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Technology Takes Off in China

by William J. McEwen, PhD
Author of Married to the Brand

Tremendous growth in products that reflect "high-tech" lifestyle

As countries march toward modernization, the growth in ownership of various "labor-saving" consumer goods becomes a key signal of societal development. Such goods include the major durables that manufacturers commonly refer to as "white goods" (refrigerators, washers, and dryers) as well as certain other household appliances that appear to define a modern lifestyle (vacuum cleaners, for example).

These fairly standard modernization trends can certainly be seen in China over the last decade of Gallup's polling in that country. Yet, in examining the changes that have taken place, it's apparent that some products are rapidly sprinting while others are merely strolling along. The "sprinters" are products that appear to promise more than just an easing of effort -- those in the more "cutting-edge," higher-technology categories. These products represent -- and perhaps symbolize -- the new millennium, replete with the promise and prospect of tomorrow's technology. 

While China's formidable capabilities in technology production are well-recognized, it's now equally clear the Chinese have an as-yet-unslaked thirst for the technology their country is producing. The world/export markets and China's biggest cities (Beijing, Shanghai) are not the only entities with an apparent need and desire for the advanced consumer electronics China is aiming to produce. The entire nation is embracing what amounts to a great leap forward into technology.

Modern Technology Is on the Rise in China

Consider the increase in the percentage of households owning refrigerators, which crept up from 39% in 1999 to 41% in 2004. Growth in clothes washer ownership is also up slightly from 51% in 1999 to 54% in 2004, and vacuum cleaners are now in 8% of homes versus 5% in 1999.

But contrast that slow-and-steady growth with the apparent jump in DVD/VCD (video compact disc) ownership, which rocketed from 26% to 52% in the same span. Ownership of stereo systems and home theaters more than doubled in prevalence from 12% to 26%, and microwave oven ownership grew from 6% to 18%. And, since 1999, computer ownership has more than tripled from 4% to 13%. Computers are now found in more Chinese homes than are vacuum cleaners. 

As reported earlier, access to (and use of) the Internet has virtually exploded to the point which China is on its way to becoming the world's largest Internet community (see "Internet Use: Behind "The Great Firewall of China" in Related Items). These explosions are being felt not just in the world of computers, but wherever new technologies promise large advantages -- in image as well as performance -- over more traditional technologies.

For example, there has been no growth in ownership of still/film cameras in the past five years; ownership has remained at 24%. Instead, ownership of video cameras has grown slightly from 3% to 5%, and 4% of the population now owns digital cameras. These products have emerged, admittedly from a low starting base, and now appear poised for real growth. About 1 in 10 Chinese consumers say they plan to buy a video camera (10%) or digital camera (9%) in the next two years, while 7% of Chinese intend to purchase a still/film camera (an apparent decline from the 14% who were planning to buy still cameras back in 1999). In China, it appears the digital world may be bypassing the analog world.

There is a seemingly similar trend in the area of telecommunications, where penetration of in-home, fixed-line telephones grew from 39% in 1999 to 63% in 2004. But an even more impressive growth rate is evident for mobile phone ownership, which has leaped from only 10% in 1999 to 48% in 2004. Almost half of Chinese now own mobile phones. And more consumers now plan to buy a mobile phone (24%) than report planning to buy a fixed-line phone (21%).

The promise of tomorrow's technology isn't merely a promise. In China, it's an apparent reality, and a clearly desirable one at that. China may well value its traditions, but its march into the new millennium is anything but traditional. The real signs of modernization in today's China are less likely to be clothes washers and vacuum cleaners, and far more likely to be mobile phones and computers.


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