According to a report in the China Daily newspaper, a local court in Guangzhou province ordered the close of production lines of the Chinese mobile phone maker Soutec, based in that same province, as one of the company's creditors that was owed 20 million RMB appealed to the local court. This close-down has triggered a chain reaction as other suppliers and distributors that also want to collect on Soutec's debts.

 

This case could be one of the first signs of consolidation in the Chinese mobile phone market. Domestic mobile phone makers have fallen on hard times after their market share grew quickly in the early years of the decade. Large international makers have been attacking the value-line end of the market for some time now, with Chinese makers unable to respond partly because they lack the R&D and design capabilities to introduce new phones into the market as frequently as the large international makers.