Dell ups China buying

Dell will purchase some US$23 billion worth of components from China this year, slashing costs as it prepares for a possible recession in main market United States.

It plans to increase this amount to US$29 billion in 2009.

Speaking to reporters, CEO Michael Dell said the China is critical to Dell's global supply chain, and will purchase US$70 billion components from the country from 2007-2009.

This strategy will alleviate possible negative repercussions from a slowing US economy, the company's largest market at the moment.

"China is one of the most dynamic and fastest-growing economies in the world, and we've made significant business and social investments there in the past 10 years," Michael Dell said.

The company currently has two manufacturing operations, a design centre and a sales support centre in China.

Dell reported losses in 2006, losing top spot in the consumer electronics market to Hewlett Packard. It subsequently announced plans to break away from its traditional direct supply chain to include selling its products in through the retail channel.

In an earlier interview with Procurement magazine, Dell said it would continue to use the direct model in Singapore because it is a relatively mature market, but has named IT and electronics retailer Courts as the first of its partners here.