No.361 February 20, 2009
Special Issues  
  JEDEC Flash Storage Summits, Shanghai China
 
USITO Policy Update, Issue 9
 

USITO will align with JEDEC to support the Shanghai Flash Storage Summit, March 31, 2009. JEDEC's Flash Storage Summit is the place to hear about future trends and upcoming standards from industry leaders. You are welcome to register with either JEDEC or USITO to attend the event. Please click here for the official website for the event, and click here for the Chinese version press release. We appreciate your attention.

Top Stories: ICT Industry Stimulus Plan Approved

China Approves the Stimulus Plan for the ICT Industries

On February 18, 2009, China's State Council approved the strategic plan proposal submitted by the Ministry of Industry and Information Technology (MIIT), which aims at boosting the country's electronics and information industries (ICT industries) by granting preferential policies and more investment, and promoting new technologies like 3G, as well as hi-tech services.

The Plan depicts three key missions states the government will promote innovation, increase financing and foster the use of information technologies across many fields over the next three years. Investment will focus on promoting the adoption of new technologies such as 3G services and digital TVs. The government also encourages efforts to develop national science and technology projects and improve public technological service platforms. It will promote outsourcing, encourage electronics and information enterprises to venture overseas to build R&D centers, production bases and marketing networks. More policy support will also be given to the sector, including tax rebates for electronics and information product exports. For more details, please contact jimmy@usito.org. People.com.cn, 2/18/2009

USITO Notes: The story has been reported and analyzed in the last USITO Weekly Newsletter issue (link). Again, the theme of the Plan is to stimulate internal demand by encouraging three missions, launching six projects, and implementing ten supporting policies. It is noteworthy that in this 19-page long stimulus plan submitted by MIIT, it highlights the encouragement for the growth of indigenous R&D in the fields of integrated circuit, basic software, and large screen flat panel display; and lists a series of measures to favor domestic products such as "to systematically replace foreign software products used in government agencies with homegrown software products". On the other hand, the Plan shows big concerns on the shrinking foreign invested business, such as in the beginning it alerts that "FIE investment and revenue account for 57% and 80% respectively of the industry total. As the major force of China's ICT industries, FIEs encountered significant drop in the first 10 months of last year, with the revenue 4.4% lower than industry average. The decreasing revenues of Nokia, Motorola, and Samsung have directly led to the negative growth of local industries in Beijing and Tianjin." Despite the wording, a fair stimulating framework for FIEs is yet to be observed in the Plan. The final official copy of the Plan has not been released, USITO will keep tracking on the issue, and reporting any new updates. Interested members please contact us to stay in the loop.


PC Sales Growth in China Slow Down

According to CCID Consulting, in 2008, China sold a total of 32.19 million desktop PCs, laptops and servers. Though the figure grows 15.2% year-on-year, but it is lower than the 19.5% rate in 2007.

Revenue increased by only 9.6% year-on-year to RMB 161.2 billion (USD23.6 billion). In 2008, the number of laptops sold jumped 43.2% year-on-year to 9.02 million units. Revenue from laptops grew 27.1% to RMB 63.6 billion.

The number of desktops sold last year rose 6.8% to 22.49 million units. Revenue dropped 0.8% to RMB 85.37 billion compared with a year ago. The report estimated PC sales would reach RMB 177.4 billion in 2009, with RMB 82.82 billion coming from desktops and RMB 80.6 billion from laptops.

USITO Notes: The economic downturn seems affecting every sector. Prospective buyers may withhold purchase plans, waiting for lower prices. It is the government duty to stimulate consumers' passion and expand the market. In late 2008, the government rolled out the Rural Household Appliance Subsidy Program, which aims at boosting demand by granting 13% subsidy to the farmers who buy electronics products. China has 900 million rural residents, the majority have potential demands for electronics products. The market potential is great, and will partly help set off the downturn of demand collapse.

Official expresses concerns over protectionism

Yao Jian, spokesman for the Ministry of Commerce (MOFCOM), told a press conference that China was "deeply concerned" over protectionism in some countries, which he didn't identify. "China is against any form of protectionism, and we propose cooperation and negotiation to solve all international trade issues," Yao said. Detail

Software export hit USD14.2b in 2008

China's software export soared 39% last year to 14.2 billion U.S. dollars from 2007, despite the international financial crisis, according to MIIT. Detail

Internet domain names grow to 177 mln

Internet domain name registrations posted a significant 16% growth last year, the five largest top-level domains in terms of base size were .com, .cn (China), .de (Germany), .net and .org. Detail

USITO China Multi-Level Protection Scheme Update (MLPS)

Following USITO's November 2008 report detailing China's MLPS regime , USITO have prepared an updated briefing regarding latest developments including ongoing turf wars between MIIT and MPS, new draft standards, linkage to TCM standard, and new MPS testing requirements. This report, which is for members only, can be downloaded in USITO website Knowledge Center.

