China Competitveness

China plays a critical role in the competitiveness of the U.S. consumer electronics (CE) industry. This role increases
as the pace increases for the development of new and ever more cutting edge CE products, and as consumers
demand that prices for CE products drop still more to stimulate sales. This report examines the contribution of
China to the competitiveness of the U.S. CE industry so that policy makers can devise appropriate responses.
n The U.S. CE industry is highly competitive, and global production is an integral part of the industry's strategy for
quickly developing new products at affordable prices.
n U.S. CE production supports a network of global production. The United States remains a strong producer
of CE components and parts, most notably semiconductors and related devices, and software. As the global
network of production expands and deepens, U.S. manufacturers focus on the production of higher-end
consumer electronics as well as the design and marketing of CE products manufactured elsewhere.
n The product and country composition of U.S. CE exports and imports, as well as recent trends in CE exports
and imports, reflect the growing internationalization of U.S. CE production. They also reflect the increasing
importance of China to the competitiveness of U.S. manufacturers. Growing imports from China are largely
replacing imports from other Asian suppliers, which are declining. Large shares of U.S. CE imports come from
suppliers abroad to whom the U.S. importer is related in some way.
n CE investment abroad supports the competitiveness of U.S. CE manufacturers. U.S. CE investments in China, in
particular, contribute positively to the competitiveness of U.S. CE firms and their U.S.-based support operations.
These investments serve two purposes: to supply the growing Chinese market with locally-produced CE
products, and to help U.S. companies lower costs of CE products sold around the world, including in the highly
price-competitive...