Electronic information industry in China
Encyclopedia
The electronic information industry in China grew rapidly after the liberalization of the economy
under the national strategic policy of accelerating the "informatization
" of its industrial development.
In 2005, China's electronic information sector made up 16.6% of the country's economic growth
and its added-value output formed 7% of the GDP. Manufacturing
was the sector that grew the fastest.
As of 2011, China is the world's largest market for personal computers
industries.
In 2005, total sales in the electronic information industry increased by 28.4% from 2004 to 3.8 trillion yuan
(approximately US$475 billion).
The added-value base of the Chinese electronic information industry is about 900 billion yuan (approximately US$112 billion). The value added ratio is (amount of value added / total sales x 100%) only 23.4%, compared to the whole national average of 27.1%.
This is evidence for China's role as an assembly
base that is dependent upon overseas components and parts, intermediary goods, and capital goods.
The number of electronic information industry-related companies in China jumped from 7,500 in 2001, to 17,600 in 2003 and 67,000 in 2005, with approximately 56,000 of these being manufacturing companies. The number of employees engaged in the industry grew from 3.01 million in 2001 to 4.08 million in 2003 and 7.61 million in 2005 (out of whom 5.51 million are employed in the manufacturing industry).
-related goods (including software), communication
equipment, electronic parts and household entertainment equipment.
Electronic parts-related investment
made up 50% of the total investment in the electronic information industry. Promotion of the electronic parts industry is a part of China’s national industrial policy to raise the ration of value added in the sector.
China’s software industry
– 11% of the electronic information industry – (software products, system integration, software services, and others) growth has been rapid as demonstrated by a growth rate of 40% with sales of 390 billion yuan (approximately US$48.8 billion) as of 2006.
Approved software companies have reached 11,660, increasing by over 1,000 per annum. There are roughly 1 million employees working in China’s software industry. China’s software exports have reached US$35.9 billion in 2005, though this was short of the US$50 billion export goal set forth in the Tenth 5-Year Plan, which ended in 2005.
Due to the expansion of the internal and external markets, the ratio of sales to production (sales rate) has remained at over 98%.
The vast majority of China's mobile phone
s, notebook computer
s, color displays and other products are exported, making China a global production base.
China's total export
-import
level of electronic information-related products in 2005 was US$268.2 billion in exports and US$220.6 billion in imports, showing growth rates of 29.9% for the former and 21.9% for the latter. The ratio of total exports and total imports in China was 35.2% for exports and 33.4% for imports.
Additionally, China's trade surplus was recorded as US$47.6 billion, with roughly half of the US$100 billion of China's total trade surplus going toward savings. There has been no change in the essence of China's export-oriented industries.
2006 targets for sales and added value in the electronic information industry are 4.6 trillion yuan (approximately US$576 billion, with a growth rate of 21%) and 1.1 trillion yuan (approximately US$138 billion, with a growth rate of 22%), respectively. As a whole, it is expected that large-scale growth will continue as before, though export-import growth has been set at a low rate of approximately 15%, taking into account the effects of the revaluation
of the yuan.
-led.
In 2005, the sales, added value, profits, and exports of foreign firms (including 6,480 firms with 100% foreign capital, merged firms and joint firms) reached 2.4 trillion yuan, 503 billion yuan, 82.2 billion yuan, and US$234 billion, respectively, accounting for 77%, 77%, 77% and 87% of China's total electronic information industry for their respective categories. These figures are all considerably higher than 2004. The export surplus of US$44.8 billion produced by 100% foreign capital firms (2,241 firms) accounted for 94% of China's total.
The total ratio of value added
for foreign firms in China is 20.9%, however, which is far behind the 27.6% ratio of local firms. There has been no major change in foreign firms' strategy for using China as an assembly base. Recently, though, there has been increasing activity by foreign firms regarding local management
centers and R&D bases, as well as in investment in the electronic parts industry.
Chinese economic reform
The Chinese economic reform refers to the program of economic reforms called "Socialism with Chinese characteristics" in the People's Republic of China that were started in December 1978 by reformists within the Communist Party of China led by Deng Xiaoping.China had one of the world's largest...
under the national strategic policy of accelerating the "informatization
Informatization
Informatization or informatisation refers to the extent by which a geographical area, an economy or a society is becoming information-based, i.e., increase in size of its information labor force. Usage of the term was inspired by Marc Porat’s categories of ages of human civilization: the...
" of its industrial development.
