China's electronics manufacturing swells.

According to a report released by Electronic Trend Publications (San Jose, CA, www.electronictrendpubs.com), China has emerged as the world's leading manufacturer.

China's gross domestic product (GDP) is approaching $1.5 trillion annually--about one-third the size of the Japanese economy and 15% the size of the U.S. economy. Furthermore, China's leadership has identified electronics and information technology as one of the foundations of this growth.

Foreign direct investment (FDI) by original equipment manufacturers (OEMs) has played a leading role in China's emergence as an economic power and major electronics factory site. In 2002, FDI in China was larger than in any other country, including the U.S.

Another factor are the numerous joint ventures initiated by leading multinational companies, resulting in rapid, widespread technology transfer. China's emergence as a cost-effective manufacturer is also due to China's low labor cost, entry into the World Trade Organization and adoption of world-class manufacturing quality standards. These factors have made China the preferred location for OEMs abroad looking to make products for export as well as to penetrate domestic Chinese markets.

According to the report, China's IT market will continue to lead the electronics industry in growth and total size. China will account for almost 70% of the total electronics market by 2007.

The market for products manufactured in China is expected to expand at a 16.5% rate from 2002 to 2007. The highest growth rates will be experienced in segments that hold substantial export potential, such as computers and peripherals.

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