| Multinational Investment in Household Appliances in China Shows Three Trends |
| Monday,February 07,2005 Posted: 11:07 BJT(0307 GMT) |
| The 2005 Report on Multinationals in China recently published by the Ministry of commerce show multinational investment in one of the most favored industries, consumer electronics is showing three trends. A new group of China-Japan joint ventures are emerging. China’s importance to Japan has gone beyond manufacturing base to sales market. The report also indicates some large multinationals are abusing their market dominance and government influence and erecting barriers to block market access and technology upgrading of domestic firms on the pretext of IPR protection.
As China’s domestic appliance industry enters a new phase of realignment, multinational investment in this industry is also showing three trends. The first trend is industrial upgrading. Companies like LG and Samsung are launching high value-added products in China. Siemens is introducing its high to low-end products. The second trend is the two-way extension of the industrial chain. In the compressor industry, experts predict by 2005 multinational-branded compressors for refrigerators and air-conditioners will see 20% to 25% increases in production. By 2008, their production capacity will increase to 53% and 89% of the respective industry. In addition, in the areas of power engines and controls, Emerson and Invensys already enjoy a monopoly in the market. Foreign firms are also equipped to monopolize such markets as steel, secondary refrigerant, other basic materials and core components and their designs. The third trend is multinationals are increasing their shareholding with a further view to exclusive foreign ownership. (FDI)(02/06/2005) |
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