Chinese exporters are moving up the value-added ladder as they turn to high value-added industries, according to a report from Lehman Brothers.

The report, released yesterday, looks into the status of China's top 100 exporters in 2005, as listed by the Ministry of Commerce.

The top 100 companies accounted for 24 percent of China's total exports in the year, which grew by a hefty 28 percent and resulted in a record trade surplus of US$102 billion.

More than half of them were foreign-invested enterprises, largely operating as outsourcing platforms. And they were also importing heavily.

Multinational firms increasingly use foreign-invested enterprises as outsourcing platforms in China, the report said.

Firms use these platforms to import high value-added components and capital goods, process and assemble them, and then mostly export the final products.

However, foreign outsourcing has also had positive spill-over effects on Chinese companies, as it enables them to acquire new skills and technologies and speed up their climb of the value-added ladder, the report said.

For example, of the 51 Chinese companies in the top 100 exporters' list in 2003, 19 were primarily involved in the textile business. However, the number dropped to 11 in 2005, with textile companies replaced by exporters in higher value-added industries.

(China Daily September 12, 2006)