Transcript Document 7285726

A UK Trade & Investment Mission to China and Korea
Wireless Telecomms
in China & Korea
Country Overviews:
Setting the Scene
Maurice Potts
UK Trade & Investment
Tel:
Email:
020 7215 2456
[email protected]
A UK Trade & Investment Mission to China and Korea
A UK Trade & Investment Mission to China and Korea
Country Overview
 Within ICT, both Korea and China have a common high view of
strategic importance and are seeking to collaborate to advance their
own national and joint regional interests.
 In telecommunications, Korea pioneered its path in the 1990s, with
China following Korea’s example over the past decade.
 Alongside Japan, South Korea is acknowledged as a world leader in
the deployment and exploitation of the new communication
technologies.
 China is seeking to emulate the success of its neighbours – for
example, the pioneering development and deployment of its home
grown TD-SCDMA 3G technology.
A UK Trade & Investment Mission to China and Korea
Country Overview
 Although approaches from Asia cannot be transplanted to the UK,
lessons must be learned by UK Government and Industry, if the UK
is to effectively exploit the country’s strengths and environment to
compete at the forefront of the global ICT industry.
“Although there are many economic, social,
cultural and geographic differences …(from the
UK)…this does not mean that their experience
should be disregarded, as there is much that the
UK can learn from these two countries…”
Source: DTI Telecoms Mission, 2005
A UK Trade & Investment Mission to China and Korea
National Comparators
Indicator
China
Korea
UK
Capital
Beijing
Seoul
London
Area
9,956,960 sq km
98,480 sq km
244,820 sq km
Population*
1.29 billion
48.4 million
60.4 million
Population Growth Rate
0.58%
0.38%
0.28%
Urban population**
42.99%
80.80%
89.20%
Population density
(inhabitants/km2)*
129
491
243
Life expectancy at birth
71.4 yrs
76.85 yrs
78.38 yrs
Ethnic Groups
Han Chinese 92%
Others 8%
Homogeneous (except for
about 20,000 Chinese)
White 92.1%, black 2%,
Indian 1.8%, Pakistani 1.3%,
mixed 1.2%, other 1.6%
Geography
Demographics
* Central Intelligence Agency, July 2005
** UN Common Database, 2005
A UK Trade & Investment Mission to China and Korea
National Comparators
Indicator
China
Korea
UK
GDP*
$2.22 trillion
$925.1 billion
$1.782 trillion
GDP/Capita*
$1,700
$19,200
$29,600
GDP growth*
10.70%
4.60%
3.20%
Consumer inflation*
1.50%
3.60%
4.80%
10.10%
0.90%
Economic Indicators
Industrial Productivity
Growth Rate
Unemployment*
4.20%
3.60%
4.80%
Imports*
$660 billion
$214.2 billion
$439.4 billion
Exports*
$961.9 billion
$250.6 billion
$347.2 billion
Expenditure on R&D (as % of
GDP)
1.23%
2.96%
1.90%
Currency
Renminbi (Yuan)
Won
British Pound
Mobile penetration
420 million
38.3 million
65.5 million
Broadband penetration
51.9 million
20.5 million
8.8 million
* Central Intelligence Agency, July 2004
A UK Trade & Investment Mission to China and Korea
China
People and Geography
 Largest population in the world – approx. 1.3 billion and an area of
9,600,000 sq km. This scale is a key factor in shaping the Chinese
perspective on the telecoms industry and its associated technology and
standards.
 Shanghai and Shenzhen – may be considered as representing the
commercial and manufacturing centres of China.
 Shanghai is a city with a dynamic atmosphere of commerce, in every
way reflecting its entrepreneurial past and embracing of the market
economy.
 Shenzhen has Special Economic Zone status, and is a rapidly growing
industrial region with a population of ‘new immigrants’ from other parts
of China and an average age under 30.
A UK Trade & Investment Mission to China and Korea
China
Economic Development & International Trade
(1)
 Continuing growth rates of 10%, which can be traced to major changes
over the past three decades (see table on next slide):




move to a more market-orientated economy in 1978;
increased the authority of local officials and plant managers in industry;
permitted a wide variety of small-scale enterprise in services and light
manufacturing; and
opened the economy to growing foreign trade and investment (Special
Economic Zones - SEZs).
 Joined World Trade Organisation (WTO) in 2001

