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Economy

China moves up the exports value chain

1
2016-01-07 08:39China Daily Editor: Qian Ruisha
Huawei Technologies Co's latest smartphone model Y6 debuted in Seoul, South Korea, in December 2015. (Photo/China Daily)

Huawei Technologies Co's latest smartphone model Y6 debuted in Seoul, South Korea, in December 2015. (Photo/China Daily)

An ADB report shows that the country has overtaken Japan, South Korea,Malaysia

About 20 kilometers south of Kuala Lumpur, on the platforms of Sri Petaling light rail station, passengers eagerly wait for China-made rakes that can carry them to the heart of the Malaysian capital.

A bunch of state-of-the-art six-car rakes made by China's CRRC Zhuzhou Electric Locomotive Co have been operating on the line since October 2015. Hydraulic brakes provide a quicker and safer stop mechanism to the rakes, which are China's first high-tech railway exports to a member of the Association of Southeast Asian Nations.

The light rail system symbolizes China's evolution on the exports value chain, a December 2015 report of the Asian Development Bank shows.

Exports of high-tech products are now a key driver of the Chinese economy, the ADB said in the report.

By 2014, China had become the largest exporter of high-tech products in Asia with a 43.7 percent share, overtaking Japan, which had a 30 percent share nearly a decade ago. They are followed by South Korea and Malaysia.

About one-third of exports from China were of high-tech products, according to the ADB report.

Chinese technologies related to railways, nuclear power, shipbuilding and telecommunications are now popular in overseas markets.

Here's a rundown on the China's brightening manufacturing prowess:

Information technology

Telecom equipment exports to Asia drive Chinese manufacturers' profits these days.

Huawei Technologies Co Ltd, the world's biggest telecom equipment maker, is helping phone companies in Asia to build networks. It also sells smartphones and smartwatches in developed markets, aiming to challenge Apple Inc and Samsung Electronics Co Ltd in the consumer telecom market.

Li Jin'ge, president of Huawei Asia Pacific, said telecom technologies, particularly broadband, cloud computing, and big data, are already driving the digitization of all industries, which is making Asian economies vibrant.

"These technologies are also promoting improvements in planning and construction, management and operations, livable environments, giving a human touch to cities around the world."

In Central Asia, Huawei is providing products and services to a number of oil and gas companies, including Beineu Bozoi Shymkent Gas Pipeline in Kazakhstan, Asia Trans Gas in Uzbekistan and Amu Darya in Turkmenistan. The area is the world's third-largest oilfield and plays an important role in the global oil and gas industry.

The Chinese company said its "digital pipeline" technology, which improves efficiency, reduces energy consumption, and enhances operational safety of oil pipes by researching operational data, has been applied to a total of 4,623 kilometers of gas pipelines in Central Asia.

Huawei's key projects include the Kazakhstan-China natural gas pipeline, called the AB line, which is the world's first and longest digital natural gas pipeline.

Mike Han, president of Huawei's Central Asia and Caucasia Enterprise Business, said: "Since we established our business in Central Asia in 1997, Huawei has been providing competitive communication products and services to telecom carriers, enterprises, and consumers by bringing cutting-edge communications technologies and products."

In the consumer telecom market, Huawei sells smartphones in emerging Asian markets, but it has been outpaced by some of the smaller vendors.

For instance, Xiaomi Corp, a Beijing-based smartphone maker, sells its own smartphones in India, Indonesia and other Asian countries via local shopping websites.

In May 2015, Xiaomi partnered with Taiwan-based contract manufacturer Foxconn Technology Group to open its first overseas smartphone manufacturing plant near the southern Sri City in Andhra Pradesh state.

It is the five-year-old company's first overseas manufacturing site.

Lenovo Group Ltd, the biggest personal computer maker, quickly followed suit. It has started to assemble devices in the eastern port city of Chennai. Meantime, Lenovo is aiming to let the newly acquired Motorola Mobility unit to tap into the high-end smartphone markets such as Singapore, Japan and South Korea.

Fiberhome Technology Group, a network equipment maker that develops metropolitan broadband Internet Protocol communications technologies, said the expanding demand for optical fiber cables in overseas market, provides a good opportunity for the Wuhan-based company.

Lyu Weiping, vice-president of Fiberhome, said its technology advantage is helping the company edge out global competition. "We tailor-make products for different overseas markets depending on the demand and factors like population density," Lyu said.

Fiberhome said its 2014 export revenue exceeded 2.4 billion yuan ($305 million), a 90 percent increase year-on-year.

"China's Belt and Road Initiative has been fueling the sales," said Lyu. The company said it will focus on growth in neighboring markets and attract research talents in the region. The Belt and Road strategy, the brainchild of the central government, encourages exports of high-tech products.

  

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