Global Times - 30.07.2019

B2 Tuesday July 30, 2019

BIZUPDATE

 Local producers benefit as companies become cost-conscious

Server makers race to adapt to changing sector

By Zhang Hongpei

With the development of newly

emerging technologies like

5G, big data and the Internet

of Things (IoT), the traditional

server industry will encounter

disruptions while providing op-

portunities for domestic server

makers and cloud computing

providers, industry analysts

said.

The market share in the

server sector held by Chinese

producers has been increasing

partly because more compa-

nies are opting to buy ordinary

servers from Chinese original

design manufacturers (ODMs)

with lower prices, instead of

high-level ones from the US

with Intel cores, according to

the Chinese edition of the Nik-

kei Asian Review.

Data from International

Data Corp (IDC) showed that

in the first quarter of this year,

Dell Technologies retained

the No.1 position in the global

server market with a share of

20.2 percent, followed by HPE/

New H3C Group, with a 17.8

percent share. China’s largest

server maker Inspur held 6.2

percent of the market, ranking

third spot, while Lenovo had 5.7

percent in the fourth.

“As a key part of IT infra-

structure, servers play a basic

supporting role for computing,

and we want to realize indepen-

dence and self-control especial-

ly in these basic technologies,”

Liu Xin, a senior industry ana-

lyst at Beijing-based CCID Con-

sulting, told the Global Times.

Chinese vendors are catch-

ing up in terms of global share

while their US counterparts

have shown declining trend,

although the latter still lead the

market, said Liu.

According to market re-

search firm Gartner, Dell’s

shipments of x86-based servers

declined by 6.8 percent year-on-

year in the first quarter of this

year, while No.2 vendor HPE’s

shipments fell 14.5 percent.

In comparison, Inspur’s ship-

ments grew 10.6 percent.

“Chinese server vendors are

narrowing the gap with foreign

vendors, from both the tech-

nology and shipment perspec-

tives,” said Charlie Dai, princi-

pal analyst at market research

company Forrester Research

Inc.

“The server industry in

China is one key market seg-

ment, building the hardware

infrastructure foundation for

digital transformation. Chinese

companies have rich experi-

ence serving local customers.

They are pursuing strategic ac-

quisitions, collaboration as well

as research and development

investment,” Dai said.

Liu acknowledged that there

are still some areas where Chi-

nese vendors need to catch up

to the core technologies in the

server sector such as CPUs,

semiconductors, storage and

operating system.

“But we can also see alluring

opportunities,” Liu added.

As more enterprises are

choosing open cloud comput-

ing solutions instead of tradi-

tional server providers amid

the new technology wave fea-

tured by 5G, big data, artificial

intelligence and the IoT, Chi-

nese server vendors that cater

to such rising demand will find

late-mover advantages.

H1 steel output growth

driven by market

demand: industry body

China’s steel output maintained stable growth in

the first half, driven by rising market demand, an

industry body said on Monday. An expert noted

that despite pressure persisting in supply and de-

mand in the domestic sector, prospects are sound

thanks to the government’s efforts to ensure mar-

ket stability and promote the systemic improve-

ment of production capacity.

According to data from the China Iron and

Steel Association (CISA), first-half pig iron pro-

duction rose 7.9 percent year-on-year to 404 mil-

lion tons, while crude steel output increased 9.9

percent to 492 million tons. Rolled steel output

stood at 587 million tons, up 11.4 percent.

The China Steel Price Index fluctuated around

110 points in the first half and the average index

was 109.48 points, down 3.6 percent year-on-

year, the CISA said.

Steel output was not decided by producers but

by market demand, CISA Executive Vice Chair-

man He Wenbo told an industry forum on July 13,

domestic news site cs.com.cn reported.

With continuous investment in basic con-

struction in China, demand for steel kept rising

and domestic producers met the demand as part

of the national economy’s development, He said.

Despite rising demand, fast expansion of steel

output may put pressure on the balance between

supply and demand, Wang Guoqing, research di-

rector at the Beijing Lange Steel Information Re-

search Center, told the Global Times on Monday.

In a bid to tackle that pressure, relevant depart-

ments are expected to regulate illegal production

and operation of steel capacity and more restric-

tions are likely to be unveiled to cut overcapacity.

Wang forecast that the domestic steel indus-

try will continue to see stable growth in the third

quarter as local governments have rolled out

measures to secure qualified capacity. China has

adopted practical measures to reduce steel capac-

ity in recent years.

Global Times

Priority is for HK to maintain sound business climate

Social unrest in Hong Kong has had

a negative impact on its international

image and it is a priority for the glob-

al financial hub to maintain a sound

business environment to prevent the

local finance industry from facing

more risks given the complicated

global economic climate, a Chinese

official said on Monday.

“So far we have noticed that Hong

Kong has kept a sound business en-

vironment... but the recent radical

violence has already had a serious im-

pact on Hong Kong’s social order and

international image,” said Xu Luy-

ing, spokesperson of the Hong Kong

and Macao Affairs Office of the State

Council, China’s cabinet.

The Hong Kong Retail Manage-

ment Association has said that most

of its members have seen a significant

decline in sales in the past month, Xu

told a press conference in Beijing.

Data released by the City Univer-

sity of Hong Kong showed that the

city’s consumer confidence index

has fallen to the lowest point in five

years. Also, the local tourism industry

said that the number of tour groups

from Southeast Asia countries has

decreased recently and is expected to

drop by more than 70 percent.

Some tourists from the Chinese

mainland have postponed their travel

plans to Hong Kong, as there have

been protests every weekend lately.

“This is only part of the situation,

which needs deep thought and vigi-

lance from the Hong Kong commu-

nity,” Xu noted. There has not been

an obvious impact on Hong Kong’s

financial industry so far, Xu said. “But

if its business environment becomes

worse and business confidence de-

clines under the complicated global

economic climate, the finance sector

of Hong Kong, an outward-oriented

small economy, will face more exter-

nal risks.”

It is Hong Kong’s top priority to

punish violence in accordance with

the law, restore social order as soon

as possible and maintain a good busi-

ness environment, Xu said.

The Chinese central government

will continue to support Hong Kong

in developing its economy, improving

people’s livelihoods and supporting

its active integration into the overall

development of the country.

Global Times

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Record span

A bridge seen under construction on Monday links Shanghai with Nantong, East China’s Jiangsu Province. The

11-kilometer Shanghai-Nantong Yangtze River will be the world’s largest road and rail cable-stayed bridge in terms

of arch span. Photo: VCG