The sources said the sector expected to garner 130 billion yuan (16.9 billion U.S. dollars) in profit this year, up 20.9 percent from the year-earlier level.

Last year the sector posted big-margin increases in both output and profit but a slowdown in export growth.

According to the top economic planning agency, the electronics sector realized approximately 840 billion yuan (109.1 billion U.S. dollars) in value-added output last year, up 20.1 percent over the previous year. Its profit reached 107.5 billion yuan (13.96 billion U.S. dollars), up 23.2 percent. The growth rate was 20 percentage points higher.

The NDRC sources said in 2006, the electronics industry's export value accounted for 65.5 percent of the sector's gross output, up from the 55 percent level in 2003. Overseas-funded enterprises claimed a share of 79.9 percent of the sector's total sales income last year, up 0.7 percentage points from the year-earlier level.

The growing dependency on international markets has made China's electronics industry more vulnerable to trade frictions.

The sector is also beset with lack of core technology and decreasing profitability.

The sources said last year profit ratio of China's electronics industry went down from 4.2 percent in the previous year to 3.3 percent.