Anyone clinging to the idea that China dominates world trade only in low tech areas where cheap labour gives it an unbeatable advantage was given a rude wakeup call by the OECD yesterday.

As of 2004, China is now the top exporter of information and communications technology, the OECD says, having pushed the US back to number two.

The exports include such diverse things as laptop computers, mobile phones and digital cameras, the OECD said.

In 2003, China surpassed the EU and Japan in ICT exports to move into the number two spot.

Worth less than $US35 billion in 1996, China’s ICT goods trade reached almost $US329 billion in 2004, growing at almost 38 per cent a year since 1996, the OECD says.

In the 2004 year, that export growth accelerated to 46 per cent, year on year, to $US180 billion worth of ICT goods, while the US posted $US149 billion.

In 2003, the US led with exports of ICT goods worth $US137 billion, followed by China with $US123 billion.

That growth in exports reflects China's movement up the value chain, the OCED said, as it adds increasingly sophisticated products and technologies to its mix.

Exports aren't the entire story, either.

China’s share of total world trade in ICT goods, including both imports and exports, rose to $US329 billion in 2004, up $US95 billion (41 per cent) from $US234 billion in 2003 and $US35 billion in 1996.

By comparison, the US share of total world trade stood at $US375 billion in 2004, $US301 billion in 2003 and $US230 billion in 1996.

The OECD says ICT trade is showing a shift towards more trade between China and other Asian countries, with a corresponding decline in ICT imports from the European Union and the US.

To manufacture laptops and advanced mobile phones, China previously relied on electronic components, such as computer chips, imported from the EU and US, it says.

These are now also being increasingly sourced from other Asian countries, including Japan (18 per cent of China’s ICT imports), Chinese Taipei (16 per cent), Korea (13 per cent) and Malaysia (8 per cent).

The increased share of Japan’s exports to China, for example, was mainly in electronic components.

China itself is also manufacturing and exporting more electronic components than ever before, with these now forming China’s second largest export item, after computer and related equipment.

China is the single largest exporter of ICT goods to the US, supplying 27 per cent of all US imports of these goods in 2004, up from only 10 per cent in 2000.

Its ICT trade surplus with the US stood at $US34 billion in 2004 and with the European Union at $US27 billion.

The 2004 data do not include the effects of China-based Lenovo's acquisition of IBM's personal computing business.