China, U.S. Lead World Tech Products Market

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The Organization for Economic Cooperation and Development (OECD) released a report in December that showed U.S. information and communications technology (ICT) exports—including products such as laptops, mobile phones and digital cameras—totaled $149 billion, growing 12 percent since 2003. Great news, right? Well, sure, growth is always a good thing. However, when compared with China, which saw its ICT exports grow more than 46 percent between 2003 and 2004, totaling $180 billion in the latter year, it might not seem so outstanding.


This was the first year China surpassed the United States in the ICT exports. The European Union and Japan were ranked third and fourth in the category, respectively, each hovering around $125 billion. In terms of ICT imports, the United States leads the world, bringing in nearly $250 billion worth of information technology products, with the European Union a very close second. China, with approximately $150 billion in imported ICT products, was third and Japan took fourth with about $75 billion.


Although China’s growth is impressive, it doesn’t mean IT pros in the United States should start requesting “How to Speak Mandarin in Three Months” kits. For one, the OECD study did not include software, the primary profit generator in IT. In addition, the development of IT infrastructures and processes in China has been uneven, and many are well behind the times compared to more developed nations. Also, most of China’s main trading partners (Japan, Taiwan, South Korea and the United States) are geopolitical rivals, which could lead to an unstable customer base in the future.


In addition, if a country imports a great deal more than it exports, as is the case with the United States, it’s not necessarily a bad thing. In fact, it’s usually the sign of a strong economy. This situation often points to significant levels of consumer and corporate purchasing power as well as a robust currency. The inverse of that—large amounts of exports, small amounts of imports—is not always a good thing. For example, during the Great Depression of the 1930s, the United States exported much more than it imported and ran a trade surplus with most countries.


What the numbers do demonstrate is China’s rise in IT output and overall economy. The numbers are quite staggering—according to the OECD report, China’s total share of world trade in the ICT goods market (both imports and exports) rose to $329 billion in 2004, up from $35 billion in 1996. That’s nearly a tenfold increase in less than a decade. The reality current and future generations need to understand is that China has become a front-rank power in the world and a top player in technology.

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