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Strategies & Market Trends : China Warehouse- More Than Crockery -- Ignore unavailable to you. Want to Upgrade?

To: RealMuLan who wrote (3330)	7/7/2004 1:22:29 PM
From: RealMuLan	Read Replies (1) \| Respond to of 6370

PC industry losing competitive edge over China Korea's personal computer industry is quickly losing its competitive edge to their Chinese counterparts, the country's leading business lobby said yesterday. According to a report by the Federation of Korean Industries, the Chinese personal computer industry has a cost advantage over Korean manufacturers and is rapidly closing the technical and quality gaps. "In our comparative survey of a Korean company, mentioned here as 'A' that manufactures similar products in both Korea and China, the Chinese factory had a 10 percent advantage in overall competitiveness in the production of PC main bodies," said the report. The report estimates the overall competitive gap to widen to 20 percent over the next five years, with the Chinese industry quickly catching up in technology and other non-cost factors. The surveyed Chinese factory held a considerable advantage in labor cost, government investment and tax benefits. The factory's spending on wages and administrative costs were 20 and 25 percent of its Korean counterpart, respectively, resulting in a total production cost that was nearly three times lower. Chinese-made products destined for export were sold at a price 20 percent lower than the locally made models also for export. The corporate tax rate for Chinese computer makers is 7.5 percent, compared to Korean companies that pay 27 percent. "Government regulations and the turbulent labor-management relations seem to have taken a toll on the competitiveness of Korean companies," said the report. "Korean companies must look to move their factories to China for the production of desktop PCs, while avoiding head-to-head competition with Chinese companies and building mutually productive partnerships." Personal computers remain Korea's top export item to China, along with mobile telecom equipment and steel plates, according to figures released yesterday by the Ministry of Commerce, Industry and Energy. Korea's personal computer exports to China were $2.33 billion from January through May this year, a 113 percent jump from last year's numbers. Mobile telecom equipment exports were $1.37 billion, while steel plate shipments amounted to $1.18 billion. The country's total exports to China rose 57.2 percent from last year to $19.43 billion during the January-May period. (thkim@heraldm.com) By Kim Tong-hyung koreaherald.co.kr