupted by a massive
campaign to cut waste at public agencies, the paper said.
The paper also blamed the ''gloomy domestic situation'' for
the slowdown, a reference to China's reported 7.8 percent
economic growth rate last year, its weakest performance since
1990.
Sales of personal computers in China rose 14 percent to $4.9
billion in 1998, a sharp slowdown from the 32 percent sales
growth in 1997, said Kitty Fok, Hong Kong-based research manager
for International Data Corp., a computer industry research
company.
Despite last year's slower growth, China's PC sales rose
29.5 percent in 1998 to 3.929 million units, the second-fastest
growth in Asia after India, according to IDC.
IDC's Fok said sales growth of personal computers should
slow again this year, to about 25 percent. A government crackdown
on smuggling should limit the fall in unit prices, resulting in
PC sales revenue rising about 22 percent this year.
Local Makers
Slower growth in overall sales isn't the only challenge
facing foreign computer makers. Foreign-branded computers,
including both imports and local production, took a smaller share
of the Chinese market last year, representing 39 percent of sales
compared to 48 percent in 1997, Fok said.
''Local players have become much more aggressive in the
market than foreign rivals,'' she said. ''I expect growth to slow
more for foreign companies than domestic ones.''
Local companies' technology has improved dramatically, she
said, adding ''They have the back-up from the government, wider
sales channels and lower costs.''
--Peter Hannam in the Beijing bureau (8610) 6532-4492 through the |
