CHAPTER V : Printers demand by markets.

Chinese PC Industry Outlook

Since the economic reform and open-up in late 1978, China's PC industry has experienced nearly two decades of high economic growth, which has been stimulated by the consecutive increase of industrial output, consumption and capital investment. Reviewing China's economic and social development achievements during the 9th Five-year Plan period (1997-2000), the premier of China said that with the successful implementation of the 9th Five-year Plan, China materialized its second strategic objective in the modernization drive. Many projects were applied as an important part of the 9th Five-year Plan, such as "gold card project" and "gold bridge project". During the period, the PC industry has been developed continuously, high-speed, and healthy.

To deepen the reform of state-owned enterprises, is a long-term task and needs great effort. The reform of state-owned PC companies has experienced rapid changes in both economic and social aspects. The introduction of foreign advanced technology will continue to be favored by the Chinese government and business community. New ways will be adopted to utilize foreign investment, including mergers, acquisition, and investment funds and securities investment to utilize middle and long-term overseas capital. Given its vast PC markets, the country provides tremendous opportunities for investment and trade both for the present and future.

1. PC Industry in China remains in its expansion period at present. The decrease of the market growth rate in 2002 indicates that PC Industry will have an adjustment period of one to three years, followed by a short fast-growing period with the market size reaching 20 million in volume. Based on this, PC will have a small and stable growth, and gradually makes the transition to mature period.

2. The major competition means of PC manufacturers in the past was simply price war plus high-cost marketing war. Competition in PC Industry in 2002 is characterized by the comprehensive competitive edge of the enterprises in terms of product differentiation, channel optimization, market promotion and branded service.

3. With China's accession into WTO, China's PC market receives more and more attention from international PC giants and a large amount of foreign capital is pouring into China. China will become the world PC manufacturing center driven by both capital and market factors.

4. The internal structure of China's PC Industry will experience significant changes in the coming years: the position of desktop PC will drop, while that of Notebook PC and PC servers will rise quickly in the industry and in the overall market structure.