HP Wants Bigger Share of Booming PC Market in China

Hewlett Packard wants to boost its share of the Chinese computer market, and intends to invest $50-60 million over the next year to do so. Describing the market for PCs as "very hot", HP's president for China operations hopes that HP's sales will grow 50% next year. Sales are currently growing at about 40%, and HP claims it was the top PC seller in China for the second and third quarters of this year. Chinese buyers bought 1.4 million computers this year and 1.1 million last year. A Chinese industry analyst expects overall growth of the Chinese computer market to be 30-40% per year for the next four or five years.

China Daily (PRC), 12/12/96


PC Sales Expected to Keep Rising

According to the Ministry of Electronics, sales of PCs in China will grow by 60% in 1997, following 40% growth this year. The number of PCs sold will rise from 1.6 million this year to between 2.4 and 2.7 million in 1997, with a turnover of almost $5 billion. Currently, home computers account for about 20% of the market, but sales of computers for home use are expected to grow 50% next year to 400,000 units. Some wealthy coastal cities already have 5 computers per hundred families. The demand will be driven by the introduction of computer courses into school curricula, the need for home computers as business tools, and the use of computers as studying and teaching aids.

China News Service (PRC), 12/14/96


Computer Sales Predicted to Grow by 60 Percent in 1997

The People's Posts and Telecommunications News reported that China will market 2.4 to 2.7 million computers in 1997, with sales expected to reach $4.8 billion. This is a 60 percent rise over 1996 which increased 40 percent over 1995. The private demand for computers is estimated to rise 15 percent over 1996 as more and more homes are expected to purchase a new computer.

Xinhua News Agency (PRC), 12/25/96


Microsoft Expects Big Growth in China

A senior executive at Microsoft (China) said that China's burgeoning personal computer sales and maturing financial sector will probably make the country's software market one of the world's largest by 2000. Bryan Nelson, director of the company's Greater China region said that although China's market is now the fifth biggest in the world "two years from now, they'll be No.3." He believes that China's PC demand will greatly assist the software industry's development. The Ministry of Electronics Industry expects China's PC demand will increase at least 60 percent to over 2 million computers this year. Microsoft is heavily investing in designing Chinese products and training the staff to sell to the local market. Chinese employees are now receiving a management-training program which is a first for the company outside the U.S. However, Microsoft has not yet made a profit in China and does not know when this will happen. One reason is that its Chinese version of Windows 95 have generally been copied and sold illegally, particularly in southern China.

The Asian Wall Street Journal (U.S.), 01/08/97


Chinese PC Maker Sold 200,000 Computers in 1996

Due to intensive management and expansion of production sale, China's Great Wall Computer Company sold 200,000 units of micro-computers in 1996, which was twice the number of 1995. Sources say that the company is not only manufacturing PCS but providing supporting products to many other domestic PC manufacturers, making it the center of China's computer industry. Since the company joined up with IBM sales have soared. Prior to cooperation, Great wall's output was only 25,000 units, only one percent of the market. After establishing the JV, the company has taken about 10 percent of china's market share.

Xinhua News Agency (PRC), 01/09/97


Students in Beijing Make Bill Gates a Best Selling Author

Due to the country's growing number of computer enthusiasts, Bill Gates, the co-founder of Microsoft Corporation has recently become a best selling author in China. "The Road Ahead," Gate's book, has already sold more than 400,000 legal copies and even more pirated copies, which has made it one of Beijing's most popular books. "We hope to learn from Bill Gates and perhaps emulate him," said a high school student in Zhongguancun, Beijing's computer district. According to a recent survey, 23 percent of secondary school students in Beijing have read his book. Although this may sound like a massive computer market, other surveys still show that only 1.6 percent of Chinese families own a computer and only 4.1 percent intend to purchase one.

