All roads lead to China

* This article is written by Allion Japan office with the business vision and perspective towards the greater China region.

From around the world companies are heading to China. More and more Japanese companies are establishing joint ventures with local companies to get opportunities lying in this huge country. This penetration of the Chinese market is occurring in several domains. Indeed, many types of businesses are looking for new markets in China.

And this move is not an exception for the product verification (testing) market where Allion belongs. After a successful launch of a test lab in Shanghai, Allion just opened another test lab in Shenzhen in August. Shenzhen is known for having one of the highest GDP per capita among mainland Chinese cities. It is also a city home to China’s most successful IT companies.

Allion Shenzhen test lab is intended to respond to the huge demand of IT products quality control and development. The lab will provide HDMI, USB test and also RF signal test; as well as compatibility test between devices.

Nowadays more and more Japanese companies are forming joint ventures in China to move their production there. This leads what is called in Japan “hollowing out of domestic industry” caused by Japanese enterprises shifting production overseas to take advantage of lower labor costs. Many products nowadays are “Made in China”. HDMI LLC reported that Chinese companies make up more than 20% of companies adopting HDMI worldwide. In 2009 all digital TVs integrated HDMI. Being aware of these factors, Allion will also provide HDMI testing services at the Shenzhen lab.

Reverse –import is another factor related to China. Some Japanese companies produce overseas to import it back to their own country. It becomes then a necessity for companies testing (verifying) the quality of those products to also move to the countries where products are manufactured. As in the past when Japanese car manufacturers started to penetrate the US market, parts manufacturers had also to follow them and create companies in US to supply them car parts. The same move might be necessary for testing companies.