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China’s hi-tech firms turn to ASEAN markets for opportunity

Source:   Time:

Electronic products take a lion share in China-ASEAN trade. Facing shrinking demand in the US and EU, many Chinese companies are turning to ASEAN markets. Our reporter Niu Yun traveled to Beihai, a port city in Guangxi Zhuang Autonomous Region, where Chinese hi-tech companies are showing their ambitions for the world's most populous free trade zone.

Located in the southmost of Guangxi, the city of Beihai is known as China's bridgehead to ASEAN member countries in the Beibu Gulf. The city set a bold target in 2009 that it would become a silicon valley in the region. It coincides with efforts by Chinese companies to expand into ASEAN countries, while demands from the US and the EU shrinks. Greatwall Computer arrived in Beihai in 2009, which is an 8-hour drive from its Shenzhen headquarters.

Tai Tiehan, Vice GM of Guangxi Great Wall Computer Co. said "GreatWall selected Beihai due to its location advantage. From here, we can serve both China's southwest market and the South-East Asia consumers. In particular, the launch of China-ASEAN Free Trade Zone provides our company with greater prospects for future development."

Electronic goods account for over half of the China-ASEAN trade. In 2007, 85 percent of electric products enjoyed zero tariffs. The establishment of the China-ASEAN free trade zone allows more products, including PC's, in the tax-free category. Ready for this, Great Wall Computer began to promote its own brand in Vietnam. Even the original equipment manufacturer helped it acquire 16 percent of market share in the South Asian country.

Tai Tiehan said "We already have OEM orders in Thailand. Malaysia and Indonesia will be our focus in the future."

ASEAN markets for electronic products have great potential. But competition is severe as well. Many Asian countries are also developing their hi-tech industry after years' of dependence on cheap exports. United Information Technology, a storage solutions provider, chose high added-value products to squeeze into the highly dynamic ASEAN markets.

Xia Ling, Deputy GM of Behai UIT Co. said "Our products are different. Competition mainly comes from global brands such as IBM and Samsung. In the storage device sector, most ASEAN countries lag behind. But the problem is that the China-ASEAN free trade agreement does not include the products."

In fact, many ASEAN countries are still putting China's electronic products aside in the sensitive lists. It will not change until 2018. But as the factory director from United Information Technology says... as the closest, and the cheapest, Beihai could give Chinese companies a good footing in Asean markets.

That's the final episode of BizAsia Special coverage on China-Asean free trade zone.In the past 4 days, we talked about stories reshaped by China-Asean Free Trade Zone set up at the beginning of this year. If you have any comments, please write to us at bizasia@cctv.com.

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