China Business

Apr 5, 2006

High-tech industries still weak despite growth

HANGZHOU - China's high-tech industries are actually still very weak despite their rapid output growth in the country's 9th Five-Year Plan (1996-2000) and 10th Five-Year Plan (2001-2005) periods, according to a National Development and Reform Commission (NDRC) official.

The remark was made by Gu Dawei, deputy director of the High-Tech Industry Department of the National Development and

Reform Commission (NDRC) made at a symposium held here over the weekend.

China's high-tech industrial sector had formed an annual output capacity of 3,442.9 billion yuan (US$429.4 billion) by 2005, up from only 409.8 billion yuan in 1995, Gu said. However, he pointed out, one should be aware that China's high-tech industries have a weak independent innovation capacity and lack core competitiveness.

Also, though China's high-tech products export had surged from $10.1 billion in 1995 to $218.3 billion in 2005, exports from foreign-funded enterprises took up 88% of the country's total high-tech products export in 2005, he said.

Taking PC exports as an example, though China's export value exceeded $100 billion, it was mostly re-export, with domestic export actually accounting for less than 10%. According to Gu, the sales profitability of high-tech industries has also been on the decline year by year, from 6.71% in 2000 to 4.22% in 2005. This indicates multinationals have transferred the profits abroad.

(Asia Pulse/XIC)

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