Political factors

Political factors refers to the policies that each countries make out can exert (negative or positive) influence on one industry Holt (1995). Political factors affect the Neo-Neon through two aspects: one is from the Chinese market; the Chinese government pays more attention to the LED lights because the proportion of electricity consumption of LED lights is just 10% which is lower than that in the developed countries (19%),and there is lack of enough electricity to supply Chinese people, thus, Chinese government remedies its industry policy to support the LED lightening industry; another is from the LED plans supported by other countries; as shown in table 1, the governments of five regions have established special project and sponsored funds to support their domestic LED lightening products, compared with  other countries, Chinese government did not have larger investments on LED products. Those industry policies by other countries will make Neo-Neon face fiercer competition against the foreign LED lightening.

 

Table1. Basic information about LED plans in topical regions

Country	Time			Main Department	Industry Union	Money
	I	II
America	2000-2010			12 universities and LED companies		Total USD 500 million investment
Japan	1998-2002	2002-		4 universities 12 companies and 1 association		Yen 5 billion government investment
Europe	2000.7—2003.7 "Rainbow Plan"			6 universities and 2 companies	European Photovoltaic  Industry Alliance	BRIGHT/EURAM-3 plan
	2004.7—2007.7 Solid-state lighting Research Projects			Belarus and Aoxtron AG
South Korea	2000—2008 GaN Semiconductor Lightening Planning		2004-2008 Solid-state lighting plan			USD470million government investment; USD736 million enterprise investment
China	2003—National Semiconductor Lighting Project			More than 50 companies and 13 research centers	CSA	RMB117million government investment

 

 

(2) Economic and Environmental factors

The external economic environment of Neo-Neon can be divided into two parts according to its market that its LED lights allocated: Chinese economic situation and foreign economic situation.

 

China has been keeping higher GDP growth rate for more than 30 years, although many western commentators and researchers public their worry about Chinese current economy, the annual official growth rate of 7.9% in the early 2012 illustrates the Chinese economy is little affected by the globe glooming economy caused by European Debt Crisis. Nobel Prize Winner Robert W. Fogel (2010) even expected an average 8% annual growth rate in China from 2000 to 2040, which leads to a share of 40% of global GDP vs. United States (14%) and the European Union (5%). Chinese economic development will greatly improve people’s power of purchasing; the price of LED lights is much higher than the traditional lights so that many people cannot accept the LED products; with the improvement of purchasing power, the LED products with characteristics of high quality and environment friendly will be the focus of the future consumption.

 

In the international market, the biggest LED-consumption countries are suffering from European Debt Crisis. The countries in European Unions are cutting off their budget on the government purchasing and the negative growth rate makes their people decrease their shopping lists. Japan and America are fallen into the slowing economic growth. The recent UN report shows that Japanese economy is zero-growth in October in 2012, and America economic growth rate is just less 1% in 2011. However, the commentators and researchers have positive attitude towards the future global economy, they predict that the global economy will gradually recovery from 2013.