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China's higher-end exports grow rapidly

(Financial Times)
Updated: 2006-07-04 14:18

Aside from labour, China has important cost advantages for its newer industries, including cheaper land and steel and, at the moment, little pressure to account for the real cost of environmental destruction.

But the growth in sales of high-end goods has not necessarily benefited Chinese companies, according to Mr Kroeber, who says foreign enterprises still control most exporters.

"Most domestic companies are still net importers of high-tech goods," he said.

One sector where China has promoted import substitution is shipbuilding, where it has leveraged the purchase of its first-contracts of liquefied natural gas to ensure the tankers carrying the resource from foreign fields are built in China.

Guangzhou Shipyard, which gained 60 per cent of revenues from exports in 2005 and has an order book lasting into 2009, says one of its attractions for customers is its flexibility in managing orders.

"We are more customer-oriented than Korean and Japanese shipyards," a spokesman said on Monday.

"We can design a variety of models to meet the specific requirement of our clients. In contrast, Japanese shipyards will stick to a fixed model."

Shipbuilding is considered a strategic industry because it provides an industrial platform for China's ambitions to become a major maritime power. The acquisition and development of many other technologies is similarly considered strategic by the government.

A spokesman for Guangzhou Shipyard said the company was "still lagging behind Japanese shipyards in technology and management".