Selected Chinese Media Reports


Seven Vendors Share China Telecom 3G Handset Contract

Sources from handset vendors said that following the first purchase of 5m CDMA1X handset units, China Telecom has kicked off the process of buying another 1.2m handsets. This round of purchase by China Telecom aims at medium to high-end handsets. Currently, seven vendors including China's Coolpad and South Korea's Samsung have signed deals with China Telecom for supplying the handsets. Chinese Text

China Telecom to Deliver 3G Services in May

China Telecom signed deals with seven vendors on February 13, for buying 1.2m 3G handset units. Head of China Telecom's handset department said the purchased handsets will be put to trial in May, and the network testing is ongoing. China Telecom is planning to deliver 3G services in May. Chinese Text

Network Access Test to Conclude for First Batch of WCDMA Handsets

Sources told the media that the network access test for WCDMA handsets are ongoing, and the test for first batch of such handsets submitted is about to conclude. According to China Unicom's plan, 3G trial services will be delivered in 55 major cities including all the provincial capital cities in the first half of the year, and extend to 282 cities across China at the end of this year. Chinese Text

Huawei Demonstrates 4G Technology

At the Mobile World Congress held in Barcelona, Spain, China's telecom giant Huawei made a demonstration of the world's first 4G system designed for mobile carriers. Huawei said this means it has stayed ahead of the world in 4G technology development. This January, TeliaSonera, the top telecom carrier in north Europe signed an LTE contract with Huawei, which was the world's first such deal. Chinese Text

MIIT Suspends PHS

The Ministry of Industry and Information Technology published the Notice on Issues Concerning Frequency Range 1900-1920MHz last week, terminating the development of PHS. According to the Notice, the frequency range 1900-1920MHz previously used for PHS will be separately assigned to other services, and PHS will be cancelled before the end of 2011. Chinese Text

Expert Predicts China's Dominance in TD-LTE International Standard

Wang Zhiqin, Vice General Engineer of China Academy of Telecommunication Research, said on the 7 th General Assembly of China Communications Standards Association that LET has become a trend of new generation broadband wireless mobile communication, and China will dominate the setting of TD-LTE (3GPP R8) international standard. According to Wang, TD-LTE is an important path for the development of TD-SCDMA. To ensure the success of TD-SCDMA and its sustainable development, we need to accelerate the drafting of TD-LTE standard, and its R&D and industrialization process. Chinese Text

ZTE Constructs HSPA+ Network in Hong Kong

ZTE and CSL NWM, the top mobile carrier in Hong Kong and an affiliate of Telstra, announced a plan to work together to build the world's first SDR-based HSPA+ network. Upon completion, the download rate will reach 21Mbps. Chinese Text
China's Top Internet Firms Repurchase Stocks

A few Chinese listed Internet companies, including Alibaba.com, QQ.com, have recently announced their plan to repurchase their stocks. Analysts say it indicates these companies are confident on their company prospects.

JuRen Network Give A Raise to Staff

Despite the global downturn in the Internet downturn, JuRen Network (ZTGame.com), a top Chinese online game company, decides to give a salary raise to its staff with the average growth up to 14%. Sources said the company has been doing well recently. Chinese Text

 


Hai'er Gives Up Acquisition Plan for GE White Electronics

Zhang Ruimin, CEO of Hai'er Group, China's largest Electronics firm, annouced that his company will give up the purchase plan of GE's white electronics sector. He said Hai'er will transform itself from a manufacturing company to a marketing-oriented one. Chinese Text

Guangdong Becomes Global Top LCD TV Module Manufacturing Base

Wen Guohui, Director-general of the Information Industry Department of Guangdong, said that Guangdong has become the world's largest LCD TV module manufacturing base. Chinese Text

Lenovo Reconsider Acquisition of Brazilian PC Vendor

News is spreading that Lenovo will raise its bid for acquiring Positivo Informatica, the largest PC vendor in Brazil, and the news led to a record 79% rise of the company's stock. Lenovo officials didn't comment on or deny the news. Chinese Text
Neusoft to Acquire DHC

Neusoft announced on February 16 that it plans to acquire Dalian Hi-Think Computer Technology, Corp., an offshore software and outsourcing service provider. After the acquisition, Neusoft will be China's first outsourcing service provider with over 20,000 employees. Neusoft explained that the purpose of this acquisition is to further expand the size of the company in international software outsourcing and service, and boost its overall capability to compete. Chinese Text

Ufida to Launch Merger & Acquisition Program in China

According to Wang Wenjing, Ufida Chairman and General Manager, the ongoing financial crisis has both negative and positive influences on management software makers. He believed the crisis has presented rare opportunities for Ufida to expand. ˇ°We will wage an new acquisition campaign when the time is ripe.ˇ± Chinese Text

Guangzhou European IT Services Outsourcing Center to Operate Next Year

Sources said that the first industry park aiming to deliver IT outsourcing services for European enterprises will start operation in Guangzhou next year. The facility, located in the Science City in Guangzhou, covers an area of 18,000 square meters, and can accommodate 5,000 employees. Chinese Text


International Copyright Trade Center Set up in Beijing

On February 16, the first national copyright trade center was proclaimed in the Yonghe Science & Technology Park located in Dongcheng District, Beijing. This is so far the most advanced copyright trade center in Beijing. Chinese Text

ZTE Signs Cooperation Agreement with T-Mobile

ZTE announced on February 19 that it signed a General Framework Agreement with T-Mobile. The deal covers handsets and data cards required for enjoying T-Mobile services. Both sides aim to build a strategic partnership covering all the markets in Europe. Chinese Text

China Mobile to Increase Investment in Pakistan

On February 13, the branch of China Mobile in Pakistan announced that it plans to invest USD 500m in network construction and other infrastructures this year. China Mobile acquired Paktel , a Pakistani telecom firm, in February 2007 to found its Pakistani branch. According to the branch's chief operation officer, China Mobile has invested a total of USD 1.66b in Pakistan, creating 41700 jobs. Chinese Text

CCTV.com to Establish National Network TV Station

An announcement posted at the official website of SARFT on February 18 declared that CCTV.com is preparing to establish the national network TV station. Chinese Text

USITO selected and translated the news summaries above. If you are interested in learning more details about the above Chinese language links, you are welcome to contact us (wenjie@usito.org) to sponsor the translation of that report.

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