The Asian Wall Street Journal (U.S.), 01/21/97


PCs Are Becoming a Household Essential in China

Yang Tianxing, director at the Computer Department of the Ministry of Electronic Industry, said that one out of ten of China's urban families have purchased a personal computer. This means that they have begun to put PCs on their list of household essentials. Yang said that computers now come after color TVS, refrigerators and washing machines as a necessary appliance. Multimedia technologies have made computers popular among ordinary Chinese. He suggested that the potential PC market is as huge a the annual market for color TVS, currently 20 million units a year. PC sales are expected to reach between 2.4 to 2.7 million units in 1997, with sales of $4.8 billion. Chinese products are claiming a larger market share due to their cheaper price and more convenient after sales service.

CBNet (PRC), 01/23/97


China Sold 1.8 Million PCS Last Year

At the end of the 1997 Electronic Industry Work Meeting it was reported that China sold 1.8 million personal computers in 1996, a 30 percent rise over 1995. Chinese products took a 40 percent share of this market.

PCWeek (PRC), 01/27/97


New Policies to Boost Foreign Computer Companies

A leading foreign computer vendor said that they expect the Electronics Industry Ministry in China is to introduce new policies that would help boost the growth of foreign computer firms this year. "The ministry has sent a message to foreign companies that those who have made investments in China would be able to have returns on investment in 1997," AST Asia Pacific general manager of North Asia, Daniel Wong Chukee, said. He did not know the details of the plan yet but "It may be a policy that encourages the use of computers or the further liberalization of the sector such as a slash in tariffs on computer-related imports." Domestic firms were able to cut prices by as much as 30 to 40 percent this year, putting foreign firms at a disadvantage. It is possible that the China-led price cut may preclude moves by authorities towards increased liberalization of the sector so domestic firms could secure a solid market before leveling the playing field, Wong said. China may become one of the top three markets in the world by 2000 with a six million computer a year demand.

South China Morning Post (Hong Kong), 01/29/97


Domestic Computer Manufacturers to Produce 4-5 Million Units Annually

According to a recent national working conference for the electronics industry, the production of microcomputers in China will be four to five million units per year until the year 2000. Experts predict that home-made computers will take 60 percent of the domestic market share. The Ministry of Electronics Industry forecasts that the sales value of PCs on the domestic market will reach between $4.8 billion and $6 billion by the end of the century. Priority has been given to the production of multi-media computers, notebook computers, computers for family use including peripheral equipment, and high grade microcomputers.

China Economic Information (PRC), 02/03/97


PCs in 10 Percent of Urban Homes

Among the list of essentials for Chinese families is now a personal computer. After refrigerators, washing machines and TVS, computers have now been demonstrated as a necessary appliance for Chinese homes. One in 10 of China's urban families now own a PC, said Yuan Tianxing, director at the Computer Department of the Ministry of Electronics Ministry. Around 40 percent of all computers sold last year went to Chinese families. The potential market for PCs is huge, he said. Last year there was a 56 percent sales rise over the previous year. Sales are expected to reach 2.7 million units in 1997, a sales value of $4.8 billion. Chinese products have an increasingly bigger market share as domestically manufactured computers are cheaper and have better after-sales service.

China Daily (PRC), 02/12/97


Tight Race for PC Sales in China

Although it is barely in the lead, IBM overthrew Compaq Computer to be the best selling personal computer brand in China for 1996. IBM accounted for seven percent of the 2.1 million desktop computers, notebook computers and PC servers that were sold in China last year. This was more than any brand according to International Data Corp. IBM's lead in China fulfills a forecast by Peter Shen, general manager of the company's PC unit in China. It's razor thin lead may be short lived however as prices are falling, and there is a great deal of pressure to cut them even more. Legend presents IBM with the greatest challenge which actually had a greater market share in the last three months of 1996 than IBM. Competition also comes from locally made clone computers which can be made from parts cheaply.

The Asian Wall Street Journal (U.S.), 02/12/97


Children Kindle Computer Sale Boom in China

Due to China's one child policy, many Chinese parents have indulged their children. This has sparked a boom in the sales of personal computers to educate and amuse their children. Parents are purchasing computers with the sense that in the future their children will have to know them to succeed, said Qiu Debin, sales manager for Legend Computers, China's largest and most successful PC manufacturer. "People believe there are two must-have skills in the job market -- foreign languages and computers," Qiu said. Parents are thinking about the future. Shanghai has relatively high incomes and is leading China's computer revolution, but most retailers also expect it to spread quickly to other parts of the country.

