BEIJING, Dec. 29 /PRNewswire-Asia/ -- CCID Consulting, China's leading
research, consulting and IT outsourcing service provider, and the first
Chinese consulting firm listed in Hong Kong (Hong Kong Stock Exchange:
HK08235), recently released its article on review and forecast of China's
electronic information industry.
Affected by the financial crisis, China's electronic information industry
in 2008 went through a period of slow growth and in-depth structure
adjustment.
Looking forward to 2009, CCID predicts overcapacity, decline in external
demand, cost drop and sluggish domestic demands for the industry. In the
medium to long-term, the development of China's electronic information
industry will depend on the breakthroughs of independent and innovative
technical impetus and domestic demands.
Overview of the whole industrial economic operation in 2008
Growth rate of production slows down. The production of mobile phones in
China in first ten months of 2008 reached 479.517 million sets, up 6.7%
year-on-year, and the growth rata is down 18.9% year-on-year; the production
of microcomputers reached 119.298 million sets, up 17.1% year-on-year, and the
growth rate down 19.5% year-on-year; the production of IC reached 36.23
billion sets, up 6.9% year-on-year, and the growth rate is down 9.5%
year-on-year. The market of traditional electronic products shrink further --
the output of fax machines is down 10.6% year-on-year; the output of VCRs is
down 21.6% year-on-year.
The growth rate is lower than national industrial average growth rate. In
2008H1, the growth rate of electronic manufacturing industry experienced a
slight rebound, and reached its summit in June. But in 2008Q3, the industry
growth rate declined rapidly, that by the end of Oct., the main business
income of manufacturing with over 5 million Yuan scale was up 15.7%
year-on-year, but the growth rate was down 5% over the growth rate in 2008H1,
and that the growth rate was down 10.7% over the national industrial average
growth rate.
Growth rate of export and import slows down, which is lower than the
growth rate of national foreign trade. In 2008, China's electronic information
products' import and export maintain a stable and rapid growth, but in 2008H2,
the growth rate slowed down. In the first ten months of 2008, the total import
and export volume of electronic information products reached $754.84 billion,
up 17% year-on-year, the growth rate was down 6.9% year-on-year, and down 7.4%
over the growth rate of national commodities import and export. The export of
electronic information industry reached $440.14 billion, up 20.5%
year-on-year, the growth rate was down 6% year-on-year, and down 1.4% over the
growth rate of national export trade.
In-depth industry structure adjustment. Software and components industry
maintain rapid development. As for growth rate, in the first ten months of
2008, the growth rate of software industry is 31%, up 13.4% over the whole
industrial average growth rate; the growth rate of electronic devices is
29.2%,
which is up 11.6% over the whole industrial average growth rate; the growth
rate of electronic components is 22.1%, up 4.5% over the whole industrial
average growth rate. As for proportion, the income of software industry
accounts for 13.6% of the industry in the first ten months, up 1.3% year-on-
year; the income of electronic components industry accounts for 28.6% of the
total industry, up1.7% year-on-year. High-end products enjoy rapid
development.
The growth rate of LCD TV and PDP TV are respectively 51.6% and 142.0%. The
share of flat panel TVs accounts for 29.8% of the total market; the growth
rate of notebook computer is 28.7%, and the shares of notebook computer
accounts for 73% of microcomputer market; and LCD display accounts for 94% of
display market.
Growth rate of Midwest area overtook that of the East in 2008, as the
Midwest area went through an industry transfer. In the first top ten months of
2008, the income of electronic information manufacturing in east China reached
3793.48 billion Yuan, up 14.6% year-on-year; the income of western region
reached 104.74 billion Yuan, up 37.9% year-on-year. The growth rate in western
region is up 23.3% over the growth rate is eastern region. The income of
central region reached 157.33 billion Yuan, up 29.5% year-on-year, whose
growth rate is up 14.9% over eastern region.
Effects of the Financial crisis surfaced in 2008Q3
Figures show that the industry is getting weaker as early as 2007: both
industrial sales revenue and the growth rate of export declined. The export of
China's electronic information products in 2007 was up 26.2% year-on-year, but
the growth rate was down 9.4% compared to 2006. The fall of export growth rate
becomes the main factor of the downslide of the industrial growth. The trend
began as early as 2007H2, with external demands of China's electronic
information products started to plummet as the economies in major European and
American countries weakened.
In 2008H1, enterprises suffered increasing cost pressures. The continuous
increase in prices of international bulk commodities led to a global inflation
as many European and American developed countries' inflation reached record
levels in recent years. Imported inflation pressure as well as internal
factors in China's economy led to increasing PPI, which led inflation to reach
new heights in ten years in August. Rising PPI resulted in increasing cost
pressures for the electronic information industry. On the other hand, average
retailing prices of electronic products continued to fall. Rising costs and
decreasing product price mean there is smaller room for profit, which is
reflected in the net and gross profit rate of Lenovo, ZTE, BOE, and other IT
enterprises.
