The Ministry of Information Industry (MII) announced Wednesday that it will encourage more telecom-related enterprises to seek international expansion by rolling out more preferential policies this year.

"We are now teaming up with related government sectors to hammer out more stimulative policies this year," said Wang Xudong, minister of the MII.

Those policies will be mainly in the areas of bank loans, credit insurance and international settlement, he said yesterday at the ministry's working conference in Beijing.

"We should take the advantage of both the domestic and international market as going international is one of key strategies for us to enhance our competitiveness," Wang said.

As a matter of fact, seeking overseas expansion has already become a trend for a domestic company to become really competitive.

"This is a good news for us as we are to enhance our international expansion in the following years," said Fu Jun, spokesman of Huawei Technologies, via a telephone interview.

As a leading domestic telecoms equipment provider, Huawei has established a total of six regional headquarters and 32 subsidiaries in regions such as the Middle East, Asia-Pacific, South Africa, Latin America and Europe.

Company figures show that it accomplished overseas sales of US$2.28 billion, up 117 percent from the previous year.

The company is aimed at signing up overseas sales of US$10 billion in 2008.

After years of expansion, Huawei is now regarded as a strong competitor to other telecoms giants such as Lucent, Nortel Networks and Motorola.

Ningbo Bird Co Ltd, one of the leading Chinese handset makers, is also among a handful of Chinese firms that have turned to the international market to escape strong domestic competition.

Xu Lihua, president of Bird Co said in a recent interview that the company is to enhance its concentration on overseas markets such as Russia, the Commonwealth of Independent States, east Europe, India and southeast Asian countries this year.

Company figures showed that it sold 3 million handsets in the overseas market last year. It is expected to sell 6 million this year and more than 10 million in 2006.

"The expansion in the overseas market will help us to maintain our leading role in the domestic market," Xu said.

"It is the right time for the enterprises to seek overseas expansion to escape domestic competition," said Chen Jinqiao, director of the China Academy of Telecommunications Research of the MII.

Meanwhile, the domestic firms should invest more in technology innovations and research and development.

In fact, to further boost domestic enterprises overseas expansion, the Ministry of Finance and the State Administration of Taxation announced in December that the government is to raise tax rebate on 14 categories of IT products from previously 13 percent to 17 percent.

The categories include integrated circuits, telecoms equipment accessories, routers, LCDs (Liquid Crystal Displays), wireless handsets and mobile telecommunications base stations.

(China Daily January 13, 2005)