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Motorola Gets $1.6 Bln Phone Order From China Telling (Update2)

By Dune Lawrence and Janet Ong

http://www.bloomberg.com/apps/news?pid=conewsstory&refer=conews&tkr=MOT:US&sid=aXgixfHvi....

Nov. 13 (Bloomberg) -- Motorola Inc., the world's second- largest maker of cellular phones, said it received a $1.6 billion order to supply phone handsets to Shenzhen Telling Telecom Development Co., a distributor of phones based in southern China.

The contract for 12 million handsets in 2007 was signed today in Beijing, Yan Siqing, chief executive officer for Shenzhen Telling, told reporters today. Michael Tatelman, Motorola's North Asia general manager, confirmed the details.

Schaumburg, Illinois-based Motorola is aiming to win market share in China from Nokia Oyj in the world's largest cell-phone market. China has 443.2 million cellular phone users at the end of September, with an estimated 30 percent of the population owning handsets.

Shenzhen-based Telling Communications distributes handsets made by Motorola, Nokia, Samsung Electronics Co. and Sony Ericsson Mobile Communications Ltd.

Motorola is among a group of U.S. companies that's accompanying U.S. Commerce Secretary Carlos Gutierrez on his trade mission to China.

China's trade surplus surged to a record $23.8 billion in October as imports grew at the slowest pace in 15 months. The gap widened from September's $15.3 billion, the customs bureau said Nov. 8. Exports jumped 29.6 percent and imports rose 14.7 percent.

Record Deficit

``Our exports to China are up 34 percent in 2006 on a year to date basis,'' Gutierrez said at a signing ceremony in Beijing today. ``We now export about $50 billion of services and merchandise to China. The future should be focused on exporting to China.''

The U.S. trade deficit has reached a record each of the past five years and is on track to exceed last year's $726 billion by 8 percent. The monthly trade deficit was $64.3 billion in September, led by a monthly record trade deficit with China, the U.S. Commerce Department said last week.

The new Democratic majorities in the U.S. Congress are likely to increase pressure on President George W. Bush over the trade deficit with China. More than two dozen measures aimed at the record U.S. deficit and what lawmakers call China's unfair undervaluation of its currency were blocked by Republican leaders over the past two years. With Democrats controlling the House and Senate next year following the mid-term elections, they will be in better position to push these measures forward.

``We all have to be very aware of any steps that we take that would signal protectionism,'' Gutierrez said today. ``The initial signals and comments that we've heard from Congress have been very positive in terms of supporting trade and trade agreements.''

China's exports are expected to rise to $960 billion this year, the official Xinhua News Agency reported Nov. 10, citing commerce ministry official Liu Haiquan, boosting the country's trade surplus to $150 billion.

To contact the reporter on this story: Dune Lawrence in Beijing at [e-mail]

Last Updated: November 13, 2006 03:15 EST