China Tops the United States in IT Exports, Says OECD

Published: January 17, 2006

by Timothy Prickett Morgan

A chilling but not unexpected statistic has just emerged from a report the Organization for Economic Cooperation and Development: China was in 2004 the biggest exporter of information technology, surpassing the United States for the first time.

IBM's sale of its PC business to Lenovo Group last year certainly helped buoy the Chinese market for computers and communications in the 2005 data, but the OECD, which is a Paris-based organization of the biggest economies in the world that was founded over 40 years ago, indicates that the sale to Lenovo will not hardly register in the growth the Chinese manufacturers of IT gear will see in 2005.

According to the report, China exported $180 billion in information and communication technology (ICT) in 2004, growing by 46 percent, compared to the United States, which had $149 billion in exports and only 12 percent growth. When imports and exports are added together, China's share of the worldwide ICT market came to $329 billion in 2004, up 41 percent. The United States saw its combined ICT gear (imports and exports together) rise by 25 percent to $375 billion. While the OECD didn't do the math, the U.S. had increased its ICT imports by a lot: in fact, IT imports were up 38 percent to $226 billion. The OECD says that Asian manufacturers of ICT products are sourcing more and more of their components from regional suppliers instead of European and U.S. suppliers. Moreover, China has an ICT trade surplus of $34 billion with the U.S. and $27 billion with the members of the European Union. The OECD data shows that the Chinese missed the dot-com bubble, but that country may be working on its own version of that bubble right now. China's exports of ICT gear in 2004 almost match the peak exports for the U.S. in 2000, in fact, and the linear growth the Chinese market is seeing between 2001 and 2004 doesn't seem to be slackening at all. If present conditions persist (and I can read a graph) imports of Chinese ICT gear could hit $200 billion in 2005 and exports could surpass $250 billion.

It is amazing to note that China's total ICT market (imports plus exports) was a mere $35 billion in 1996, which is when the U.S. had a market that was over six times larger at $230 billion.