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China Electronics Industry and High Tech Market 2004
China Market Research, Jan 2005, Pages: 292
After a decade of moving factories to China, many of the world’s big high-tech firms are forging a new style of partnership with Chinese manufacturers that show the country’s growing engineering prowess — and its competitive threat.
In a delicate dance with potentially formidable enemies, firms like Siemens AG, Thomson and Alcatel are establishing global joint ventures with China’s rising producers of TVs, mobile handsets and home appliances.
Many expect it will be well worth the risk of bringing company secrets to the table in return for access to China’s low-cost researchers and its fast-growing consumer market.
“Almost no company can avoid the opportunity to take advantage of China’s talent base,” Tom Manning, director at business consultancy Bain & Company, said.
“Two-thirds (of multinationals) are doing R&D here. The majority is still in non-threatening R&D, but it is quickly moving up the food chain.”
Germany’s Siemens, Europe’s biggest electronics group, has teamed up with handset maker Ningbo Bird Co. Ltd. and is moving half of its mobile phone research to China. It also co-developed China’s homegrown high-speed mobile phone standard, called TD-SCDMA.
In equally far-reaching agreements, Netherlands-based Philips Electronics is developing hospital equipment with China’s Neusoft, while Finland’s Nokia Oyj and U.S.-based Motorola Inc. have developed unique handsets in China that use the freely distributed Linux operating system or let users enter text messages with a stylus.
China’s low costs, a vast and growing supply of engineers and a market of 1.3 billion consumers have convinced many multinationals that they need more hooks into the country.
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