On the export side, in 2008H1, export fluctuated but did not record an
obvious decline, which in 2008H2 showed a much sharper downturn trend. The
growth rate in June was 23.6%; but the growth rate in August, Sept. and Oct.
were respectively 22.5%, 21.7% and 20.5%. In 2008H2, the gradual recession in
European and American economies led to the gradual decline in China's
electronic information products, which seriously the industrial development
due to a large reliance on exports, as showed in the 2007 statistics that the
whole electronic information industrial export dependency index was about 60%.
The influence is obvious in 2008Q3 and 2008Q4. The growth rate of
electronic equipment manufacturing's income in the first nine months of 2008
decreased by 3.1% year-on-year (the manufacturing scale is over 5 million
Yuan). The growth rate in 2008Q3 decreased rapidly, which shows that the
global crisis has greatly impacted the China's electronic information
industry.
Industrial forecast in 2009
With European, American and Japanese economies still in recession,
external demand will remain weak. In 2008Q3, Germany and Japan confirmed that
their economies have plunged into recession; in Dec., America confirmed that
its economy have entered into recession. Meanwhile, leading economic
indicators in European, American and Japanese all point to a downturn, and
analysts have forecasted that the global economy need two years to get out of
the recession.
As for domestic demand, China is launching a series of measures to boost
internal demand, but their effects are yet to be seen, especially that these
measures focus more on the financial sector and infrastructure and that the
actual results will first be reflected in the investment field before
benefiting consumption.
On the other hand, manufacturers will be further relieved from cost
pressures as commodity prices continue to fall, and prices of petroleum,
mineral products and nonferrous metals have decreased by over 50%. As for
China's market, PPI has also decreased rapidly, from 110.1 in August to 106.6
in Oct., and in Nov., the PPI has decreased to 102. It is forecasted that PPI
will present downslide trend in the next few months.
CCID therefore predicts that overcapacity, shrinking external demand,
falling costs and sluggish domestic demands will characterize the industry in
2009. China's electronic information industry developed rapidly from 2003 to
2007. During these years, China's electronic information industry built great
production capacity through export and investment, leading to its high
dependence to export. With a weak global economy, the fall in external demand
will lead to production surpluses, which manufacturers will respond by cutting
prices to boost domestic consumption.
Industry development strategy
Fluctuations in the export mean that China will need to turn to emerging
economies for new markets, amid recessions in the American, German and
Japanese markets. The new external demands may come from India, Russia and
Brazil.
China's electronic manufacturing has cost advantage worldwide, but its
operation efficiency is much behind that of Japan and China Taiwan. China's
electronic information industry should eliminate its backward capacity and
improve manufacturing efficiency.
Generally speaking, China's electronic information industry takes on an
extensive growth, driving by export and investment. Lower cost has been a
major competition method in the development of China's electronic information
industry. However, this development mode has been somewhat spent in these two
years. Long term development of China's industry should turn to technology
innovation and opening of domestic demand.
Compared with traditional industry, electronic information industry owns a
shorter lifecycle of technologies, products, and industry upgrading. For
example, the replacement of flat panel display to CRT leads to upgrading of
the whole display industry and creates huge market opportunities. Grasping the
strategic chance of analog technologies evolution to digital technologies,
South Korea achieves breakthrough in flat panel display, storage,
communication, and other fields.
About CCID Consulting
CCID Consulting Co., Ltd. (hereinafter known as CCID Consulting), the
first Chinese consulting firm listed in the Growth Enterprise Market of the
Stock Exchange (GEM) of Hong Kong (stock code: 8235.HK), is directly
affiliated with China Center for Information Industry Development (hereinafter
known as CCID Group). Headquartered in Beijing, CCID Consulting has so far set
up branch offices in Shanghai, Guangzhou, Shenzhen, Wuhan and Chengdu, with
over 300 professional consultants after many years of development. The
company's business scope has covered over 200 large and medium-sized cities in
China.
Based on major areas of competitiveness: industrial resources, information
technology and data channels, CCID Consulting provides customers with public
policy establishment, industry competitiveness upgrading, development strategy
and planning, marketing strategy and research, HR management, IT programming
and management. CCID Consulting's customers range from industrial users in
electronics, telecommunications, energy, finance, automobile, to government
departments at all levels and diversified industrial parks. CCID Consulting
commits itself to becoming the No. 1 advisor for enterprise management, the
No.
1 consultancy for government decisions and the No. 1 brand for informatization
consulting.
For more information, please contact:
Cynthia Liu
Coordinating Manager
CCID Consulting Co., Ltd.
Tel: +86-10-8855-9080
Email: liuyan@ccidconsulting.com
SOURCE CCID Consulting Co., Ltd.
Cynthia Liu, Coordinating Manager, CCID Consulting Co., Ltd. at
+86-10-8855-9080 or liuyan@ccidconsulting.com
