China: Storage Superpower?

Its days as a slumbering giant long over, China is poised to make the same impact on storage that it's had on PCs, wireless, and the Internet. And that impact is likely to be made as both a buyer and seller of storage technology.

It's not news, of course, that the Chinese market is a large one, growing at breakneck pace. But here's some context to put those ideas in sharper relief. China expects to overtake the U.S. in terms of Internet users within the next two years, according to the government, with a slew of technology projects designed to haul the country's 1.3 billion citizens into the 21st century.

Last week, for example, one of the world's first trials of 4G mobile technology went underway in Shanghai, and the country is working on a number of major e-government projects.

Chinese vendors Huawei and Lenovo are driving these efforts forward. This week, Huawei announced global contract sales of $11 billion in 2006, a 34 percent hike on the previous year. (See Huawei Sales Hit $11B.) Some 65 percent of this revenue came from sales outside of China, underlining the vendor's growing status as a global technology player.

These government-led initiatives are expected to foster explosive demand for backup and archiving wares, according to analysts and in-country vendors. This could lead to Chinese interests buying up an existing storage vendor, as Lenovo did in 2004 by buying IBM's PC business. It's a short hop from there to using the growing market clout of China to put even more price pressure on storage products, commodities or not.