Research and Markets – China: Tomorrow’s Leader in Electronics?

Dublin (PRWEB) October 21, 2004

The growth of electronics equipment production in China has been widely described as the most fundamental shift in the world electronics industry. Moreover, China is the main beneficiary of the 2001-2002 crisis as its share of the world electronics production grew from 10% in 2000 to 18% in 2003 at an amazing rate of 15.4% per year over the period, ensuring a solid business activity in difficult times for international players. This development is actively supported by the Chinese government, whose objective is to make the national electronics industry an independent and competitive activity, pulling the development of the country.

As growth of the electronics industry in more developed countries is picking up again, the question arises whether China is just a good business opportunity in difficult times, or a growing permanent threat to the established industrial base in Europe, the USA and elsewhere.

In reality the situation is more favourable. China’s strong growth offers long-term market opportunity for electronic OEMs worldwide. Developing production in China, both for the local market and for worldwide sales, affords an opportunity for investors. This should not be seen only as competition for production in other areas than China. Electronics production continues to grow in the other regions of the world, although slower, following the market.

China, a new competency centre for the electronics industry

China is now the first world producer of a large number of mass-market electronic products that were for the most part already made in the Far East (cathode ray tube TVs, computers, optical disc players etc…). China attracts most of the production transfers and new investments, as other smaller countries did some decades ago (Korea, Taiwan, Hong-Kong, Singapore, Malaysia, Indonesia, the Philippines, not to mention Portugal and Ireland…). What makes China specific is its huge and fast growing domestic market.

Equipment manufacturers locate their new production plants in China because this country is pulling the growth of the electronics industry worldwide. This concentration of fresh investment forms technology clusters and competency centres that increase the attractiveness of the area. Other regions with slower growing demand such as Europe or the USA already have a manufacturing base suited to the size of their local market. Production follows the market and Chinese products are more competitive because the new facilities in China are more productive.

The digitalisation of electronics greatly favoured the development of the Chinese electronics industry. Assembling digital blocks using the same basic digital technologies is much easier than assembling complex analogue circuits and systems. The convergence of electronic applications, technologies and products favours the development of wide range portfolios by the Chinese conglomerates.

While sourcing critical components abroad (Japan, Taiwan, but also Europe and the USA), China developed its manufacturing output through partnerships with international players and outsourcing services, mainly based on assembly work. Benefiting from technology transfers, the Chinese electronics industry is now moving towards independence and self-sufficiency by developing home-grown standards of future mass-market digital products (digital TV, high definition DVD, 3G mobile communications). The country already provides more engineers than the USA every year and R&D facilities are being built in China near production and technology clusters. As production followed the market, R&D has already started to follow production. Electronic component manufacturing is also developing fast to provide a comprehensive supply chain and support the growth of local production.


2 – China: a massive consumer market and an emerging leading world power

3 – China supplies the world

4 – China is developing a powerful professional electronics industry

5 – China already has a significant component industry

6 – The main Chinese companies in the electronics industry

For more information visit

Laura Wood

Senior Manager

Research and Markets

[email protected]

Fax: +353 1 4100 980


About The Author

Ibrar Ayyub

Ibrar Ayyub is an experienced technical writer with a Master's degree in computer science from BZU Multan University. He has written for various industries, mainly home automation, and engineering. He has a clear and simple writing style and is skilled in using infographics and diagrams. He is a great researcher and is able to present information in a well-organized and logical manner.

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