Don’t panic Samsung – China’s tech spending is not slowingPosted: May 24, 2012
I covered a story this week detailing comments Samsung China’s CEO Kim Young-ha apparently made to the FT, which basically summarised are – China’s austerity measures are dampening down consumer spend and this is BAD news for IT suppliers everywhere.
Now, I’m not suggesting Mr Kim doesn’t have his finger on the pulse over in that there China.
After all, Samsung has such a broad portfolio of electronics items covering virtually every conceivable category, from NAND chips to tablets, that the company should be a good canary down the mine when it comes to taking the pulse of the IT market in China, if you’ll excuse the mixed metaphor.
However, the piece overwhelmingly came across to me as fear-mongering. Kim told the paper that the Chinese government’s austerity measures targeted at the housing market had gone a bit over board and were having an impact on consumer spending.
Yet there is no evidence for this, aside from a brief reference to the fact that TV sales were disappointing in the recent Golden Week holiday period, and an unsubstantiated prediction from Kim that the domestic tech market would likely grow by just seven per cent in 2012.
I’m not sure whether this can quite be viewed as incontrovertible evidence that there is a decline, but even if spending were to slow down slightly, it’s still way above that of the West and probably had to slow down at some point.
The other benefit IT manufacturers have when it comes to the Chinese economy is that government feels much less beholden to international markets – within reason – and much more capable of acting swiftly and decisively to address any economic instability; whether this means slowing down one part of the economy or injecting a bit of stimulus in another part.
To top it all off, the signs from the analyst houses are all pretty rosy when it comes to IT sector growth in China. IDC predicts a surge in consumer tech spending of nearly 30 per cent while IHS iSuppli says PC sales there will grow 13 per cent this year.
The times they are a-booming in the PRC, despite what Samsung says.