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Deng Yusong

I. To Timely Adjust Strategic Targets

China has joined the world’s giants in terms of scale of its electronic information industry. However, compared with the world’s advanced level, China still lags behind in the field of industrial structure, core technology, managerial skill, aggregate benefit and popularization. China should further transform the functions of government to create better conditions for enterprises and industries to grow larger and stronger. Meanwhile, China should adopt various measures to encourage technical renovation and to increase the proportion of products with China’s own intellectual property rights, thus realizing the transition from a large electronic and information products manufacturing country to a technically strong country. By sharpening the competitive edge of information industry on the international market, China’s comprehensive competitiveness may be enhanced as a whole, and the economic security of the country will be better guarded.

II. To Speed up the Pace of Trade Association Construction

After China’s entry into the World Trade Organization (WTO), import and export of electronic and information products have kept growing rapidly. However, there is not a trade association that really represents the interests of the sector and carries out self-discipline. Lack of trade association in the sector has not only induced excessive competition among Chinese enterprises on both domestic and international markets and caused trade disputes, but also left the sector incapable of handling various unfavorable events. In developed and market-oriented countries, trade association, as a "third department" besides government and enterprises, has acted as a bridge between the government and enterprises and market, and also as a social organization that promotes self-discipline, standardizes activities and ensures fair competition in the trade. As China’s reform of market economic system deepens, it is necessary for China to establish a real marketized trade association as soon as possible in order to ensure the sustained, healthy and rapid development of electronic and information industry.

III. To Build up Enterprise Advantages for Competition

As the world’s major electronic and information products manufacturers keep moving their production bases to China, the labor-cost advantage of local Chinese enterprises no longer exists. Compared with multinationals’ factories in China, local Chinese enterprises lag behind in the field of managerial skill and worldwide marketing channels. They are facing increasing pressure of competition. Thus to build up advantages for competition is an inevitable choice for local Chinese enterprises, and the key is to find effective ways to combine localization with global resource allocation and to seek new development through technical upgrading as well management and market innovation.

March 2004

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