No.381 July 10, 2009
Special Issues  
USITO Addresses MOFCOM Shenzhen Event
USITO Standard Work Group Meeting Notice
 

On June 9th, the Ministry of Commerce hosted a seminar in Shenzhen of Guangdong Province, in which the ministry invited dozens of senior officials, executives and academians to discuss the challenges posed by the world financial crisis, how the Chinese firms should crack the nuts and find opportunities. USITO President Dr. John Chiang delivered a keynote speech in the opening session with the topic of "Readout of U.S. Stimulus Bill and Opportunities for Chinese Enterprises". Agenda
Top Story

NDRC Chief Encourages Investment from Multinationals in Think Tank Summit

On July 2, the first "Global Think Tank Summit" opened in Beijing. The event, hosted by China Center for International Economic Exchanges (CCIEE), boasts the "highest level think tank meeting" in China. Official press releases from the organizers said it attracted around 100 top-notch think tanks from around the world, with the topic focusing on the world economy and the global financial crisis. The Summit was comprised of a major forum and five sub-forums, and themed as "Sharing Mankind Wisdom, Seeking Global Development".

Figures addressing the opening ceremony included Chinese Vice Premier Li Keqiang, CCIEE Chairman Zeng Peiyan (former Vice Premier), Chairman of the Brookings Board of Trustees John Thornton, as well as some key Chinese economic officials and world famous politicians, scholars and economists. Li Keqiang said in his address that "This Global Think Tank Summit is held amid a global financial recession while the crisis is still spreading and deepening. It is of great significance that great minds from different countries, academic institutions, international organizations and multinational enterprises can get together to discuss topics concerning the global financial crisis, and the sound development of the world economy."

Zhang Xiaoqiang, Vice Minister of the National Development and Reform Commission (NDRC), delivered a keynote speech in the Summit. His points were mostly about China's sincere welcome to foreign investment. He said that the country will welcome investment from multinational companies in revitalization projects for 10 pillar industries: light industry, iron and steel, autos, shipbuilding, petrochemicals, textiles, non-ferrous metals, equipment manufacturing, IT and logistics.

Mr. Zhang gave an example of Multinationals' successful engagement with China's revitalization projects: the German BASF, a world leading chemical company has just launched a new project in China's petrochemical sector, and the investment was totally in line with Chinese government stimulus plan for the industry. In addition, Mr. Zhang also encouraged multinationals to participate in the 16 medium-to-long-term projects such as water disposal, pharmaceuticals production and broadband wireless communication. He added multinationals are especially welcome to setup R&D centers in China. people.com.cn, 7/3/2009

USITO Notes: Mr. Zhang's remarks always receive great attention and invite careful readout from the industry, because of his role with China's most powerful economic planning and administration authority. As discussed in recent USITO weekly newsletters, the 9-ministry directive requesting preference on domestic products in the country's stimulus plan carry-out has aroused wide criticism. Consequently, the leading ministry NDRC was under great pressure and in the past few days they began to clarify that directive does not intend to discriminate any foreign products. Mr. Zhang also leveraged the opportunity in the Think Tank Summit to mitigate the suspicion of the international community about that circular.

One more point worth USITO member companies' attention is his pitch for the 16 special projects. USITO published a report on the 16 special project early this year (member download), analyzing the 16 national campaigns which aim to garner world level technologies. The campaigns would no doubt need international cooperation: most of the projects involve hardcore patents held by multinationals or foreign stakeholders, such as the one of the 16 projects, "high-end chips", is yet to see any substantial breakthrough - the homegrown Loongson finally chose to buy license from MISP of the U.S. Sources said the drive for building domestic super computer "Dawning" series also relied on foreign CPU. So it is clearly a paradox if Chinese authorities, like the nine ministries, tend to exclude foreign players under the nation's overarching innovation call.

CES 2009 Kicks off in Qingdao

China International Consumer Electronics Show (SINOCES), China's most prominent consumer electronics exhibition scheduled July 9-12, was opened in Qingdao this Thursday. The SINOCES event is a collaboration between the Consumer Electronics Association (CEA), who is the producer of the International CES, and the Chinese organizers including the China Electronic Chamber of Commerce (CECC) and the Qingdao Municipal People's Government. The event is also certified by the U.S. Department of Commerce export trade promotion program.

