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Chinese TV makers moving overseas
By Ding Qingfen (China Business Weekly)
Updated: 2004-05-19 08:55

Facing the rising challenge of dumping accusations, Chinese TV set manufacturers are expanding their overseas production bases to detour trade barriers.

Shenzhen-based Konka Group Co Ltd -- leading colour TV manufacturer in China, has taken the recent step of setting up a colour TV manufacturing base in Mexico, which is expected to go into operation this month.

Until now, Konka has built up five manufacturing bases in China and three others in India, Indonesia and Mexico.

"Given its well-developed market, good auxiliary equipment and advanced transportation, Mexico has long been viewed as one of the most important overseas partners Konka seeks," Chang Qiling, general manager of Konka's brand centre told China Business Weekly.

"The anti-dump lawsuit brought by the United States last year played a decisive role, giving the incentive to establish a Mexico-based manufacturing company," according to Chang.

On April 13, the US Department of Commerce (DOC) released the final ruling on a dumping accusation against Chinese manufacturers which was launched last May. Ten major Chinese TV manufacturers, including Sichuan-based Changhong, Fujian-based Xoceco, Guangdong-based TCL and Konka, were charged a high anti-dumping tariff, ranging from 4.35 per cent to 24.48 per cent.

"Domestic colour TV makers thus can hardly reap any profit from product exports to the US market." Chang said.

The United States is the biggest exporter of colour TVs, and has led trends in the colour TV industry worldwide.

Anti-dumping rules, a trade tool often used internationally,has always been a hard nut for China to crack, despite its rising TV set exports.

Last year, China exported 32.7 million TV sets, a significant rise over the previous year.

Since the first anti-dumping investigation was carried out by the European Union (EU) against Chinese TV manufacturers in 1998, China's colour TV sector has greatly suffered from anti-dumping cases brought by the EU and the United States.

According to Lu Renbo, a researcher with the Development Research Centre (DRC) of the State Council, overseas investment is an efficient way of helping the domestic colour TV industry out of hot water.

Facing the blow, domestic colour TV makers have risen up and taken positive measures in a bid to enter the world colour TV market.

Besides Konka, in November 2003, TCL succeeded in merging with France-based Thomson, the world's leading colour TV manufacturer.

TCL can make full use of the manufacturing bases Thomson has set up, one in Poland, one in Thailand and three in Mexico, expanding its own colour TV business into these countries.

Early in 1999, TCL set up its first manufacturing base in Viet Nam.

In August 2002, TCL successfully carried out the acquisition of Germany-based Schneider Electronics AG, the worldwide leader in power and control. TCL has developed into a colour TV enterprise with annual capacity of 3.5 million units.

Changhong has co-operated with Australian and Indian colour TV manufacturers, and it has also established research and development institutions in the United States, Middle East, Russia and Europe.

As for Xoceco, it has adjusted the structure of its colour TV exports to the US, developing new and advanced products, and attracting the co-operation of some high-profile US colour TV companies, said Sun Guangrong, manager of Xoceco's brand centre.

According to Yang Dongwen, chairman of Guangdong-based Skyworth China, ignoring the overseas market is the biggest blunder that the domestic colour TV industry has made.

"Skyworth has always been paying attention to seeking overseas business partners, and as a matter of fact, we do not worry about the anti-dumping lawsuits so much." Yang said.

However, Chang said that there are difficulties ahead for Chinese TV manufacturers who produce overseas, such as increasing costs, language, an unfamiliar environment and business rules.

"We are full of confidence," Chang said.

"We will go on tapping the overseas market until we obtain the target of becoming an international colour TV manufacturer." Chang said.

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