September 14, Chinese telecommunications equipment maker Huawei Technologies Co. Ltd. is planning to build or buy a plant to make mobile phones and tablets in Brazil, as it seeks to capture the latest shift in sales, according to the chief executive of its local unit.
The company is looking at owning its own facilities because of the complexities of operating in Brazil, in particular for tax reasons, Li Ke, chief executive of Huawei Brasil, was quoted as saying in media reports.
The company initially planned to use third-party manufacturers such as Flextronics International Ltd. and Foxconn International Holdings Ltd. (2038.HK) to manufacture the products, according to the reports.
Huawei's first mobile phone produced in Brazil has just rolled off the line at a local Flextronics plant, and the first tablet will be made in the first half of 2012, Li Ke said.
Infrastructure now accounts for about 75% of Huawei's total sales in Brazil, and are expected to total more than $1.8 billion this year, while the other 25% of sales come from mobile phones and terminals, Li Ke said.
Future growth will depend on sales of mobile phones and terminals, which are expected to grow 80% this year, while infrastructure products will grow at about 10% year-on-year, he said.
Rival ZTE
Rvial Chinese telecommunications hardware and mobile-device maker ZTE Corp. (0763.HK) announced in July that it had reached an agreement with Brazilian local enterprises to produce tablet computers in the country.
Hou Weigui, president of ZTE, said at the time that ZTE was planning to expand in Brazil with its own manufacturing plant and possibly the installation of broadband internet networks.
ZTE's operating revenue was RMB 70.3 billion in 2010.
China’s Market Economy
Brazil is preparing to recognize China's status as a market economy from 2016, the Chile-based America Economia reported on Monday, citing comments made in an exclusive interview with the magazine by Brazil's foreign trade secretary Tatiana Prazeres.
Such recognition, which the Chinese government has been seeking for many years, will enrich the bilateral strategic partnership and boost trade and economic cooperation between the 2 countries, analysts remarked.
China's non-market economy status puts it at a serious disadvantage in anti-dumping investigations.
It means other countries can use prices of third-country markets as a benchmark to compare with domestic prices in determining whether Chinese products have been dumped or not.
Brazil has implemented 81 anti-dumping duties and almost half of those are on Chinese products, the report said.
So far, more than 10 countries including New Zealand and Singapore have granted market economy status to China, while discussions are still underway with the U.S. and European Union countries.
In a speech on Wednesday at a meeting of global leaders at the World Economic Forum in Dalian, Chinese Premier Wen Jiabao said China would increase its investment in the EU, but European leaders should recognize the country’s market economy status.
Source:Cyrus LAO