China's Tech Companies Surge Forward

Filed in archive Studies on December 11, 2006

According to the blog, ChinaChallenges, China's technology companies are gaining ground on their foreign rivals in terms of size and efficiency and are making the move from low price to high price product segments. These results were completed in a survey by McKinsey & Co and the prestigious Beijing-based Tsinghua University.

The survey, which covered around 39,000 companies in China across a broad range of tech sectors, found that improving processes mean firms no longer rely on cheap labor for a competitive edge, the Wall Street Journal reported. Among tech companies generating at least US$1.25 billion per year in revenues, those in the private sector posted an average of US$53,700 in revenue per worker in 2005, up from US$28,800 in 2001. Foreign tech firms operating in China averaged US$56,000 per worker in 2005, down from US$63,900 in 2001. Total revenues generated by Chinese tech companies hit US$700 billion in 2005, up from US$250 billion in 2001, and their share of export sales rose to 43% from 32%.

China's TV advertising market revenues surge as Olympics budgets gain traction.

The annual CCTV auction is a big event in China, drawing tremendous attention from everyone from economists to entrepreneurs. Bolstered by $119 million of advertising money for Olympic programs next year, it's a clear signal where the upcoming business opportunities are. Lenovo, the computer maker spent, $20.5 million for the right to use its name on an Olympic count-down clock. Bank of China has also allocated nearly $16.2 million for other Olympics-related advertising.

CCTV is a state-owned station with 15 nationwide channels, covering about 95% of the 1.3 billion population. It has about a one third market share for audience and advertising revenue.