"With the shifting production patterns of international industry giants and the rise in domestic phone manufacturers, the proportion of made-in-China mobile phones will grow from last year's 27 percent to around 33 percent in 2003," said Shao Chunguang with the research department of CCID, a think-tank for MII.

He predicted that mobile phone manufacturers in China would produce 130 million handsets this year with sales expected to reach 127 million units.

According to the statistics from MII, mobile phone manufacturers made about 100 million handsets last year, while about 119 million units were sold.

Shao said a steady increase of new subscribers, replacement sales and rising exports have been the three major driving forces behind the surging market.

Although it was predicted that China's mobile subscriber growth rate would slow down after hitting the 200 million mark, untapped markets in urban and rural areas would make long-term steady growth possible, with the two major mobile telecom operators expected to attract 70 to 80 million new users this year, including 13 million new subscribers for China United Communications Corp's CDMA (code division multiple access) network, according to the CCID expert.

A report by the Research and Development Centre under the State Council showed that 65 percent of urban mobile phone owners bought their phones before 1999, the replacement of many of these will boost mobile phone sales.

(China Daily February 11, 2003)