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Published on : Jul 20, 2015

China’s vast technology sector is lucrative for the Silicon Valley. Some of the biggest companies in the Silicon Valley are pumping in billions of dollars into China’s technology sector to preserve their access to the large Chinese market. The last couple of months have witnessed companies such as Hewlett-Packard, Cisco Systems, and Intel investing in Chinese funds and partnering with the domestic companies in China to maintain their hold in the country’s technology industry. Analysts point out that the U.S.-based technology companies are establishing research and development centres in China and entering into joint ventures in a bid to preserve their stakes in the Chinese market. 

According to the reports, China is the world’s largest fastest-growing market for semiconductors and is aiming to grow its semiconductor industry by 20% annually in the span of next five years. Increased demand for high-tech goods in China has also made the technology firms to collaborate with the domestic companies as the Communist government has made it clear that the companies helping to strengthen the domestic technology sector will be favoured more. For the technology firms, partnering with the local companies mean they would be able to sell their products more. 

The companies have mentioned that they are adopting to the new policies implemented by the Chinese government. However, analysts point out that the new guidelines could affect the sales operations of many international semiconductor companies operating in China. The international firms also want to gain the expertise offered by the local companies to work in the domestic market. China has emerged as the largest market for various consumer electronic goods such as mobile phones, TVs, PCs, and others. For any company to tap this huge market, it has become imperative to know how to operate in the market. This new atmosphere has led to the international firms rushing to invest money in the Chinese market or partner with the local firms.