No.376 June 5, 2009
Special Issues  
USITO/AmCham Breakfast Series on 'ShanZhaiJi' (Copycat Phones)
Notice
USITO Farewell Party for U.S. Embassy Offcials, June 12th
 

USITO and AmCham China will jointly host a event on ¡°bandit phones¡± or shanzhaiji (ɽկ»ú) - ¡°Shan Zhai Ji: Creative Copycatting, industry threat?¡±. This event will feature two leading industry experts to talk about the ¡°Shan Zhai Spirit¡± and investigate economics, legal, creative and cultural aspects of what has been recognized as a major force in the mobile market. It will take place at 8am-9:30am, June 18 (Thursday) in the Capital Club. Please register with ftzhang@usito.org.

Top Story

Real Name Registration System for Mobile Phones to Be Mandated

According to a 6/4/2009 report in Guangzhou Daily, three Chinese government ministries, namely MIIT, the Ministry of Public Security, and the State Council Information Office, have jointly drafted the regulations for real name registration system for mobile phones. The report said that the three ministries have submitted their proposal to the State Council for approval. Once approved, the regulation will immediately take effect, which means all mobile phone users will register their names as well as related ID information with the government. Guangzhou Daily, 6/4/2009

USITO Notes: The government initiative to mandate real name system for mobile phones first surfaced in March 2006 when the NPC (National People's Congress) reportedly received a few proposals from the delegates on such issue. Chinese telecom experts widely applauded the real name system as it is a double-edge sword: it blows the root cause of malicious sms, attacks, fraud, among other misdoings in the mobile space; on the other hand, it helps strengthen government control over this growingly massive virtual world. In China, the majority of mobile phone subscribers are prepaid users, who don't register any personal information when buying a SIM card.

Real name system has been introduced with various forms in a number of countries, such as Japan, Korea, Thailand, Australia, South Africa, etc. It has proved effective in withholding mobile space crimes or related problems. However, China still lacks an applicable law protecting personal information, so it remains questionable whether the mobile phone carriers could take due measures in safeguarding the user information they are to collect.

Four Ministries Mandate Installation of "Green Dam" Filtering Software on Computers in China's Middle Schools and Primary Schools

According to the Ministry of Education (MOE) website, four ministries, namely the MOE, Ministry of Finance, MIIT, and the State Council Information Office, has jointly issued a circular, which mandates that by the end of May 2009, all Internet-accessible computer terminals in China's middle schools and primary schools much be installed with the "Green Dam ¨C Escort of the Youth Flowers" software, in order to " filter unhealthy text and image content on the Internet ", as well as to "foster a healthy learning environmen in the campuses". The Notice also states that the Green Dam software will be upgraded regularly by the Green Internet Filtering Software Project Team of MIIT. Each middle and primary school shall update their software duely, to ensure that software operate smoothly and effectively. For more details, USITO members please click here for a draft translation of the circular. www.moe.gov.cn, 4/2009

USITO Notes: The Green Dam software is part of the program of "Special Campaign to Restore the Internet from a State of Vulgarity¡± launched by the Chinese government, which was officially launched on 1/5/2009. The government began promoting the software in Chinese schools since last year, as part of the preparation work to echo the campaign. So far it looks rather effective, as we read from the MIIT website that as of May 26th, a total of 2.17 million "Green Dam" software programs have been installed within China's middle/primary schools, accounting for over 80% of the market. However, if the government takes measures to mandate the installation of the software in more commercial computers, it could arouse a wide spectrum of concerns from international PC makers and software vendors. USITO members please contact us to keep tracking this issue.

China's 3G Economic Stimulus Plan

China's three major telecom companies, namely China Unicom, China Mobile, and China Telecom, signed an agreement with the municipal government of Beijing to spend RMB 100 billion (USD 14.7 billion) on telecom infrastructure.