Reuters (U.K.), 02/11/97


Nine Hot Spots in China's Computer Market

China's computer market expects to see a boom in 1997 emerging from nine areas. (1) China's ‘golden' projects will bring about a large demand for computer hardware and software in three network systems, including the ‘golden customs' system, a nationwide customs administration system, the ‘golden bridge' system, an information network and the ‘golden' card' system, a nationwide banking system which links Chinese banks. (2) Computer aided management to be used in the construction of large projects including air traffic control, transportation and project management. (3) City governments such as Beijing and Shanghai will build regional Internet projects, promoting the development of computer hardware and communications. (4) The development of the Intelligence Card attracting computer manufacturers for large scale IC production bases. (5) China's financial sector will provide many opportunities for the computer industry. (6) PCs purchased for home use have recently taken 21.9 percent of total PC sales. More Chinese are hoping to own a computer and connect to the Internet. Home PC and networks are expected to do even better this year. (7) Computer control technology will be used in the development of domestic commercial systems. (8) Intelligent control office buildings will be constructed with budgets for computer equipment estimated at $2.5 million a building. (9) China will apply computer technologies to reconstruct its industrial sector.

China Business and Investment Update (PRC), 02/01/97


Slashed Prices Attract Computer Shoppers

According to the Ministry of Electronics, Chinese consumers are beginning to become more savvy in computer purchases. An official survey has shown that of all PC purchases made last year, those priced between $964 and $1807 were in the greatest demand, according to retailers. Retailers and manufacturers drew in the masses with their price cuts. Store owners believe the trend will continue in 1997. Now the most popular computer in the Chinese market has a 2 gigabyte hard disk, a 133-megahertz Pentium and 16 to 32 megabytes of RAM. These computers generally retail for about $1,200 in China. The output of Chinese-made computers in 1996 exceeded 1 million units last year, an increase of 138.6 percent, the Ministry of Electronics estimated. Sales of domestically-made computers were up 216.7 percent at 950,00 sets, or 1.8 million sets if foreign PCs were included.

China Daily Business Weekly (PRC), 02/23/97


Intel Aiming for China Market

Vice President of Intel, Sean Maloney, said that China's PC consumers are thirsting for new technology to the degree that China may possibly be the world's second largest market after the U.S. in five years time. The Pentium processor was quickly snatched up by the Chinese last year to catch up with the technology in the U.S. He said that the computer sales were rising faster in China than in many developed markets. "I would say that (China) will catch up with Japan as a market in the next three to four years. Within the next five years it could be the world's second largest market," Maloney said.

Reuters (U.K.), 02/25/97


Decrease in Market Share for Foreign Computer Producers

Imports of computer equipment is on the decrease in China, according to the Beijing Administration of Customs. The total import volume in 1996 of foreign computers and related equipment decreased 48,000 units worth $490 million, 45.5 percent and 11.7 percent lower than the previous year. A major factor in the decrease of imports was the development of domestic products. As domestic products improve in price and quality, market shares increased 3-4 percent in the first half of the year.

China Business and Investment Update (PRC), 03/01/97


Increased Demand for Computers in China

China projects that in 1997 the demand for microcomputers will be 2.25 million units, an increase of 40 percent over 1996. About 500,000 units will be for personal household computers. Domestic computer producers are taking an increased portion of the China market as they build a reputation for quality and after-sales service. Of the 2.25 million microcomputers to be sold, 32 percent of the market will be taken by domestic brands and 40 percent by imported brands. Non-name brand "clone" computers have accounted for 30-35 percent of the domestic market over the past couple of years because of their lower prices. However, because of recent price cuts by major manufacturers as well as strengthened government licensing control, clone computers share of the market may decrease to 28 percent in 1997. The demand for UNIX servers will be around 20,000 units over 1996, with foreign manufacturers taking 90 percent of the market. Networks will also be an important sales item in 1997 with routers and card systems dominated by foreign products.

