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To: DiViT who wrote (29477)	2/13/1998 7:17:00 PM
From: John Rieman	Respond to of 50808

Who would they find in the Valley that knows how to make DVD-ROM cards? Foreign firms to launch market efforts for VCD players in the Mainland.................................... chinadaily.net Electrical firms strive to stay switched on ALTHOUGH China's domestically-made household electrical appliances gained popularity in 1997, following a wave of mergers, the industry will face tough challenges this year, according to a Guangming Daily article. In 1997, China achieved substantial progress in the reform of its State-owned sector. Through measures to reorganize property, mergers and the reorganization of capital allocation, small-scale State firms engaged in making household electrical appliances are gaining strength and speeding up the process of forming enterprise groups. Many competitive enterprises carrying famous brand names are expanding their size, developing new products or exploring new markets. For example, Changhong Electronics Co Ltd, China's largest colour television manufacturer, has branched out into air conditioners. Refrigerators produced by the Chunlan Group, a major air conditioner giant, lowered the prices of its products by a large margin to seek market share. With the rise of big name producers, people are more likely to purchase products with famous brand names. The household electrical appliance market is largely dominated by these famous brands. A survey indicates that among 10 varieties of selected household electrical appliances, over 70 per cent of the market share was held by domestically-made products, excluding video recorders and tape recorders. The rapid development of the enterprises engaged in household electrical appliances has led to the establishment of a unified market. According to officials from the State Statistics Bureau, regional barriers for domestically-made products have been replaced by a unified market. However, the article indicated that achievements gained by domestically-made household electrical appliance producers do not necessarily mean that they will bask in the sunshine this year. In terms of domestic demand, in China's rural area, household electrical equipment is no longer a rarity, thanks to the stable growth of farmers' incomes. Therefore, the development of new products which can meet farmers' demands may become a new focus of national economic growth if enough efforts are made. In urban areas, the market for household electrical equipment is limited due to people's increased spending on medical care, housing and education. Household electrical appliance producers need to deal with a dwindling market, while they are pressed by overproduction which itself is the result of the expansion of production capacity and foreign investment. In addition, pressure from international brand names in the trade will be intensified. In the colour TV market, market shares of famous brands such as Panasonic, Sony and Samsung are expected to experience a gradual upturn, the article predicts. There is little room left for producers at home to launch a price war. This year will be a challenging one for Chinese VCD manufacturers. Their foreign counterparts have initiated a publicity drive in a bid to promote products. ------------------------------------------------------------------------ Date: 02/07/98 Author: Copyrightc by China Daily