Reports from sina.com said this year's SINOCES was especially successful: as many as 1,509 exhibitors showed up, 14.3% higher than last year's figure, thus it is "amazing" in the time of world economic crisis. Floor areas expanded 20%, and 15.6% of all exhibitors come from overseas. It is also reported that this year's event is supposed to attract the largest ever amount of visitors. tech.sina.com.cn, 7/9/2009

USITO Notes: The annual SINOCES started from 2005, and this year's attendance looks a surprise, compared with the slack scenery in a few past events. There is no doubt that the world views China as a most important market for the consumer electronics industry. Sources from the Consumer Electronics Association state that China's consumer electronics market is expected to reach USD 100 billion this year, accounting for around 15% the global consumer electronics revenue. As the only CE show in China, it serves as a good platform for companies to gain global exposure for their new products, new technologies, brand and vision. USITO has also taken the opportunity to promote the public awareness for the industry's sustainable development, by sponsoring a sideline seminar on July 10. Interested members please contact juliaz@usito.org who is now on the spot for more details.

Member in the News: IBM Issues Corporate Responsibility Report

On July 6, 2009, IBM issued its Corporate Responsibility Report, detailing the company's social performance results and strategies in the areas of governance, supply chain, environment, community engagements, employment policies and practices, and public policy.

The 40-page report features IBM's Corporate Service Corps, a program IBM characterizes as a corporate version of the Peace Corps. It demonstrates how fully integrating business and social strategies can make significant and lasting impacts in communities.

Another program described is IBM's work in the Sichuan province in China, the area stricken by a powerful earthquake last year where teams of IBMers engaged in the relief and recovery effort using their technology skills. Detail

Knowledge Center: Snapshot of China's X86 Server Market
*** Members click here to download ***
Selected Chinese Media Reports
 

Trade & Investment

Beijing Launches Large-scale IT Investment Program

The municipal government of Beijing published on July 6 the Beijing Information Technology Infrastructures Improvement Plan 2009-2012 and a supporting implementation plan. According to the plans, by 2012, Beijing will direct a non-government investment of RMB100b to the information technology infrastructures field, aiming to build Beijing into a urban-rural integrated digital city covered by a high-speed broadband information network. Also, Beijing vowed to increase efforts to promote the convergence of computers, communications and content (multimedia), and sustain the continued development of the electronic information manufacturing industry, software and information service industry. Chinese Text

E-commerce Market Reaches RMB 3000b

The 2009 Cross-straits Internet Development Forum opened in Beijing on July 7. Xi Guohua, Vice Minister of MIIT make a speech and gave a briefing of the Internet industry development in Chinese mainland. In 2008, the E-commerce market grew 41.7% to RMB 3000b in 2008. According to Xi, MIIT will continue to promote the widespread use of Internet, and accelerate the application of IT in rural areas, through extending telephone service and Internet to every administrative village. He emphasized that China 's Internet industry is maintaining a strong momentum of growth. Chinese Text .

ZTE Wins Big Contract from Norway

Norwegian telecom operator Telenor just signed a deal with ZTE, for a purchase of 2 million USB data cards in the next 12 months. Products purchased under this contract will be for Telenor's 13 subsidiaries located in many countries. ZTE won this contract for the excellent overall performance and quality of its products, as well as its capabilities in adapting its products to clients' needs, according to Kjell Nordhagen, an official of Telenor Group in charge of terminal purchase. ZTE is the second largest but fastest growing data card supplier in the world. Chinese Text

Huawei Outpaces Ericsson as No.1 Base Station Supplier

A latest report published by EJL Wireless Research, a market survey company, shows that in 2008, China's telecom equipment vendors earned a 40% share of the global base station market, and Huawei has surpassed Ericsson to become the global top base station supplier. EJL pointed out in a report named Analysis and Forecast of Global Base Station Market 2008-2013 that the global base station sales grew 27.8% in 2008. The report forecast and analyzed the shipments of and demands for mobile base station equipment globally. According to Earl Lum, founder of EJL, Huawei is the global top supplier of base stations, while Ericsson leads in GSM base stations market, Nokia in WCDMA base stations market, and ZTE in CDMA base stations market. Chinese Text

Semiconductor

China's First 1k Trillion-bit Supercomputer Underway

Sources said that the supercomputer Dawning 6000 with a capability of 1000 trillion calculations per second, jointly developed by the Institute of Computing Technology , Chinese Academy of Sciences and Dawning Information Industry Co., Ltd. is in the manufacturing process and will make debut next year. According to Dawning Company, the estimated peak speed of Dawning 6000 will exceed 1000 trillion calculations per second. The supercomputer will adopt China 's homegrown processor Loongson for the first time. The upcoming debut of the domestic high performance computer Dawning 6000 will proclaim two key breakthroughs: application of domestic CPU, and breakthrough in calculation capability on basis of current computer cluster architecture. Chinese Text

