More than half of all mobile phones sold worldwide in the second quarter of 2007 were made in China, according to new research.

Shipments from the world's most populous nation are up more than 20 per cent on last year, say researchers from Taiwan-based Market Intelligence Center (MIC).

China's mobile phone industry is driven by the country's vast electronics manufacturing sector and huge home market for mobile phones, the analysts claim.

Shipments rose 23.1 per cent year on year in the second quarter to exceed 132 million units, and are predicted to exceed 147 million units in the third quarter and approach 166 million units in the fourth quarter.

GSM phones dominate the local industry's output as China's government has still not licensed any 3G networks.

"Owing to Nokia's strong global shipment performance, and robust demand in China's domestic market, the Chinese mobile phone industry's GSM shipment volume reached 114.9 million units, " said MIC industry analyst Wu Shan-Tung.

"The shipment figure did not live up to expectations, however, due to sluggish shipments from Motorola and its production partner Compal Communications."

As a result, GSM's share of the Chinese mobile phone industry's output fell to 87 per cent in the second quarter, down from 91.5 per cent one year earlier.

Cheaper CDMA phones for emerging markets also boosted demand from China's low cost factories.

"Nokia continued to outsource more of its CDMA mobile phones, and Qualcomm launched the value-line QSC-series CDMA chipsets, which significantly increased the price competitiveness of CDMA mobile phones in emerging markets, such as India, the Middle East and Africa," added Wu.