China overtakes US as biggest supplier of tech goods

The figures compiled by Paris-based OECD also reveal that China has come close to matching the US in the overall value of its trade in information and communications technology products. The value of China’s combined exports and imports of such goods soared to $329 billion in 2004 from $35 billion in 1996. Over the same period, the value of American information technology trade expanded at a slower rate, to $375 billion from $230 billion.

To some industry experts, the report is more evidence that China has made progress in its long-term plan to upgrade the capacity of its manufacturing as it strives to become a major economic power.

“It confirms that the Chinese economy is really moving up the value chain from simple manufactured goods like textiles, shoes and plastics to very sophisticated electronics,” said Arthur Kobler, a business consultant in Hong Kong and former president of AT&T in China.

The most spectacular demonstration of China’s ambition to become a consumer electronics heavyweight came in May this year when Lenovo, the Chinese computer maker, paid $1.75 billion to buy IBM’s personal computer unit.

Also, China’s efforts to impose its own technology standards across a range of consumer products, including mobile phones, digital photography and wireless networks, are widely interpreted as a strategy to dominate the global market for information technology goods.

Some analysts say they believe that Chinese technology exports would have overtaken the US much earlier without restrictions applied by Western countries to China on the transfer of so-called dual-use technologies — which can be used for both civilian and military ends — to China after the 1989 Tiananmen crackdown.

“Without this trade barrier, China’s information technology industry would have grown much faster,” said Li Hui, head of China research for Investment Bank CLSA Asia-Pacific Markets.

The report could also heighten fears among some critics that China’s drive to build a powerful information technology and consumer electronics sector could have far-reaching military consequences for the US. — NYT