China Tries to Limit Phone Overproduction... Abroad
By Eric Lin, Thu Sep 11 19:00:00 GMT 2003

China is considering a new policy they say is to limit cell phone production. It sounds like they're trying to limit production in other countries, not China.


According to this report at China Daily, China is considering a new policy to limit overproduction of cell phones. The odd thing is the policy has very little to do with cell phone production in China. The new policy would ban Chinese electronics companies from buying handsets produced by foreign ODMs (typically in Korea and Taiwan) and branding them as their own. Typically these companies are locally owned electronics manufacturers who want to get into the mobile phone market but have little knowledge of handset manufacturing

Inside China, the move would be a boon to the dozen or so international companies with manufacturing facilities there. These facilities produce handsets for China as well as other parts of the globe. The international companies should then be able to sell more their handsets locally, while the locally owned brands would have to drop out or learn to produce their own goods.

Will the purchase of locally produced goods helps Chinese business, or will limiting local business's sales hurt the economy? Could the two factors balance each other out such that there would be no noticeable change?