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High-profile cross-strait LED group mixes business, politics

A Chinese procurement group representing China's eight biggest vendors of electronic products has arrived in Taiwan with the primary goal of purchasing LCD panels. One cannot help but wonder, however, why they need to make such a high-profile trip across the Strait.

It is the fourth year such a delegation has been here for flat panel purchases. As in the past, the delegation has again signed letters of intent with major Taiwan-based panel makers.

This year, the Chinese firms are looking to buy US$4.5 billion worth of panels that are used to make TVs, monitors and the screens for many other electronic devices.

As these are only letters of intent, it means actual purchases may vary. Over the past three years, the actual purchases have been typically lower than the targets.

But Bai Weimin, vice president of the China Video Industry Association who is leading the group, said the unit goal of 30 million flat panels this year is higher than the actual procurement of 26 million units in 2011, despite the fact that the projected value is 20 percent lower than last year's due to the slumping prices of flat panels.

Her remarks carry a few messages summing up the current situations of the China market and the LCD panel industry: demand in China has been growing, while panel prices have plunged substantially.

In a market economy, the prices are determined by supply and demand. It seems that prices should be going up on increasing demand in China.

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