15-Oct-04
China electronics industry projected to grow to US$459 billion by 2010.

Hong Kong, October 15th, 2004 – Fusion Consulting releases findings from an in-house industry briefing study, which projects output from China’s electronics industry to reach US$459 billion by 2010. This represents a year on year growth of 14% from an estimated output of US$210 billion by the end of 2004, verses an average annual growth rate between 5% and 10% for the Asian electronics industry as a whole.

As another comparison, China’s electronics industry size is currently more than three times that of the whole of Southeast Asia’s, and is projected to expand to become five times as large by 2010.

This growth will be fuelled by demand for digital televisions in the domestic Chinese as well as European and American markets, in addition to telecommunications products, and specifically 3G products. This is helped by China’s liberalising trade policies and the reduction of administrative barriers.

China is currently favoured as a low cost manufacturing base for the world’s leading manufacturers. The study however, went further to identify three key production trends which could put a dampener on the industry’s otherwise phenomenal growth.

1. Reliability – Reliability will increasingly be a key issue for production, as miniaturization drives up default rates and production costs.

2. Product design – Design will increase in importance as makeovers of existing products gradually outweigh new product introductions. China has yet to groom outstanding product design talent.

3. Costs – Once initial location-based cost savings have been realized, R&D will be needed before further cost-advantages can be gained.

“We foresee the reliance on electronic exports from China decreasing over time from the current 25% of total output, as the domestic market for consumer electronics, telecommunications, computing and more advanced automotive products continues to pick up,” said Mr. David Yew, head of the Information and Communications Technology practice at Fusion Consulting. “The 3G revolution and the 2008 Olympics in Beijing will really give this sector a boost. Expect to see city-dwelling mainlanders watching their home-grown Olympic stars clean up the gold medals on Chinese-made 3G handsets. And if they can’t afford a 3G handset they will be clustering round plasma screens and public display systems designed and built by Chinese engineers.”

About Fusion Consulting
Fusion Consulting is a business intelligence consultancy providing clear strategic advice on Asia-Pacific markets. With offices in Singapore, Shanghai and Hong Kong and a network of 400 industry-specialist consultants in 16 countries, the company conducts custom research and consulting to help companies understand their markets, compete more effectively and grow into new areas of opportunity.

For more information, please contact Fusion Consulting at

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