legislation aimed at protecting IPR and reducing piracy and China has
begun to develop its own IPR, in areas such as telecoms.
A UK Trade & Investment Mission to China and Korea
China
Economic Development & International Trade (2)
A UK Trade & Investment Mission to China and Korea
China
Economic Development & International Trade (3)
 At start of 2007, China stood as the 2nd largest economy in the world
at about US$10 trillion (measured by domestic Purchasing Power
Parity).
 By end 2008 expected to overtake Germany as the third largest
economy (measured by exchange rate) , and to overtake Japan by
2020.
 The Central Committee of the Chinese Communist Party’s 11th 5-year
plan for 2006 – 2010 targets a ‘relatively conservative’ 45% increase in
GDP.
A UK Trade & Investment Mission to China and Korea
China
Significance of ICT to the Chinese Economy
 The electronic information products industry is China’s largest industry
(by sales revenue), a position it has held since 2003, with an annual
sales revenue of 4.75 trillion Yuan ($617 billion) in 2006.
 Telecommunications plays a major role in this figure, with mobile phone
production volumes estimated at 450-480 million units in 2006, and
representing almost 50% of the world’s mobile phones.
 In 2006, China’s electronic and information products exports were $364
billion, representing 37% of China’s total export volume.
 Electronic and information imports import volume was $287 billion and
representing 36% of China’s total import volume.
A UK Trade & Investment Mission to China and Korea
China
Significance of ICT to the Chinese Economy, cont.
 ITU estimates of teledensity in China in 1990 were 1%. By end 2006
this teledensity figure was 63%, comprising 371m fixed line
subscribers and 481m mobile subscribers.
 Broadband subscribers in China have grown from 20m in mid 2004 to
52m by early 2007.
 Huawei and ZTE, continue to be the most prominent exporters in the
Chinese telecoms market, with the former adopting a more
aggressive international profile

2005: 58% of Huawei’s & 36% of ZTE’s sales were exports
A UK Trade & Investment Mission to China and Korea
South Korea
People and Geography
 South Korea is home to a population of 48m, 80% of the UK figure,
within an area of less than 50% of the UK.
 Almost 50% of the country’s population live within the Greater Seoul
Metropolitan Area, reflecting the central role the city has played in
South Korea's economic development.
 The very high density of housing (high rise) has made a major
contribution to Korea’s success in rolling out new telecommunications
infrastructures, through a reduced cost of deployment/head.
 The population is very IT-literate, due as a direct result of an active
government policy of public provision of IT training during the
economic downturn of the late 1990’s.
A UK Trade & Investment Mission to China and Korea
South Korea
Economic Development & International Trade
 Since the early 1960s, South Korea has achieved an incredible record
of growth and integration into the high-tech modern world economy.
 Today Korea’s GDP per capita is two thirds that of the UK and is
reported as being the 10th largest economy in the world.
 This success through the late 1980s was achieved by a system of
close government / business ties, including directed credit, import
restrictions, sponsorship of specific industries, and a strong labour
effort.
 In 2005 total exports measured $228bn, with 22% of exports destined
for China, and 15% to the USA.
A UK Trade & Investment Mission to China and Korea
South Korea
Significance of ICT to the Korean Economy (1)
 Some 45% of Korea’s exports today are ICT-based, and the bulk of
export growth is ICT related, with this sector continuing to show high
growth year on year.
 In January 2007, Korea’s Ministry of Information and Communication
(MIC) reported that Korea had shipped a total of $113 billion worth of
ICT goods overseas in 2006, up 10.8% from the previous year.
 IT imports in 2006 grew 9.1% year-on-year to $58 billion, bringing
Korea’s trade surplus in the IT sector to a record high of $54 billion. The
exports of IT products in 2006 were mainly driven by semiconductors,
digital TVs and flat panels.
A UK Trade & Investment Mission to China and Korea
South Korea
Significance of ICT to the Korean Economy (2)
 Investment in Research and Development, has shifted towards and
increased proportion of “R” rather than “D”.
 Korean companies recognised that they needed to compete against
the US and Europe for high technology development rather than
against China for low cost manufacture.
 This is the case, particularly within the ICT-related companies, such
as LG and Samsung, both of whom are now amongst the world
industry leaders in several of their fields of activity, including mobile
communications.