In 2005, China's electronic information sector made up 16.6% of the country's economic growth
Economic growth
In economics, economic growth is defined as the increasing capacity of the economy to satisfy the wants of goods and services of the members of society. Economic growth is enabled by increases in productivity, which lowers the inputs for a given amount of output. Lowered costs increase demand...
and its added-value output formed 7% of the GDP. Manufacturing
Manufacturing
Manufacturing is the use of machines, tools and labor to produce goods for use or sale. The term may refer to a range of human activity, from handicraft to high tech, but is most commonly applied to industrial production, in which raw materials are transformed into finished goods on a large scale...
was the sector that grew the fastest.
As of 2011, China is the world's largest market for personal computers
Overview
China’s electronic information industry has grown three times faster than the national GDP growth rate and has grown faster than the machinery manufacturing and metallurgyMetallurgy
Metallurgy is a domain of materials science that studies the physical and chemical behavior of metallic elements, their intermetallic compounds, and their mixtures, which are called alloys. It is also the technology of metals: the way in which science is applied to their practical use...
industries.
In 2005, total sales in the electronic information industry increased by 28.4% from 2004 to 3.8 trillion yuan
Renminbi
The Renminbi is the official currency of the People's Republic of China . Renminbi is legal tender in mainland China, but not in Hong Kong or Macau. It is issued by the People's Bank of China, the monetary authority of the PRC...
(approximately US$475 billion).
The added-value base of the Chinese electronic information industry is about 900 billion yuan (approximately US$112 billion). The value added ratio is (amount of value added / total sales x 100%) only 23.4%, compared to the whole national average of 27.1%.
This is evidence for China's role as an assembly
Manufacturing
Manufacturing is the use of machines, tools and labor to produce goods for use or sale. The term may refer to a range of human activity, from handicraft to high tech, but is most commonly applied to industrial production, in which raw materials are transformed into finished goods on a large scale...
base that is dependent upon overseas components and parts, intermediary goods, and capital goods.
The number of electronic information industry-related companies in China jumped from 7,500 in 2001, to 17,600 in 2003 and 67,000 in 2005, with approximately 56,000 of these being manufacturing companies. The number of employees engaged in the industry grew from 3.01 million in 2001 to 4.08 million in 2003 and 7.61 million in 2005 (out of whom 5.51 million are employed in the manufacturing industry).
Structure
The main areas of China’s electronic information industry are computerComputer
A computer is a programmable machine designed to sequentially and automatically carry out a sequence of arithmetic or logical operations. The particular sequence of operations can be changed readily, allowing the computer to solve more than one kind of problem...
-related goods (including software), communication
Communication
Communication is the activity of conveying meaningful information. Communication requires a sender, a message, and an intended recipient, although the receiver need not be present or aware of the sender's intent to communicate at the time of communication; thus communication can occur across vast...
equipment, electronic parts and household entertainment equipment.
Electronic parts-related investment
Investment
Investment has different meanings in finance and economics. Finance investment is putting money into something with the expectation of gain, that upon thorough analysis, has a high degree of security for the principal amount, as well as security of return, within an expected period of time...
made up 50% of the total investment in the electronic information industry. Promotion of the electronic parts industry is a part of China’s national industrial policy to raise the ration of value added in the sector.
China’s software industry
Software industry
The software industry includes businesses involved in the development, maintenance and publication of computer software using any business model...
– 11% of the electronic information industry – (software products, system integration, software services, and others) growth has been rapid as demonstrated by a growth rate of 40% with sales of 390 billion yuan (approximately US$48.8 billion) as of 2006.
Approved software companies have reached 11,660, increasing by over 1,000 per annum. There are roughly 1 million employees working in China’s software industry. China’s software exports have reached US$35.9 billion in 2005, though this was short of the US$50 billion export goal set forth in the Tenth 5-Year Plan, which ended in 2005.
Market
The vast majority of China's mobile phone
Mobile phone
A mobile phone is a device which can make and receive telephone calls over a radio link whilst moving around a wide geographic area. It does so by connecting to a cellular network provided by a mobile network operator...
s, notebook computer
Laptop
A laptop, also called a notebook, is a personal computer for mobile use. A laptop integrates most of the typical components of a desktop computer, including a display, a keyboard, a pointing device and speakers into a single unit...
s, color displays and other products are exported, making China a global production base.
China's total export
Export
The term export is derived from the conceptual meaning as to ship the goods and services out of the port of a country. The seller of such goods and services is referred to as an "exporter" who is based in the country of export whereas the overseas based buyer is referred to as an "importer"...
