Research On China's ICs International Trade

According to the United Nations Commodity Trade Statistics Database (UNCTSD), China has a huge trading deficit in Electronic integrated circuits and microassemblies (numbered 8542 in HS1996), commonly named as IC. Soaring to $ 67,600,663,854 in 2005, deficit on ICs was 17% greater than all the importing value of goods numbered 26, 27 and 73 in HS and SITC~i to China. This number was even bigger in 2004, 2003 and 2002, that was 23%, 99%, and 95% respectively.Recently, wide concerns have been given to the large deficit brought by importing raw materials like iron or steel and oils, contrary to IC products. The argumentation and research on China's IC focus on the whole industry's macro economy or governmental policies, such as CCID Consulting Group, a market research house of the CCID, Consulting Group on Building China into a Great Power in Micro-Electronics Technology, and so on. Some focus on technical issues like Electronics and Packaging, Microelectronics, Semiconductor Technology, Power Electronics, and the like. All of them, however, fail to address the attention to export and import situations.Actually, IC industry has become the heart of the world high-tech electrical products. It's essential to the information economics. Experts had announced that each dollar of IC production would create an electronic product valued about ten dollars and one hundred of national economic growth. It is a key part of a healthy information technology ecosystem - it supports everything from research and development to a robust university capability in microelectronics. Modern economic development statistics shows that each 1% change in IC revenue drives a 10% change in electronics revenue and 100% change in real GDP growth in the same direction. It is so important to the development of information industry and national economy that some analysts compared IC products to money machine. Others even regarded it as a symbol that a country entered to the information society if its total value brought by semiconductor industry divided by GNP was above 0.5%, claiming the country could take precedence in the future global competition on the condition that it could control the microelectronic technology.According to the statistics, Chinese IC market has surpassed the United States and Japan in 2005 to rank No.1 globally for the first time, reaching from a market size of 32.1% share in 2004 to 37% in 2005. In this March, Intel, the global semiconductor giant, announced to invest $ 2.5 billions to establish a factory in Dalian. The new-plant will adopt the world's most advanced 300mm wafer precaution technology. This is its biggest investment outside of the United States. Once the plant is completed, Dalian will become Asia's largest IC chip production base. Meanwhile, another American semiconductor factory, Micron, has built up a Packaging & Testing factory in Xi'an high-tech zone, amounting to $250 millions. Due to the tremendous market, more and more global companies are planning to build their own factories in China, which shall update and boom the whole industry.The rapid development of China's IC industry had tensed up the American administration. For example, in February of 2002, U.S. General Accounting Office (GAO) submitted a report to the Congress named Export Restriction: America Starves for Basically Political Reporting on China's High Developing Semiconductor Industry. The authors of the report minced no words, such as current developments are "alarming" and "deleterious" to U.S. interests; the "security and economic well-being" of the United States are at risk.Unfortunately, the gap between Chinese IC industry and developed countries' is becoming wider, as a result of which may threaten the national economy even national security.Above all these reasons, the study of total situation of import and export of IC products, together with the analysis of trade resources and markets, the international competitiveness and trade mode, will conduce to keeping and promoting the international competitiveness of IC industry in China, and hoping this assay can attract all patriots' attention to promote the national IC industry.