U.S. High-Tech Firms Find Early Foothold in China : Trade: With few telephone lines and personal computers, China is seen as a ripe market.

While trade to China continues to be a source of debate in Washington, U.S. computer and telecommunications companies are cutting deals and setting up factories, trying to grab some of the billions of dollars in business the Chinese are offering.

Just this summer, AT&T; said it would build a miniature version of itself in China, and AST Research Inc. and Compaq Computer Corp. announced plans for factories to make personal computers there.

“I regard China as the No.1 opportunity now for technology companies,” said Patrick McGovern, chairman of International Data Group, a leading computer research firm and trade magazine publisher.

“We see China becoming more decentralized, and medium-sized businesses will need computers just like the large” companies, said Safi Qureshey, chief executive officer of AST, the leading PC seller in China.

China has a way to go to catch up. Only 190,000 personal computers were sold in the nation of over 1.2 billion people last year, according to International Data’s Hong Kong office.

Other sales that do not show up in customs reports may boost the total to 250,000, analyst Saiman Hui said. That compares to about 12.5 million in the United States and 2.5 million in Japan.

China also has only 1.6 telephone lines per 100 people compared to 52 in the United States. “Demand for communications is enormous,” said William J. Warwick, chairman of AT&T; China.

In February, AT&T; agreed with China’s State Planning Commission to help develop the country’s telecommunications with new switching equipment, wireless systems, customer equipment, training and even a Bell Laboratories-style research operation.

Top-selling PCs in China in 1992 China’s strong economy and the prospect of reduced trade barrier’s with the United States have prompted U.S. companies to stake a claim in the personal computer market in the world’s most populous nation. So far, however, the market is tiny compared with the 12 million PCs sold in the U.S. last year. Personal computer sales in China in 1992 totaled $439.1 million, with 190,000 units sold.*

AST Research, USA, $118 million: 26.9% Compaq, USA, $81 million: 18.5% Great Wall Group, China, $49 million: 11.2% Legend Computer Group, China, $28.7 million: 6.5% Acer, Taiwan, $26 million: 5.9% IBM, USA, $23 million: 5.2% Lang Chao Group, China, $19 million: 4.3% Chang Jiang Group, China, $15.4 million: 3.5% Others less than 3% each, $79 million: 18.0% * Black market may account for 30% additional sales. Source: International Data Corp.