Dr. K.B. Chan Chairman and Managing Director Surface Mount Technology Ltd. November 21, 2005 - PowerPoint PPT Presentation

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Dr. K.B. Chan Chairman and Managing Director Surface Mount Technology Ltd. November 21, 2005 PowerPoint Presentation
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Dr. K.B. Chan Chairman and Managing Director Surface Mount Technology Ltd. November 21, 2005

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Dr. K.B. Chan Chairman and Managing Director Surface Mount Technology Ltd. November 21, 2005
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Dr. K.B. Chan Chairman and Managing Director Surface Mount Technology Ltd. November 21, 2005

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  1. Springboarding Technology for Commercial Success Dr. K.B. Chan Chairman and Managing Director Surface Mount Technology Ltd. November 21, 2005

  2. China’s growth & major economic zones Opportunities - Automotive and electronics Partnership with Hong Kong Summary Content

  3. Major Economic Zones Growth 2005>9% 05/10 > 7.5% Bohai Economic Zone 7+2 CHINA Yangtze River Delta (YRD) 6+1 Pan-Pearl River Delta (PPRD) 9+2

  4. Strength of EconomicZones 1 Total 2,054 95% 1,207 93% 1 Includes eastern China, *Includes China, Hong Kong and Macao Source: China Statistics Bureau, Hong Kong Census & Statistics Dept, Macau Statistics and Census Service

  5. Bohai Economic Zone – 7+2 • Diversified economy: • Political, culture, R&D center - Beijing • Export, manufacturing base - Tianjin • Major industries/sectors: • Heavy industry, machineries, steel, military • Central Government designates as Third Wave

  6. Yangtze River Delta – 6+2 • Industry and investment-oriented: • Shanghai as the regional leader – banking and finance, industrial manufacturing, tourism • becoming more internationalized • Major industries: • Very diversified • Automotive & auto parts, electronics equipment and parts, textile, chemicals,

  7. Pan-Pearl River Delta – 9+2 • Export-oriented: • external trade of Guangdong accounts for over 30% of China’s total • large numbers of foreign-invested manufacturers in Guangdong, with a high concentration of Hong Kong-invested companies> 60,000 • Major industries/sectors: • consumer goods, light Industries, petrochemical, • > 40% are electronic related

  8. Opportunities : Automotive & Electronics Industry

  9. China is Factory of the World Advantage – Low cost & huge domestic market Electronics market – forecast by 2007 300 Billion US$ 20% of world output Growth rate 12%, double of world’s Largest market – hand set, DVD, TV, Top 5 – PC, home appliance, Electronics Production in China Source: isuppli, 03/2004

  10. Electronic is major industry, highest growth Electronics Output in MajorEconomic Zones 40% of PPRD GDP,Over 80% from Guangdong Source: China’s Electronic Information Industry Yearbook

  11. EMS in China to Increase Source: iSuppli, June 2003

  12. 2004World Ranking 4th largest producer 3rd largest market Automotive Industry in China 2003 Sales > 100 Billions US$ ; Vehicle Output (Units) Started > 200 thousand > 3 million > 5 million 1953 1971 1980 2000 2002 2003 2004 > 100 thousand > 2 million > 4 million Vehicle Sales (Million Units) 2005-2010 CAGR 16% Source: State Information Center – China Economic Information Network

  13. Automotive Electronics in China 2000 - 2010 CAGR >30% Source: FOURIN China Auto Weekly

  14. Automotive Output – could exceed 10 M vehicles by 2010 Automotive Components–over 30% growth Share of automotive electronic components in a car will increase from 10% to 30% by value Foreign/ JV auto makers to procure local low-cost and high quality parts and components Domestic brands increase from 25% to over 50% Trend in China’s Automotive Components Industry

  15. Partnership with Hong Kong The Advantages

  16. Major economic engine of the Pan-Pearl River Delta, finance and service center Over 40% of China’s Foreign Direct Investment - FDI is from Hong Kong HK companies operate more than 60,000 factories in Southern China - employing > 10 million workers 40% of HK Manufacturing GDP is electronics Position of Hong Kong Source: Hong Kong Trade Development Council

  17. Advantages of Hong Kong • Cosmopolitan city – large number of foreign company • Excellent infra-structure, transportation, telecom • Sound legal and tax system, center for arbitration • Mature equity market • Efficient government with no corruption • Easy communication, English, Chinese • Risk Management • IP Rights protection • Currency management - RMB

  18. HK - R&D – Technology Developments • Administer under ITC – Innovation & Technology Commission – Funding ~ 4Billion HK$ • 8 Universities • Establish 5 R&D centers from 2006 • Auto parts, logistics, textile, nano tech, IT & telecom • ASTRI – Apply Science and Technology Institute • HKScience & Technology Park – IC design, photonics • Cyber Port – Digital entertainment • HK Productivity Center

  19. Guangdong/HK Technology Co-operation Funding Scheme • Joint funding efforts between the 2 Government to support R&D projects • 2004> US$ 40 m in 6 areas • RFID , Auto-parts, elctronics & IT, energy tech • new materials, precision equipments • 2005> US$ 67 m in 6 areas • communication, medical & bio tech, new materials • green manufacturing, agriculture,

  20. HK Companies as Partners • Understand both International and Chinese cultures, acting as a bridge • Historic link with multinational companies, and foreign countries • Substantial business experience in China, know “what not to do” • Fast response • Strong business integrity

  21. Summary • The 3 major economics zones will be China’s economy growth engine > 90% • Pan Pearl River Delta – Super Economic Zone • Bohai Economic Zone is the Third Wave • Electronics and automotive will be the leading industries • Partnership with Hong Kong companies for outsourcing or entering the China market

  22. Thank You