China's lighting and electrical industry in coming months will be green, as suppliers remain focused on categories that promote energy efficiency. The move comes amid the growing call for increased environmental awareness, which has resulted in the enactment of legislation, both domestically and overseas, favoring renewable energy and power-saving devices.

In this regard, China revitalized the local solar panels industry over the past several months, encouraged by the growing availability of PV cells and advancements in amorphous or thinfilm technology.

This is supported by customs statistics, which show exports of solar modules in January to November 2008 overtaking electrical fixtures and indoor lighting to become the period's top revenue driver.

Shipments of PV panels, counted with solar cells, photosensitive semiconductor devices and LEDs, surged 143 percent to exceed $11 billion, accounting for more than onethird of sales.

China companies will also boost output of compact fluorescent lamps and LED bulbs to prepare for the anticipated increase in demand as markets start phasing out incandescent lamps.

CFL makers are therefore prioritizing RoHS compliance to address concerns over their products' mercury content, particularly since the EU has lifted its anti-dumping policy on the line.

Suppliers of LED bulbs are using developments that have yielded highpower diodes to strengthen their foothold in the residential lighting segment.

Companies are concentrating on these high-growth lines amid the financial slump to strengthen China's status as the primary manufacturing hub for lighting and electrical. Exact figures are difficult to obtain, but annual output has been placed at 50 percent of global supply.

The following are some of the key trends we see in China's lighting and electrical export industry:

• Driven by the popularity of environment-friendly products, the sector will continue to fare better than others. Export volume between July and November 2008 fell 2 percent YoY, around the time when China started to feel the impact of the economic crisis. The fact that shipments remained on the growth track, however, is notable considering that many industries registered a decrease in exports during the period.
• High prices, which propelled export sales to jump 42 percent last year and exceed $30 billion, will be adjusted downward in coming months. Many suppliers are anticipating reductions of at least 5 percent. Some are more optimistic with their projections, confident that they can bring quotes down by as much as 15 percent.
• Consequently, makers are preparing for price competition by enhancing manufacturing capability, specifically efficiency.
• Product development efforts in the months ahead will continue to be geared toward energy-saving devices. Companies will also address performance-related issues by improving durability and extending service life.

This report covers light bulbs and tubes, indoor and outdoor lamps, electrical fixtures and supplies, and solar panels. They are described separately in terms of construction and key features and specifications.

The Industry Overview elaborates on issues affecting production and exports and how companies are coping with these challenges. To reflect the industry structure, most of the suppliers in this report are China-owned with direct exporting capability.