A fierce price war among China's flat screen television producers has seen prices drop by 30 percent in the first nine months.

 

Lu Renbo, an expert with the Research and Development Center of the State Council, said his research showed prices of Chinese LCD sets had declined markedly, and those of plasma screen sets also fell this year.

 

Lu said the price war would squeeze the profits of the whole industry, making the competition all the more intense.

 

Profits for TV producers have shrunk significantly this year, with the cheapest price for LCD sets sliding to 4,999 yuan in Beijing.

 

Lu's research showed demand for flat screen TV sets was rocketing, with 300 million sold by August, and demand for the year expected to exceed 500 million.

 

"Competent enterprises beat rivals with innovative technologies and reliable quality, rather than irrational price cutting. Price wars are not sensible," said An Yongcheng, a senior engineer with the State Television Quality Inspection Center.

 

Lu expected eight of the 15 active brands in the market to survive the fierce competition. The eight brands include five domestic and three foreign producers, which account for a combined market share of 65 percent.

 

He believed the eight brands would continue to dominate sales, with smaller brands fighting for survival.

 

(Xinhua News Agency September 27, 2006)