F REIGN TRADE - 中国国际贸易促进委员会

ELECTRONICSFoxconn builds Chinese mainland headquarters in ShanghaiXinhua reported on May 10 that the Foxconn TechnologyGroup, a main supplier of electronic components forApple, started construction on its Chinese mainland headquartersin Shanghai.The headquarters, located in the Lujiazui financial district,will function as a research and development center andfacilitate the company’ step toward a new business model,Gou said, adding that the company also plans to set up an e-business center in Shanghai’ Minhang district.Foxconn is the world’ largest maker of computer componentsand is responsible for assembling products for Apple,Sony and Nokia.Comment The construction of the headquartersrepresents a shift for the company, asit will focus more on the domestic market and lesson exports.ZTE sets its sights on EuropeAccording to China Daily on May 1, ZTE Corp plans tostrengthen its position in the European market in thefields of telecom infrastructure, smart phones and governmentand enterprise solutions, according to company officials.Since being established in China’s southern coastal city-Shenzhen in 1985, ZTE has grown into a telecom-hardwaregiant, the fourth-largest mobile phone maker by shipmentsand fifth-largest telecom equipment maker by sales - competingwith the likes of Sweden’s Telefon AB L.M. Ericsson andParis-based Alcatel-Lucent.Because of a global decline in telecom carrier spendingon network construction, ZTE diversified its core businessesin recent years to explore new markets, such as mobile phonesand enterprise IT solutions.Last year, its overseas revenue was nearly RMB 47 billion(US$7.5 billion), 54.2 percent of its total revenue. TheEuropean and North American market grew the most lastyear, 42.2 percent year-on-year to RMB 20.45 billion.With nearly one-fourth of its revenue coming from Europeand the US, it has become increasingly dependent on thegrowth there, Dai Shu, director of corporate branding andcommunications at ZTE, said.“ZTE aims for a steady increase in market share in Europeancountries,” Dai said. The European market is matureand well-regulated. Meanwhile, many European-based telecomoperators, such as Telefonica and France Telecom, conductbusiness globally, and may introduce extensive businessopportunities for ZTE.“Since European-based telecom carriers combined occupymore than half of the world’s telecom network market,ZTE will benefit in the short and long run from cooperationwith those multinational operators,” Dai said.As early as 2000, ZTE had set up offices in various Europeancountries. However, they didn’t really take off until2006 to 2007, when it finally won the trust of the major Europeantelecom carriers.ZTE employs around 1,000 people in Europe, more than60 percent of whom are citizens of the countries where they work.ZTE’s telecom system equipment has been imple-mented by nine of Europe’s top 10 operators, according to its2011 financial report. The company is also seeking to providetelecom operation services to European customers, said HeShiyou, ZTE’s executive vice-president, at the company’s annualanalyst conference in Shenzhen last month.But ZTE’s most notable business in Europe remainsin consumer devices. It was the world’s fourth mobile phonevendor in the fourth quarter last year, shipping 18.9 millionunits, according to research firm Gartner Inc.It could be shipping 100 million smart phones a yearby 2015, according to Reuters. Europe will be a major targetmarket for its mid-level to high-end smart phones as it triesto reverse a decline in its gross profit margin, He said.“We’ll do more promotions for our mobile phones in Europethis year,” Dai said. ZTE is boosting advertising becausemany European consumers still know little about the company.By cooperating with local carriers, it has securedabout a 10 percent share of the mobile phone market inmany European countries. Sales of the Blade 880, a ZTEentry-level smartphone, have approached 10 million unitsworldwide since it debuted in the United Kingdom in late2010.ZTE’s third focal point in Europe is said to be the governmentand enterprise businesses, specifically, in telecommunicationand IT solutions to clients from governments andthe energy, transportation and education industries.Xu Ming, ZTE vice-president, said the company isaiming for more than US$6 billion in government and enterprisebusiness sales by 2015, up from $1.6 billon last year.Overseas markets are likely to contribute more than 60 percentof its total government and enterprise business sales by2015, he added.Comment The construction of the headquartersrepresents a shift for the company, asit will focus more on the domestic market and lesson exports.39