Xiao argues that IT product prices won't matter, as Chinese already tend to pay a lot for home appliances, seeing their quality as a long-term investment.
But what other than price would explain Apple's (AAPL - Get Report) second-quarter market share decline in China, to 10%? The seller of those expensive icons remains a status symbol in China but one that's often out of budgetary reach. Apple share prices have fallen since mid-September on supply issues (unrelated to China) concerning its iPhone 5.
Hewlett-Packard will be mindful of its brand, service and prices as it tries to keep a lead. According to the state-run China Daily newspaper, HP expects China to help it reach $7 billion in global profits next year. HP's chief American rival Dell (DELL - Get Report) said two years ago it would spend $250 billion on production, procurement and sales in China by 2020.
Xiao picks Lenovo as the likely second-tier market leader. But any company mentioned here stands to increase sales in middle-tier China, offsetting post-financial crisis consumer demand problems in the West. Gains in sales would keep share prices afloat for old-guard tech firms and send emerging ones much higher.At the time of publication the author held no positions in any of the stocks mentioned. Follow @ChinaWatchRalph This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.