MIIT Accelerates Integration of Loongson Industry Chain

Lou Qinjian, Vice Minister of MIIT, said on July 7 that MIIT is planning to promote the integration of the Loongson industry chain, urging chip, software, computer and application enterprises, to support each other. ”°Loongson' s development has now a good support from the robust industry foundation, and how to join forces to make further advances is our main concern.”± He believed relevant chip makers, software makers, computer manufacturers and application enterprises should be integrated into the industry chain. Currently, Loongson is developed by the Institute of Computing Technology , CAS, and Jiangsu-based Loongson Menglan is working on the industrialization of Loongson, and manufacturing the computers using Loongson processor. Chinese Text

 

3G Mobile Communications

Ericsson Signs Big Deals with Two Chinese Telecom Carriers

On July 8, Ericsson signed an agreement on 2G/3G mobile equipment and services with China Mobile (contract price RMB6.8b)and China Unicom (RMB4.8b) respectively. Gao Hucheng, Vice Minister of Commerce, during his visit to Sweden witnessed the signing of deals. Under the framework agreement with China Mobile, Ericsson will continue delivering solutions enabling China Mobile optimize the network energy efficiency to achieve the reduction in carbon dioxide emission. Under the framework agreement with China Unicom, Ericsson will serve as the main supplier to help China Unicom upgrade its GSM network in 10 provinces across China , and supply GSM/WCDMA core network and wireless access systems for deployment in 15 provinces and cities, including transmission, IP and added value service platforms. Chinese Text

China Telecom to Procure 3G Smart Phones in August

Following the launch of a high-profile joint procurement of 3.6 million low-end 3G handsets, China Telecom announced that it will initiate public tendering process for procuring smart 3G handsets in August. Ma Daojie, General Manager of China Telecom Skywing, said that ”°in terms of 3G terminals, China Telecom will persist in two marketing tactics: promoting the widespread use of low-end 3G handsets, and introducing medium- and high-end flagship handsets.”± According to Ma, low-cost handset, smart handset and flagship handset constitute China Telecom's development strategy for 3G handset terminals. Chinese Text

MIIT Vice Minister: 3G Tariff Should Be Lower than 2G's

Lou Qinjian, Vice Minister of MIIT, said in an exclusive interview on July 7 that in recent years, communication revenues have been rising while rates have continued to fall, at an annual rate of 20%. He commented that despite the current stage of 3G construction requires an input of tremendous resources, still, 3G rates shall not exceed 2G rates. Lou believed that there is room for lowering long-distance phone fees and roaming fees. When speaking of TD, he said TD deployment is progressing well beyond expectations. Chinese Text

China Mobile Builds Southern Base

An all-round facility containing product R&D center, industry cluster promotion center, IT support and fault tolerance center, and services cooperation & exchange center, China Mobile's Southern Base is going to complete, and will start operation at the end of 2009. According to industry experts, the completion of the southern base marks the shift of China Mobile from a pure communication operator towards an innovative communication company focusing on system integration. Currently, China Mobile has come up with the world's level in network management, while the hardware support system and buildings it owns still cannot meet the needs of a would-be world-class operator. The objective of the first phase project is to establish and perfect the centralized monitoring and management center for the entire network. Chinese Text

Software

China Mobile to Open Online App Store

China Mobile is going to set up a mobile phone software application store, sources from the company said. This means China Mobile is planning to provide software, free and not free, for its 480 million plus users. This store, named Mobile Market, provides games, software, music, video and other contents for downloading. By the number of users, China Mobile is the global largest mobile operator. China Mobile previously said it will open a mobile phone software shop, and independent software developers can sell software products via this platform. Chinese Text

China's Digital Publication Industry Grew Rapidly

China 's digital publication industry achieved a total revenue of RMB 53b in 2008, a year-on-year growth of 46.42%, and the number is expected to exceed RMB 75b in 2009, according to Sun Shoushan, Vice Director-general of General Administration of Press and Publication. On July 7, the third Chinese Digital Publishing Expo was held in Beijing , and Sun showed up and made a keynote speech. He forecast that the next years will see an annual growth of 30% in users of digital publications, and an annual growth of 50% in digital publication revenues, a surprising growth far ahead of growth of other branches of the publishing industry. 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.

DISCLAIMER: The USITO IT Weekly is a free internal publication for the members of the United States Information Technologies Office (USITO) and certain friends of USITO. Subscription is by invitation only. IT Weekly is a publication of USITO which is solely responsible for its content. This publication may be distributed only by explicit permission from USITO. Please reply this email to unsubscribe from the circulation list. If you have any questions on the contents, please send a message to the chief editor of this publication via wenjie@usito.org.