The mobile telecom branch of Siemens will invest US$60 million in its Shanghai base to increase production capacity from 10 million to 14 million mobile phones a year by the end of 2002.

Another US$250 million will be poured into research institutes in Beijing, Shanghai and Singapore, according to Lothar Pauly, board member of the Information and Communication Mobile Group with Siemens.

The German firm plans to invest a total of US$1.5 billion in the Asia Pacific market before 2003, of which US$1 billion will be spent in China.

Siemens is presently No 3 in China's mobile handset market after Finland's Nokia and Motorola from the US.

"We will soon become No 2 in the Chinese market as well as other countries in the Asia Pacific region,'' he said.

The mobile communication market in Asia is booming, with an annual growth rate of more than 30 percent. The growth in China is even more significant, with subscriber number doubling last year, a trend likely be repeated in the coming years.

Because of a telecom market slowdown in Europe and America, Asia, especially China, has become a top region for international telecom giants.

Nokia, Ericsson and Motorola have all focused attention in the area. Another appliances giant, Philips, even announced recently that it would cease independent manufacture of mobile handsets and transfer all technology and equipment making to its Chinese partner.

"If anyone wants to have a foothold in the international market, he must be involved in the Chinese market first,'' said Pauly.

Siemens' Shanghai factory is the company's only overseas mobile phone production base. It will soon not only satisfy domestic demand, but also export to the Asia Pacific region and European countries, Pauly revealed.

Besides currently used GSM technology, or the global system for mobile communications, Siemens has linked up with China's Datang Telecom for the development of next generation, or 3G, mobile communications.

Three groups that represent three different technologies are now competing for China's 3G market: European companies, US and South Korean companies and China's Datang and Siemens.

The government has not yet decided which technology it will adopt, but Siemens is confident the home-grown technology, TD-SCDMA (time division synchronous code division multiple access), will be used.

(China Daily 07/05/2001)