-import
Import
The term import is derived from the conceptual meaning as to bring in the goods and services into the port of a country. The buyer of such goods and services is referred to an "importer" who is based in the country of import whereas the overseas based seller is referred to as an "exporter". Thus...
level of electronic information-related products in 2005 was US$268.2 billion in exports and US$220.6 billion in imports, showing growth rates of 29.9% for the former and 21.9% for the latter. The ratio of total exports and total imports in China was 35.2% for exports and 33.4% for imports.
Additionally, China's trade surplus was recorded as US$47.6 billion, with roughly half of the US$100 billion of China's total trade surplus going toward savings. There has been no change in the essence of China's export-oriented industries.
2006 targets for sales and added value in the electronic information industry are 4.6 trillion yuan (approximately US$576 billion, with a growth rate of 21%) and 1.1 trillion yuan (approximately US$138 billion, with a growth rate of 22%), respectively. As a whole, it is expected that large-scale growth will continue as before, though export-import growth has been set at a low rate of approximately 15%, taking into account the effects of the revaluation
Revaluation
Revaluation means a rise of a price of goods or products. This term is specially used as revaluation of a currency, where it means a rise of currency to the relation with a foreign currency in a fixed exchange rate. In floating exchange rate correct term would be appreciation. The antonym of...
of the yuan.
Foreign firms
China's electronic information industry, like much of its economy, is both export-oriented and foreign capitalCapital (economics)
In economics, capital, capital goods, or real capital refers to already-produced durable goods used in production of goods or services. The capital goods are not significantly consumed, though they may depreciate in the production process...
-led.
In 2005, the sales, added value, profits, and exports of foreign firms (including 6,480 firms with 100% foreign capital, merged firms and joint firms) reached 2.4 trillion yuan, 503 billion yuan, 82.2 billion yuan, and US$234 billion, respectively, accounting for 77%, 77%, 77% and 87% of China's total electronic information industry for their respective categories. These figures are all considerably higher than 2004. The export surplus of US$44.8 billion produced by 100% foreign capital firms (2,241 firms) accounted for 94% of China's total.
The total ratio of value added
Value added
In economics, the difference between the sale price and the production cost of a product is the value added per unit. Summing value added per unit over all units sold is total value added. Total value added is equivalent to Revenue less Outside Purchases...
for foreign firms in China is 20.9%, however, which is far behind the 27.6% ratio of local firms. There has been no major change in foreign firms' strategy for using China as an assembly base. Recently, though, there has been increasing activity by foreign firms regarding local management
Management
Management in all business and organizational activities is the act of getting people together to accomplish desired goals and objectives using available resources efficiently and effectively...
centers and R&D bases, as well as in investment in the electronic parts industry.
See also
- Economy of the People's Republic of ChinaEconomy of the People's Republic of ChinaThe People's Republic of China ranks since 2010 as the world's second largest economy after the United States. It has been the world's fastest-growing major economy, with consistent growth rates of around 10% over the past 30 years. China is also the largest exporter and second largest importer of...
- Online gaming in the People's Republic of ChinaOnline gaming in the People's Republic of ChinaOnline gaming in the People's Republic of China represents one of the largest and fastest growing Internet business sectors in the country. With 457 million Internet users currently active in the PRC, the country now has the largest online user base in world, of which two-thirds engage in online...
- Communications in China
- Telecommunications industry in ChinaTelecommunications industry in ChinaThe telecommunications industry in China is dominated by three state-run businesses: China Telecom, China Unicom and China Mobile. The three companies were formed by a recent revolution and restructuring launched in May 2008, directed by Ministry of Information Industry , Nationals Development and...
- Internet in the People's Republic of ChinaInternet in the People's Republic of ChinaThe first connection of the mainland of the People's Republic of China with the Internet was established on between ICA Beijing and Karlsruhe University in Germany, under the leadership of Prof. Werner Zorn and Prof. Wang Yunfeng. Since then the Internet in China has grown to host the largest base...
- Software industry in ChinaSoftware industry in ChinaChina's software industry grew at a compound annual growth rate of more than 39% over the period from 2001 to 2007 to reach RMB 506 billion and is further anticipated to grow at a CAGR of nearly 22% through 2012.-Growth:...
- China Software Industry AssociationChina Software Industry AssociationThe China Software Industry Association is the major representative and one of the most active associations in the China Software industry...
External links
- China Electronics Corporation (CEC) - main state-owned industry corporation
- China National Electronics Import and Export Corporation (CEIEC) - main international trade body affiliated with the CEC
- China Statistical Information Net
- Chinese Embassy in the United States