In contrast with its overseas fortunes, TCL's domestic business grew 12 percent in the first half on the back of the government subsidies to boost purchase of appliances in rural areas.

TCL's domestic sales grew 12 percent in the first half of the year due to the government's stimulus moves. [China Daily]

The real challenge for the company, however, would to be make its presence felt in the urban market, said Li, as the government policy encourages urban residents to change their old home appliances for new ones in the second half of the year.

TCL's decision to invest in upstream products will help it to compete with its rivals who have also been aggressively expanding production capacities, said Joyce Yang, flat panel display product manager of SEMI China, an industry association.

On Tuesday, TCL's rival BOE Technology set up a new LCD manufacturing facility in Beijing with a total investment of $4.1 billion to produce eighth-generation panels.

China has been relatively slow in adopting more advanced LCD technologies and most of the companies are still using fifth-generation technologies. The advanced eighth-generation plants can churn out LCD panels larger than 50 inches using bigger glass sheets.

(China Daily September 3, 2009)