http://www.redherring.com/Article.aspx?a=17724&hed=82.6%25+of+Laptops+Made+in+China July 26, 2006 Factories in or near Shanghai make nearly 83 percent of the worlds portable computers, and that figure is expected to increase within a couple of years. Jeffrey Wu, an analyst from research firm iSuppli, said on Wednesday the number of notebooks made in that region of China will increase from 82.6 percent in 2005 to more than 90 percent by 2008. In addition, global laptop shipments will grow to 141.4 million units in 2010 from 61.9 million in 2005. That means 51.13 million portable computers shipped in 2005 came out of China, and 127.26 million in 2010 will have been made there. That fact that the vast majority of notebooks, a much faster-growing market than desktops, are made by Chinese manufacturers shows how important economic relations are between China and the West, particularly for such U.S. companies as Dell and Hewlett-Packard. Those relations could be more important than, say, national security concerns regarding Chinese espionage (see PC Spy Threat Alarms US Group [1]). "China and the United States have been becoming more and more mutually dependent on each other. For example, U.S. computer companies rely on cheap Chinese labor to drive costs down, which in turn keeps consumers happy with low prices," Mr. Wu said. "I think in the future this tie will be even closer." Mr. Wu said that the percentage of China-made portables will increase thanks to vendor focus and standardization. "Dell and HP aren't really interested in manufacturing anymore," Mr. Wu said. "The Wintel PC platform is already standard," so it makes sense to outsource manufacturing to cheaper countries. However, economics could take a back seat to some countries' nationalistic worries. Spy Concerns For example, earlier this year a U.S. congressional committee expressed worries that computers bought from Chinese company Lenovo could be used to spy on the U.S. government offices where the machines were to be used. "If you're a foreign intelligence service and you know that a [U.S.] federal agency is buying your company [products], wouldn't you look into the possibility that you could do something about that?" Larry Wortzel, head of the U.S.-China Economic and Security Review Commission, said at the time. But others - including Lenovo as well as U.S.-based analysts - countered that most computers are already made in China, no matter what their brand (see Lenovo, Chinese Lash Out [2]). "Almost any PC you can name has Chinese content," said Roger Kay, president of research firm Endpoint Technologies. And despite criticisms that U.S. companies take advantage of workers in developing nations, Mr. Wu pointed out that in Shanghai, employers suffer turnover rates of 10 percent or more as skilled workers jump from company to company in order to make as much money as possible. But partnerships between Western and Chinese companies could help China's economy in the long run, elevating wealth and living standards. "There are already a few companies that are... going further inland," where people are much poorer than along the coast, Mr. Wu said. Wages may be lower inland, but still represent riches to workers there. -=- Contact the writer: ECubarrubia [at] RedHerring [dot] com [1] http://www.redherring.com/Article.aspx?a=16328&hed=PC+Spy+Threat+Alarms+US+Group [2] http://www.redherring.com/Article.aspx?a=17039&hed=Lenovo%2c+Chinese+Lash+Out _________________________________ Attend the Black Hat Briefings and Training, Las Vegas July 29 - August 3 2,500+ international security experts from 40 nations, 10 tracks, no vendor pitches. www.blackhat.com
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