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Christine Chan

OCEAN Information Holdings has joined state-run Aihua Electronics of Shenzhen in a joint venture aiming to open up China's personal-computer market.

  Aihua Ocean Computer Technologies Co (Shenzhen), owned 60 per cent by Ocean and 40 per cent by Aihua, will develop, produce and distribute computers and related products on the mainland.

  Total investment is put at $40 million. Neither partner would specify details of the investment allocation, but said some might be earmarked for development of communications equipment and engineering systems.

  Speaking at yesterday's contract-signing ceremony, Ocean chairman and chief executive Eddy Tsang Man-chung said Ocean would give technical support to the venture, using Aihua's distribution network.

  Aihua is a subsidiary of China Great Wall Computer Group, headed by Mr Wang Zhi, the son of Chinese Vice-President Wang Zhen.

  Under the management of the Ministry of Mechanics and Electronics Industry, which in turn is controlled by the State Council, Aihua produces 50 million personal computers a year.

  Mr Tsang said Aihua could provide the company with instant access to the huge China market.

  ''Aihua started in computers in just the past few years, but it has a strong distribution network of communication products and electrical appliances throughout the country,'' he said.

  Aihua general manager Tang Hongfu says demand for personal computers in China is about 120,000 units a year, and growing at 20 per cent a year.

  Great Wall's Mr Wang said the price-cutting campaign among the world's computer manufacturers could force some to head for China.

  ''The setting up of joint ventures is now very common for foreign computer firms to establish a production base in China as well as to gain access to the mainland market,'' he said.

  Initial planned annual production of the Shenzhen-based joint venture will be 200,000 motherboards, 160,000 add-on cards, 50,000 microcomputer systems and 50,000 communications units.

  Production initially will take place at Ocean's plant at Shajin, Guangdong, with 30 per cent of the products to be sold on the mainland.

  Meanwhile, Mr Tsang said plans were in the pipeline to establish a presence in the Japanese computer market, considered a difficult market for outsiders.

  Negotiations have taken place with a Japanese firm to set up a joint-venture distribution company in Japan.



Ocean joins venture to open mainland computer market