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Mainland told to make own brands

Haier

The mainland has to roll out its own brands rather than merely act as the world's processing agent if it wants to become the largest developed economy, says Hang Seng Bank.

In its latest monthly publication the bank said the mainland, the world's largest processing export centre of consumer products, could not rely on the sector for long-term sustained growth because of its massive population.

'China's future lies in being the world's largest developed economy with the world's largest consumer market,' it said.

It would have to 'build up its brand products with its indigenous technology and raw resources' and tap domestic demand to sustain growth. The mainland - tipped to become the 'global manufacturing power house' - has been absorbing foreign technologies as foreign investment flows into its manufacturing and processing sectors.

Some domestic brand names, especially those for household appliances, have appeared with leverage from acquired foreign technologies. A few home-grown brands such as Haier Group and TCL International Holdings have been trying to make inroads into overseas markets.

Haier chairman Zhang Ruimin has said the mainland could not afford to be content with being the global manufacturing power house and should build its own brands if it wanted to boost its 'national strength'.

Export processing industries, mostly foreign-invested, have played a key role in the mainland's modernisation and accounted for 55 per cent of its exports last year.

Foreign investors have been employing mainland factories to manufacture original equipment or to set up their own plants to take advantage of the country's low labour costs.

Foreign direct investment in the mainland's manufacturing industries exceeded US$100 billion between 1997 and 2000, accounting for 60 per cent of the country's total inward foreign investment, Hang Seng Bank said.

It predicted China, which accounts for over 5 per cent of the world's manufacturing exports, would this year overtake France as the world's fourth-largest manufacturing exporter.

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