China accounts for about 35 percent of the global supply of surveillance cameras, and 40 percent of the worldwide DVR market. As production and export volumes rise to match the strong demand, makers expect the country to remain a major manufacturing base for CCTV cameras and systems.

The output of China-made cameras alone is projected to increase to 23 million units in 2009. Production of DVRs will climb by about 20 percent to 1.5 million. Rising demand for 24hr surveillance will boost the infrared day/night camera line, which is currently dominating the CCTV camera segment. The output reached about 10 million units in 2008, nearly half of the total supply of CCTV cameras. It is expected to continue expanding as suppliers release other types, including standard box, dome, speed dome, pan-tilt-zoom or PTZ and IP models.

Makers of DVRs are optimistic about domestic and overseas sales, with more than 60 percent projecting at least 30 percent export growth. In addition to lowering prices to boost margins, suppliers are developing new software and adding value through enhanced functions and features. Companies offering stand-alone and portable DVRs said the shift to digital surveillance will sustain growth in the next few years.

Makers of CCTV systems are emphasizing high resolution and realtime recording. Many companies are increasing the number of channels and video compression technologies supported.

The following are some of the key trends we see in China's CCTV and surveillance industry:

• The intensifying competition and thinning margins are prompting more companies to reduce prices in coming months to stimulate sales.
• The rising cost of production and the yuan revaluation are forcing many makers to increase prices.
Since most makers concentrate on OEM and ODM business, complying with international standards is a priority. Companies secure UL listing and CE, FCC and RoHS approval.
• The EU will continue to be the main export destination for China's CCTV cameras and systems. To offset slumping sales in some areas, many suppliers will also be exploring emerging markets in Europe, North America, the Middle East, South Africa, South America and the Asia- Pacific region.
• Makers' product development initiatives will focus on improving the network transmission solutions and image resolution. Many companies will also be innovating on external designs and integrating wireless connectivity. A few suppliers are looking to enhance the video compression algorithms.

This report covers CCTV cameras and systems. The CCTV cameras encompass wireless, IP, IR day/ night, speed dome and miniature or pinhole models. The CCTV systems include stand-alone and portable DVRs, monitors, DIY surveillance kits, receivers and transmitters, and digital video servers or DVS. The supplier survey was conducted on manufacturers and traders of these products. The Industry Overview section discusses developments in China's supply market and makers' strategies to survive the economic slowdown. Trends in the different categories are tackled in the product modules.

The majority of suppliers are based in the provinces of Guangdong, Jiangsu and Zhejiang, and in the cities of Tianjin and Beijing. Shenzhen and Guangzhou are the main manufacturing centers in Guangdong, while the city of Hangzhou leads production in Zhejiang.