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Electronic info sector: large but lacking strength

2008-06-25 From: CE.cn

By Hu Hongjun

On the "2007 Briefing on Key Tasks for the Electronic Information Industry" convoked recently, relevant personnel in charge from the Ministry of Information Industry gave an interpretation to the "Eleventh Five-Year Plan for the Information Industry" (abbreviated as "the Plan" hereinafter). In accordance with the objectives set in the Plan, the sales revenues of China's electronic information industry will amount to RMB9 trillion yuan by 2010, accounting for nine tenths of the total revenues for the information industry with an annual growth rate of 18 percent; the increment of the electronic information industry will account for 7.5 percent of the GDP; the export volume of electronic information products will maintain a proportion of about 35 percent of China's total export volume for purpose of foreign trade, and such an export volume will become increasingly important in foreign trade.

Statistics show that in 2006, China's electronic information industry realized a sales income of RMB4.75 trillion yuan with a growth rate of 23.7 percent and an export volume of US$364 billion with a growth rate of 35.7 percent. Quite a few electronic information products made in China ranked No. 1 in the global market in terms of the market shares seized: the market shares seized by mobile phones made in China amounting to 47 percent, those seized by computers made in China 40 percent, and those seized by color TV sets made in China 48 percent.

Take the Top 100 electronic enterprises for example. In 2006, all those enterprises realized a taking of over RMB1 trillion yuan and a gain of RMB20 billion yuan; and their export delivery value increased by over 28 percent. Such enterprises are becoming a main force to drive the industry to move steadily by and by.
 
Nevertheless, experts inside the industry say frankly that at present, China's electronic information industry has a large scale but is still less strong; its level of economic benefits is still rather low. Statistics show that the profit margin for the sale of the manufacturing industry above designated scale is 3.56 percent, up 0.1 percentage point year on year but still at a rather low level. The main reason is that solely foreign-funded enterprises, Sino-foreign joint ventures and Sino-foreign cooperative enterprises, which are playing a leading role in China's electronic information industry, are mainly engaged in product processing and product manufacture with a rather low profit margin. Such a reason shows substantially that in most cases, China is still engaged in the middle and low parts on the industrial chain, its capacity to control industries is relatively less substantial and the strength of local enterprises is rather weak.

In addition, there still exist problems concerning the system and the mechanism. The industrial management system and regulating system to be further consummated, the construction of legal system to be strengthened, the weak core fundamental industries, the lack of innovative capacity, and the still conspicuous structural contradictions, etc. have also become problems for the electronic information industry to face in its development.

Experts believe that one of the main reasons for China's electronic information industry to have a large scale but be less strong is that there has resulted in a situation of being enslaved as enterprises are less capable to make innovations independently while being short of core technologies.

In accordance with the Bulletin on the Economic Operation of the Electronic Information Industry in 2006 released by the Ministry of Information Industry, the situation that China is enslaved in terms of key components and parts was still unchanged: the integrate circuit design as a whole is still on a low level; there exists a fairly serious bottleneck for the development in the field of flat panel display devices; and core material and equipment industries are still in the initial stage. Meanwhile, it was pointed out in the Bulletin that supporting policies used to encourage industries to conduct independent innovations were still less consummated; it was still impossible for the management mechanism to satisfy all requirements on independent innovations; the bottleneck for independent innovations in respective industries in terms of talents, funds, and systems was still comparatively obvious; and a mechanism through which inputs like funds can show favor for the research and development of enterprises was still not shaped up completely yet.

According to the arrangement, the Ministry of Information Industry is actively carrying out and putting into effect the Circular of the State Council on Implementing Several Supporting Policies for the Outline of the State Mid/Long-term Scientific and Technological Development to draw relevant supporting policies and measures on independent innovation during the Eleventh Five-Year Period so as to offer supports in many aspects like policies and measures, major projects and development of standards and encourage enterprises to reinforce their independent development.

The implementation of major specific programs by pooling funds and with policies will be propitious to driving the development of China's electronic information industry and making breakthroughs. On the briefing, relevant personnel in charge from the Department of Overall Planning, Ministry of the Information Industry introduced that the Ministry of Information Industry actively boosted major specific projects in such key industrial fields as integrate circuit and software, flat panel display, TD-SCDMA, and digital television last year: as far as digital television is concerned, a specific supporting scheme was developed after studies on the industrialization of ground digital television products; as far as TD-SCDMA industrialization is concerned, remarkable progresses were made in tests for commercial purposes and an implementation scheme for Phase II had been drafted.

As disclosed by the relevant personnel in charge, from now on, the Ministry of Information Industry will make efforts to develop core fundamental electronic industries like integrate circuit industry, software industry, and digital audio-visual industry while bringing into full play the enthusiasm of various parties to organize the implementation of major projects concerning integrate circuit, software, new generation mobile telecommunication, next-generation Internet, digital audio-video, broad-band communications, advanced computation and new type electronic components, etc. In the meantime, the Ministry of Information Industry together with relevant ministries and commissions will gradually consummate the environment for the development of information industries with attempts to put forth laws and regulations including Regulations on Accelerating the Development of the Software Industry and the Integrate Circuit Industry and the Regulations on the Applications of Information Technologies. Supporting industrial policies will be studies and developed concerning such fields as digital television and new type display components, which hold a conspicuous place in the industry and play a role as the obviously driving force. With relevant laws and systems set up and consummated under the premise that WTO rules were satisfied, greater efforts will be made to support the government's purchases of domestically manufactured electronic information products with policies. Moreover, as far as internationalization is concerned, the guidance of the Ministry of Information Industry will be reinforced during the Eleventh Five-Year Period so as to improve the utilization of foreign funds and guide the investment of foreign funds in core fundamental industries, research and development, and marketing as well as the middle and western parts of China and Northeast China. The role of multi-lateral mechanisms and bilateral mechanisms will be brought into full play so as to take an active part in and drive negotiations on rules for international trade, standardize the competition order concerning exports, and offer supports to domestic enterprises in their efforts "to go overseas" in various aspects.

 
 
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