In an evaluating report released on Friday by the Chinese Ministry of Commerce, China's IT products exports reached 15 percent of the world's total last year.

The report, concerning the international competitiveness of China's IT industry, was submitted at a seminar on the sideline of the ninth China International Fair for Investment and Trade.

It says the export of China's information technology products exceeded US$200 billion in 2004, making it the second largest IT industry power only after the United States.

As a matter of fact, China keeps accomplishing such "missions impossible" one after another in various fields after its entry into the World Trade Organization (WTO) in 2001.

It miraculously managed to double its export during the three years as a WTO member, which is exclaimed as the "China miracle" by many foreign economists.

Yet some experts say that behind the myths, China, which is stepping into the post-interim after being a WTO rookie, will have to face more serious difficulties and challenges.

Actually the Friday report also points out that though China's IT industry is proud of its rapid growth rate, the core technologies are not mastered by the local manufacturers. And though the scale of the industry keeps expanding, the majority of the profits have gone to transnational firms.

According to China's Assistant Minister of Commerce Chen Jian, despite the fact that quite a number of Chinese corporations like Sinopec and Haier have already involved themselves into the international market, and the fact that 15 companies in China's mainland were listed as the world top 500 by Fortune, China's ranking on the annual report issued by IMD World Competitiveness Center dropped from 24th to 31st last year.

At the same time, stepping into the post-interim, China may loosen or even cancel the government's interference in some fields, in addition to the demands to further open China's domestic market from the new round of WTO negotiations and the frequent trade friction. The official said, "China's domestic companies will face more challenges."

Almost all these challenges can be ascribed to the lack of international competitiveness of the domestic industries, said Feng Fei, director of the State Council Development Research Center's industrial economic research department.

That is to say, most Chinese industries lack the capabilities to durably produce more fortune, including goods, technology and service, than their counterparts in other countries.

Currently, China's international competitiveness primarily concentrates on labor-intensive industries like clothing, toy making, electronic components and raw materials supply, and is only advantageous in hardware making when referring to the high-tech field.

"Generally speaking, China is losing its advantages in primary products whereas it has not occupied an advantageous position in products of higher levels, and this directly affects the nation's overall international competitiveness," Feng said.

Fully aware of the plight and essence of the problem, the Chinese government has already put onto its agenda the task of guiding all the industries to upgrade their international competitiveness.

China launched an industry international competitiveness investigation and evaluation program at the end of 2003, said Wang Qinhua, director of the Bureau of Industry Injury Investigation of the Ministry of Commerce.

The auto industry is the first one to receive the evaluation.

Wang said the newly released report on the IT industry is based on the information and data concerning the industry's environment competitiveness, display competitiveness, corporate competitiveness and product competitiveness, which are collected through interviews, research and questionnaires.

"It helps the companies know their status-quo and have more ideas about their competitors, which is significant to their policy making."

In the meantime, China's legislators are in full swing discussing the industry competitiveness investigation mechanism so that it will exist in the form of laws or regulations in the near future.

The Ministry of Commerce is also playing an active role in making the regulations on the ground of the principles of Laws of Foreign Trade, which were amended last July after learning from foreign experiences.

In order to improve the international competitiveness of all its industries, China is trying hard to cast off its low-end position in the world manufacturing sector and is making efforts to upgrade from importing and improving technologies to originating its own.

Feng said the world is currently in the process of the third economic globalization, during which the internationalization of technological development will become a new trend.

"Many transnational firms are establishing their technology research and development centers in China, but it is just the beginning."

The expert suggests that the Chinese government should continuously increase its investment in intellectual property rights protection and the training of scientific specialists, because "in return, this will bring us more original and high level technologies."

(Xinhua News Agency September 10, 2005)