China's electonics industry is still dominated by foreign funded manufacturers processing material imported from elsewhere according to a report in the China Securities Journal today. And despite China's efforts to boost its domestic capacity, the influence of foreign funded manufacturers is continuing to grow.
According to the report, China exported US$459.52 billion worth of electronic products last year, up 26.3% year-on-year, while exports from foreign funded manufacturers grew at a faster rate of 27.3% year-on-year to US$309.26 billion, accounting for 67.3% of total electronics imports. Exports from foreign-Sino joint ventures grew 18.1% on the previous year to US$74.72 billion, accounting for a further 16.3% of total exports.
The figures also confirm that China is still just a cog in the machine rather than a global exporting bully. The processing and assembling of imported materials made up 84.7% of total electronics exports last year.
On the same day that it was reported that consumption outpaced investment in the relative size of their contribution to economic growth, electronics exports accounted for just over half of the total US$804.7 billion value of China’s electronics trade last year. China is starting to consume what it makes. However, exports still slightly outpaced the overall market, which grew 23.5% to US$804.7 billion, 9.8 percentage points slower than the rate of growth the year before. Exports grew 9.5 percentage points slower last year than in 2006.
While domestic consumption still has a way to go to erode the global economy's China export-induced imbalances, the figures confirm that China's contribution to these imbalances is made as much outside of China as it is within its walls.