"Just because China is experiencing unprecedented economic growth, it does not mean that it is an easy market to succeed in, especially without local knowledge and local contacts," said Annie Chung, principal analyst with Gartner, one of the most authoritative information technology market researchers in the world.

She pointed out that since more than 80 percent of the personal computer (PC) market share is controlled by domestic names, a foreign company must have the right local partner to penetrate the market effectively.

Government and education sectors are predicted to be the two fastest growing areas, but they are also among the most difficult areas for foreign brand penetration.

"Different levels of government in China have varying degrees of autonomy and local partnerships are likely to be the only way for foreign operators to fully understand this," she added.

Gartner forecast in a report named "China: PC Market Outlook 2003" released yesterday that PC market growth in the country will increase by 11 percent this year, compared with the 9 percent rate last year.

Shipments are expected to reach 10.31 million units from the 2002 figure of 9.29 million.

The computer market is to experience progress in both professional and private, as well as desktop and laptop markets.

The mobile PC segment is predicted to increase by 37 percent year-on-year, compared with last year's 40 percent rise.

Chung believes continuing domestic economic growth, government information technology spending and a maturing home PC market will be the three major driving forces to steady growth in China's PC market.

China achieved gross domestic product growth of 8 percent last year and is estimated to maintain a similar speed of 7 percent this year.

The execution of the School Link Project initiated by the Ministry of Education, which encourages primary and secondary schools to give students computing and Internet courses, will stimulate significant demand for computers, with financial aid set to come from the central government and other sources.

Gartner said in the report that the push to develop e-government would also stimulate demand.

The firm believes that, as the average salary of urban Chinese continues to grow, so will their desire for material things.

Chung pointed out that PCs were high on the list of "must haves" after such basics as TV sets, refrigerators, and washing machines.

(China Daily April 15, 2003)