China Economic News (PRC), 03/03/97


Local Computer Maker Takes Lead

According to the State Statistical Bureau, Legend Computer, a domestic computer brand, ranked first in China home sales in 1996 with sales of 200,000 units. This is the first time that a domestically manufactured computer has sold the highest number of units in China's increasingly competitive market that was once dominated by foreign brands. The computer has become the third electronic product with such an important role in the country's domestic market after TVs and refrigerators.

China Daily (PRC), 03/10/97


An Increasing Demand for Printers in China

As the number of personal computer users goes up, the demand for printers is also increasing rapidly. In 1997, the demand for printers is expected to reach 1.53 million and will grow 25 percent annually for the next few years, analysts said. According to Gong Binliang, an expert with a research institute under the Ministry of Electronics Industry, demand for printers is rising alongside computers with about 78 printers for every 100 computers. To satisfy consumer demand this year, China will need around 1 million matrix printers, 168,000 ink jet printers, 15,000 billing printers and 14,000 laser printers. Market research reveals that the demand for ink jet printers has been growing about 90 percent while billing printers have been growing 115 percent annually. Growth figures for laser printers were unavailable. About 70 percent of the sales volume comes from Beijing, Shanghai and Guangzhou. Gong said that domestic manufacturers are having a difficult time withstanding foreign competition as foreign companies are spending large amounts of money on promotional campaigns.

China Daily Business Weekly (PRC), 03/16/97


Ten Million PCs by 2000

Zhou Muchang, head of the Ministry of Electronics Industry's Computer and Microelectronics Research Center predicts that personal computer sales may reach 8 to 10 million units by 2000. He said the industry underwent substantial changes last year which could make China the world's second largest PC market after Japan. "Now fifth worldwide, China's share of the global market increased from 0.5 percent some years ago to 2 percent last year," Zhou said.

China Daily (PRC), 03/15/97


Boom in Computer Related Trade

Although China's overall foreign trade was slow in 1996, the import and export of computer products reached new heights. Computer-related trade was valued at $9.9 billion, an increase of 28.4 percent over 1995, reported the Center for Computer and Micro-electronics Industry Development Research. The report said that exports of computer-related products had a value of nearly $6.5 billion, a 30.4 percent rise over the previous year, while imports were valued at over $3.4 billion, a 24.7 percent gain. Joint ventures accounted for 36 percent of China's total trade, solely foreign-invested companies for 34 percent and state enterprises 24 percent. About 26 percent of China's exports went to the United States, according to the report. Of the country's computer-related imports, about 70 percent was in the form of components, 11 percent peripheral, 10.4 percent completed machines and 5.4 percent application software. Only a small number of microcomputers were imported. Most big foreign companies had expanded their production facilities to factories within China.

China Daily (PRC), 03/24/97


Domestic Computer Manufacturers Take on the U.S.

When shopping for computers, Chinese customers have often ended up purchasing cheap and powerful U.S. brand computers that were smuggled in by shady distributors. However, things are changing rapidly. When Intel introduced its MMX multimedia chip in late March eight local producers displayed domestic MMX-based PCs. The Chinese domestic PCs are "very advanced systems and very competitive with brands," says James A. Jarrett, head of Intel's China operations. Although China had been outclassed for years, it is now beginning to close the gap with Compaq, IBM and AST. The local companies are also making big inroads in distribution and service. Sales of PCs are expected to grow from $2.1 billion last year to $8.7 billion in 2000. As China will have to open the door to imports if it wants to enter the WTO it stands a very good chance of competing in this sector with the best overseas companies.

Business Week (U.S.), 04/05/97


Computer Sales Netted $11 Billion in 1996

China's Computer and accessories sales for 1996 netted $11 billion, an jump of 49.6 percent over 1995. Computer hardware sales returned $8.6 billion, an increase of 50 percent over 1995; software sales were $1.1 billion, a 35 percent increase; and income from information services was $1.36 billion, a rise of 47 percent. Customs statistics reveal that computer trade reached $9.6 billion in 1996, a 29 percent rise over 1995, or 6.3 billion in exports and $3.3 billion in imports. The growth of notebook computers even surpassed the growth of desktop sales.

China Economic Information (PRC), 04/09/97

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