China surpasses the U.S. as the world's largest PC market
China is now the world’s largest personal computer market, having shipped 18.5 million PCs last quarter compared with 17.7 million in the U.S., reports the Wall Street Journal.
This shift reflects China’s rising stronghold on the tech market—and its increasing appeal to manufacturers of high-tech goods:
“Growth in China's computer market is likely to lead foreign PC makers to continue increasing their investments in the country. It could also lead them to seek tie-ups with Chinese companies, as Taiwan's Acer Inc. did last year when it paid Chinese PC vendor Founder Technology Group Corp. up to $70 million to use the Founder brand in China for seven years."
This is bad news for American manufacturers and our economy. As former head of Intel Andy Grove recently explained to MIT’s Technology Review, America’s depleted tech base is contributing to the jobs crisis, and is hindering our ability to innovate:
In the 1970s, the U.S. computer industry had 150,000 workers. This became two million at its peak but now is back to 150,000. Meanwhile, computers went from a $20 billion to a $200 billion industry.
“Most of [factory] jobs still exist—just not here. You can correlate what happened in the U.S. completely to the rise of contract manufacturing [in which a company like Apple designs a product and hands off the production to another company]. One company accounts for 1.1 million computer manufacturing jobs—China's Foxconn.”
What else is contributing to China’s rise as a tech superpower? For one thing, Chinese manufacturers benefit from the nation’s grossly undervalued currency and illegally subsidized exports, which put tech markets in countries like the U.S. at a severe disadvantage. Until China revalues its currency and starts competing on a level playing field with the rest of the world, it’s unlikely that the Chinese tech boom will slow down.
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