This suggests that we should expect Chinese firms to enter at the bottom end of the global market for mass consumer goods, initially mainly in the developing world – of which there is already clear evidence [538] – but later moving into the developed world. It will take time for firms like Chery and Geely to establish themselves in Western markets, where standards and tastes are very different from the ‘cheap-end’ advantage presently enjoyed by Chinese firms. Indeed, both have postponed their American launch dates until around 2009 or later. A cautionary tale in this respect is provided by TCL, the Chinese TV manufacturer, which entered into a joint European venture with the French firm Thomson. It made a number of serious miscalculations based on its ignorance of the European market and announced in 2006 that it would close its European operations. [539] But TCL is an exception: Chinese electrical appliance firms have overwhelmingly chosen to establish their overseas manufacturing subsidiaries in developing rather than developed countries. There is a certain parallel, in this context, between Chinese firms initially targeting the developing world and the earlier experience of Japan and Korea. Japanese companies, for example, first dominated the then relatively poor local East Asian markets and only later began to make serious inroads into Western markets. In Europe and the United States, furthermore, both Japan and South Korea started at the cheap end of the market then steadily worked their way up. The same will be broadly true of China, except it will probably prioritize the developing world even more strongly. Chinese exports to Africa, the Middle East, Asia and South America have recently been growing far more rapidly than those to the United States. China sent more than 31 per cent of its exports to the US in 2000 but that figure had dropped to just over 22 per cent by early 2007 and is now 18 per cent. [540]
Although China is already making significant progress in low- and medium-technology industries such as white goods and motor vehicles, it is also intent, in the longer term, on becoming a major player in a high-tech industry like aerospace. China will shortly begin production of its own regional passenger jet, [541] while Airbus has announced its intention of shifting some of its manufacturing capacity to China. [542] Possibly as a way of leapfrogging the development process, the main Chinese aerospace group was reported in 2007 to be considering investing in, or bidding for, six of Airbus’s European plants that had been deemed surplus to requirements, although in the event no offer materialized. [543] Given time, it is inconceivable that China – already the second largest aircraft market in the world [544] – will not become a major aircraft producer in its own right. The fact that it is steadily developing its space programme – it conducted a successful manned space flight in 2003, launched a lunar orbiter in 2007 and plans to launch its own space station in 2020 – indicates that China is intent on acquiring highly sophisticated technical competence in the aerospace field. [545]
