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Opportunities
exist across sectors in China: CII
CII
HIGHLIGHTS KEY SECTORS FOR DOING BUSINESS WITH CHINA
Non-traditional
areas and a gamut of old and new economy sectors
offer tremendous opportunities for Indian business in China,
according to Confederation of Indian Industry. The opportunities for
Indian companies in doing business with China
in
some of the sectors include telecommunications equipment,
energy, medical equipment, automotive parts, agricultural chemicals,
plastics and packaging equipment.
According
to CII, an insight into the Chinese economic picture suggests that
tremendous opportunities lie beneath the key sectors like
Information Technology, Pharmaceuticals and Biotechnology. It is
this very opportunity that beckons the Indian industry today. An
analysis of these sectors has revealed some key facts and figures,
which point towards this opportunity.
Telecommunications
Equipment is a burgeoning sector in China, says CII. In order to
promote further competition and the development of China's
telecommunications industry the number of companies permitted to
operate in the telecommunications market has been increased.
In 2001, the number of new mobile phone users increased to 94
million, which was more than the total number of users in China
prior to 1997. By May 2002, the number of mobile phone users reached
170 million, the largest number of users in the world. The amount of
investment in infrastructure and equipment
was projected to be USD 27.8 billion in 2002.
Upon
WTO accession of China, key telecommunications services in Beijing,
Shanghai and Guangzhou, which carry about 75 percent of all domestic
traffic, will be immediately open to foreign competition. Foreign
carriers will be permitted up to 25 percent ownership in mobile
services and 30 percent ownership in value-added services.
China's
overall Energy consumption ranks second in the world. China’s
growing demand for energy has caused this traditionally off-limits
sector to gradually open up to increasingly larger scale foreign
participation. The best opportunities for foreign participation are
in natural gas infrastructure development and offshore oil
exploration and production. Offshoot industries with high technology
components are in high demand. Good opportunities exist in both
upstream and downstream engineering, project supervision, license,
equipment technology, consulting, marketing and supply sectors.
Medical
Equipment - China’s medical device market is the largest in Asia
outside Japan, and one of the fastest growing in the world, suggests
CII. The medical sector experienced 18 percent growth in 2001.
Imports account for approximately 50 percent of China’s USD 2.5 -
3.0 billion medical device market, with the US controlling around 35
percent of the total imported products, followed by Japan and
Germany.
China
is making efforts to develop its Automotive Industry into a pillar
industry in the national economy by 2010. By 2005 annual production
volume will reach 3.2 million vehicles of which 1.1 million will be
passenger cars. The value of automotive industry production is
projected to be USD 15.7 billion. Says CII, that China’s accession
to the WTO will have a great impact on the automotive industry;
by 2006, tariffs on imported automobiles will
reduce to 25 percent components to 10 percent.
In
the tenth-five year plan (2001-2005), the annual growth rate of
general Synthetic Resins is projected to be 6.8 percent and
Engineering Plastics Materials is expected to be 10 percent. The
local output of plastic materials and resins can only satisfy 50
percent of market demand. As a result, China will
import large quantities of plastic materials each year.
CII
also highlighted
the fact that Chinese economic growth has resulted in an
increased demand for packaging and therefore packaging machinery. In
reviewing the demand for packaging equipment from 2000 to 2002, it
is very clear that interest in imported packaging equipment
continues to increase. From January to April 2002, China imported
packaging equipment valued at USD200 million.
Mr.
Anand Mahindra, President,
Confederation of Indian Industry is leading a 35 member
delegation to China next week coinciding with the visit of the Prime
Minister of India to China.
The CII delegation, amongst other things, will have
interaction with representatives of Chinese
Business & Industry leaders to work out detailed
sector-wise action plan.
New
Delhi
19 June 2003 Top
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