China To Overtake Europe in Electronics Production by
2005
Faced with increasing production costs, European manufacturers
will move out of Europe, and their first choice for manufacturing
will be China. This is according to a report released
by Booz Allen Hamilton, which was commissioned by the
World Bank.
It is estimated that China's share of electronics production
will jump from 8% in 2001 to 14% in 2005. By that year,
China's share of world production will amount to US$80
billion annually, putting it in third place behind North
America and Japan. This would put its output at near the
combined total for Taiwan, South Korea, Singapore and
Hong Kong.
According to company executives interviewed in the report,
they planned to increase their manufacture in China because
it is, comparatively speaking, a more promising market.
Initially, they would start by placing their manufacturing
there, then would later relocate research and development
there as well.
More than half of respondents (64%) said that they felt
that the SARS impact was relatively minor and temporary.
Most of China's growth has come from more labor-intensive
areas including components, LCDs, cables and electrical
supplies. These are the areas where China's cost savings
are more apparent.
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