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China overtakes U.S. as global IT export leader

China overtakes U.S. as global IT export leader

For the first time, China has overtaken the United States as the world's leading exporter of information and communications technology (ICT) goods.

According to a new study issued Monday by the Organization for Economic Co-operation and Development (OECD), China exported (US) $180 billion worth of ICT goods in 2004, compared with the U.S., whose exports in the same category were valued at (US) $149 billion that year.

The year before, the U.S. led with exports of ICT goods worth $137 billion, with China nipping at its heels with $123 billion worth of ICT goods.

China's share of total world trade in ICT goods, including both imports and exports, rose to $329 billion in 2004, up from $234 billion in 2003 and $35 billion in 1996.

The OECD data also showed a shift towards increased trade between China and its Asian neighbours, with a corresponding decline in ICT imports to the region from the European Union and the United States.

To manufacture laptops and advanced mobile phones, China previously relied on imported electronic components, such as computer chips, from EU member countries and the United States.

But Beijing is now increasingly sourcing from Asian countries, including Japan (18 percent of China's ICT imports), Chinese Taipei (16 percent), Korea (13 percent) and Malaysia (8 per cent).

The increased share of Japan's exports to China, for example, was mainly in electronic components. China itself is also manufacturing and exporting more electronic components than ever before, with these now forming China's second largest export item, after computer and related equipment.

China is now also the single largest exporter of ICT goods to the U.S., supplying 27 percent of all U.S. imports of these goods in 2004, up from only 10 per cent in 2000. China's ICT trade surplus with the U.S. stood at $34 billion in 2004 and with the E.U. at $27 billion.

China continues to mainly import electronic components (65 per cent of imports in 2004) while mainly exporting computer and related equipment (46 per cent of total exports in 2004). In addition to satisfying local market demand, electronic components are used to assemble computer, audio and video and telecommunications equipment (80 per cent of total exports in 2004) and also consumer electronics such as MP3 players.

A significant share of Chinese ICT exports is transhipped through Hong Kong before being delivered to its final destination. Chinese exports to Hong Kong were up from $11 billion in 2000 to $41 billion in 2004, a little less than a quarter of all Chinese ICT goods exports.

China also has significant trade deficits in electronic components with a $50 billion deficit in integrated circuits, importing $62 billion and exporting $11 billion. In addition, China has a $7 billion deficit in semiconductors, importing $10 billion and $3 billion.


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