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China won't let the CRT die

As Japanese manufacturers shut down their tube TV production lines to concentrate on LCDs and plasma televisions, China steps into the gap.

Though Japanese television manufacturers have mostly ditched tube TV manufacturing, their Chinese counterparts are just getting started exporting the sets.

In 2007, China's TV exports will for the first time surpass its domestic shipments, according to a new report from market research firm iSuppli. That's a direct result of Japan's TV makers' decision to focus on the more lucrative business of flat-panel sets, which bring in significantly higher margins, said Kathleen Zhang, iSuppli's China analyst. China will export 39.6 million TVs this year, and ship 38.3 million domestically, iSuppli said.

Erica Ogg/CNET

Though more U.S. buyers have begun to snap up these high-definition flat panels, much of the rest of the world is still buying CRTs (cathode ray tubes), mostly because they're more affordable in small to midrange sizes and there's less demand for giant television sets in places other than the U.S. That's good news for China.

The bad news is though low prices might still be attractive in the North American market, the U.S. transition to digital television and high tariffs--up to $20 per set--on Chinese imports pose problems for China's manufacturers.

As of March, all TVs sold in the U.S. must have both a digital and analog tuner for the upcoming switch to all-digital over-the-air television transmissions, which will officially begin in 2009. Putting a digital tuner in a set is more expensive and if consumers have to upgrade their TV, many will likely go with an LCD or plasma while they're at it.

However, iSuppli says it expects China to adjust well and continue to increase its TV exports despite these factors. The market for televisions exported from China could be up to 54.5 million by 2011, the firm says.