China has become the world's largest mobile phone producer by churning out 240 million units in 2004 and the figure is expected to increase to over 500 million this year, a report said today.

Out of the total production, about 140 million units were exported, the highest number in the world.

Industry experts predict the production capacity was set to rise this year as new producers begin manufacturing.

"There will be 40 more firms to start manufacturing mobile phones this year. The total annual production amount may exceed 500 million units. This is more than 80 per cent of the world's total consumption," Xiao Chang, a senior economist of China Information Industry Association, said.

Meanwhile, domestic firms have achieved substantial progress in both production and sales. Their marketshare is now above 50 per cent, the report said. PTI

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