The money will go to bolster the local broadband network coverage, better the telecoms network in the rural area, develop broadband applications, speed up 2G and 3G network upgrading, promote mobile telecom applications, and roll out more value-added telecom services. Detail

Member in the News: Nortel - Network Deployment for China Telecom Continues

Nortel Networks Corporation is deploying the CDMA network in six provinces and cities for China Telecommunications Corporation as the two parties contracted earlier, said the Canada-based telecom equipment maker, which has for many years been providing telecom equipment for China's CDMA network. Detail

Selected Chinese Media Reports

Regulations

Service Rules for 3G Mobile Business Comes into Effect

The "Service Rules for 3G Mobile Communication Business", formulated by the Ministry of Industry and Information Industry (MIIT), has officially come into effect since June 1, 2009, according to MIIT website announcement. The circular lists detailed rules regulating carriers' 3G business offerings. The following points are especially worth noting:

1. Since 6/1/2009, all 3G terminals must be able to access to 3G networks within 20 seconds. 2. Prepaid subscribers will be able to access their monthly bills within the following five months. 3. Disruption rate for the ongoing calls can not exceed 5%; successful data connection rate shall be at least 95%. 4. Telecom carriers bear the responsibility of protect the privacy of the users' personal information.

MOST to Set Indigenous Innovation Enterprise Standards

A senior official with the Ministry of Science and Technology said that the ministry will accelerate the formulation of the standards for "Indigenous Innovation" hi-tech enterprises, in order to strengthen the support to China's innovative enterprises. It will also encourage the establishment of a mulit-layer capital market to support the funding for these enterprises. Chinese Text

3G Mobile Communications

Only 8,000 TD Phones Sold in Q1

According to a report by China's leading market research firm Analysys International, in the first three months of this year, a total of 8,000 TD-SCDMA phones were sold in the Chinese market, a surprise for many industry insiders. Analysts from the company gave reasons including the unattractive tariff structure of TD, the bad coverage, and the users' reluctancy of shifting numbers to TD services. Chinese Text

CDMA2000 to Cover 500 Cities by Year End

According to a China Telecom executive, the CDMA2000 3G network operated by China Telecom will cover 500 Chinese cities by the end of this year. On May 17, the company announced its 3G services have covered 342 cities. The executive also said that China Telecom plans to develop a total of 36 million CDMA 2000 subscribers by the end of this year. Chinese Text

Chinese Firms Poised to Lead the Wireless Market

A latest report from Dell'Oro said that two of Chinese telecom equipment vendors are now ranked into the top five list of world wireless equipment vendors.- Huawei now in the third place and ZTE the fifth. It is estimated that within a few years, the two companies in combination will take at least 50% of the domestic wireless equipment market share, compared with their present share of 20-30%. On the other hand, the international telecom equipment giants will see their market share eroding in the next few years. Chinese Text

 

Trade and Investment

Chinese Venture Capital Firms Blowed by the Financial Crisis

A senior Chinese official said in the 2009 China Venture Capital Summit that China's VC sector was seriously affected by the world financial crisis. He said their activities were largely streamlined, many were closed or restructured, and some saw the broken capital chain. He commented that this sector is far from mature and lacks professional management, as in 2008 34.7% of all the capital were from private sources (compared with 14.8% in 2007) and were focused on short term gains. Chinese Text

Shenzhen to Build China's Super Computing Center

On June 4, the Shenzhen Government held press conference to announce the establishment of China's Super Computing Center. The announcement was to echo spirit of the Ministry of Science and Technology to construct a super computing center in Shenzhen. According to the plan, the central government will invest RMB 200 million for the center, which is estimated to be operational by the end of 2010. Chinese Text

Internet

Domain Names A Good Business

According to latest CNNIC report, currently the industry scale for the domain name business in China has reached RMB 4.2 billion (in terms of annual revenue), attracting about 100,000 people into the field. By the end of 2008, there were 16.8 million domain names in China, growing 41% year on year. The rapid growth of the domain name business has also stimulated related businesses, such as data host, website design, etc. Chinese Text

Google's Market Share in China Dropped by 2.1% in Q1

A research report by iResearch (China's top Internet research company) states that in the first quarter of this year, the market share of google.cn (google's Chinese portal), has declined to 20.9%, from 23% in the preceding quarter. By contrast, Baidu.com kept expanding its market by 2.1% to 74.1%. The report says there remains a long way to go for google to chanllenge the Chinese online search campaign. Chinese Text

Software

Chinese Lawyers File Lawsuit Against Software Alliance

According to a report in Beijing Business News, Dozens of Chinese lawyers have just allied to file a lawsuit against the Business Software Alliance and IDC, which claimed in a report that China's software piracy rate is as high as 80%. The Chinese official figure for the piracy rate is 29%, a much lower figure. The lawyers said in a statement that the U.S. statistics are groundless and seriously infringed the rights of Chinese consumers. 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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