Sony's growth on the mainland could be slowed by China's unwillingness to fully open its borders to trade, even after the country complies with most of the rules of the World Trade Organisation, according to Sony China chairman Hiroshi Shoda.
Sony, which is forecasting a quadrupling of revenue to US$4 billion in 2005 from $1 billion last year, and as much as $8 billion in 2008, said its China business could run into hurdles due to non-tariff barriers that would slow the import and sale of key products manufactured elsewhere.
High expectations among foreign businesses that China would be an open market in a few years may be dashed by the realities of the way trade works in practice, Mr Shoda said. 'Everybody is expecting the WTO opening to make China a free market. We are not optimistic China is going to be a 100 per cent free market in the near future,' he said.
While China has promised greater access to foreign companies under the WTO regulations, 'there might be some conditions, some quotas, or some restrictions,' he said. 'It's a question of duties and [the valued-added tax].'
Sony China is the sales arm of the group with 700 employees. The larger piece of the Sony pie consists mainly of a US$3 billion electronics business with six manufacturing facilities and 10,000 employees.
The issue of imports is a significant one for Sony because it expects to gain market share against competitors by launching products simultaneously in China and other markets. The push is designed to overcome the image of Sony as a tired brand in China, behind rivals such as Samsung.
Permitting imports of goods which were made elsewhere would allow for co-ordinated product launches and help light a fire under Sony's sales in China, Mr Shoda said. 'If it is allowed for us, it would change our operations and probably Sony's growth rate in the China market would be accelerated,' he said.
