No.384 July 31, 2009
Special Issues  
USITO Kicks Off China Electronics Components Summit
USITO Press Release: Lin Jing Joins USITO
 

On July 28, representatives from USITO and China Electronic Chamber of Commerce (CECC) jointly kicked off the 2009 China Electronics Components Summit held in Diaoyutai Hotel of Beijing. As the most important one in China of its kind, the event attracted hundreds of reps from top Chinese electronics firms, government authorities, and industry associations. During the event, USITO was also invited to grant awards to the "2008 Top Ten Chinese Electronics Firms". Organizers' report

Top Story

Three-Ministry Directive Supporting Solar Energy

As part of efforts to resonate the ongoing U.S-China Strategic and Economic Dialogue, the key agenda of which include clean and renewable energy topics, Chinese government again announced big supporting measures for solar energy, by subsidizing 50 to 70 percent of investment in large solar energy projects.

On July 21, 2009, three ministries, namely the Ministry of Finance, the Ministry of Science and Technology and the National Energy Administration jointly issued a circular on "Implementation of the Golden Sun Pilot Projects", with the aim to "promote the development of strategic new industries including new energy, energy-saving and environmental protection, and cultivate new sources of economic growth".

According to the circular, the government will take a series of measures, including financial subsidies, technological support and other market means to support China's solar energy industry. The government will provide the maximum subsidy of 70 percent applies to projects in remote regions and covers investment costs for generation, transmission and distribution projects. Projects in other areas will qualify for a 50 percent subsidy. The three ministries also stated support for the development of key solar energy technologies, as well as the construction of solar energy infrastructure. Member click here for more details about the circular.

According to analysis of China's Caijing Magazine, the subsidies appear to be geared towards making more solar projects viable even if they sell their output at low rates. The subsidies also effectively provide a boost for China's producers of solar power equipment by stimulating large-scale plant construction, with the purpose of realizing economies of scale on domestic operations alone and becoming more competitive internationally. Caijing Magazine, 7/24/2009

USITO Notes: Tapping more sources of energy is growingly important for China as the second-largest consumer of electricity after the US. The country generates 80% of its electricity power from coal, one of the highest ratio in the world. Government has addressed this problem, and began pushing aggressively to raise the contribution of renewables to its energy mix. In the 2006-2020 development plan, it states the plan to spend RMB 3 trillion to develop renewable energy by 2020.

The new directive is aimed at making the cost of solar power competitive by encouraging the companies develop solar energy technologies. In this case, policy tools are mostly generous financial subsidies and low interest-rate loans. The government financial support will make more solar projects viable, and will effectively stimulate the production of more solar power equipment and realize economy of scale. However, experts see a need for more substantial efforts in promoting technology development, such as enhanced alignment with international players, because the bottleneck for Chinese enterprises remains in the lack of core technologies.

****** The First U.S.-China Strategic and Economic Dialogue Economic Track Joint Fact Sheet ******

Washington DC, July 28, 2009 - As special representatives of President Barack H. Obama and President Hu Jintao, U.S. Treasury Secretary Timothy Geithner and Chinese Vice Premier Wang Qishan concluded the first meeting of the Economic Track under the U.S.-China Strategic and Economic Dialogue in Washington today.? Detail


MIIT to Unify Mobile Phone Earphone Interface Standards

China Communications Standards Association of the Ministry of Industry and Information Technology (MIIT) has just published a unified standard for earphone interfaces of mobile phones and the standard, which will be officially implemented from September 1, 2009. At the early stage after the standard takes effect, it will not be mandatory, since a six-month transition period will be available to the mobile phone manufacturers.

Under the new standard, the wired earphone interfaces of mobile phones should use standard concentric connectors. By diameter of connectors, interfaces are divided into a 2.5 millimeter standard and a 3.5 millimeter standard. The specification of the 3.5 millimeter standard earphone interface is the same as those used on computers and many MP3 players. Concentric connectors that meet the new unified standard will have a standard wired earphone interface mark. tech.sina.com.cn, 7/27/2009

USITO Notes: Official interpretation says the unified standard is aimed at reducing as much e-waste as possible, and granting consumers much more choices in earphones. You'll no longer bother looking for a new earphone when you change your mobile phones, as old ones will always work under a universal standard interface. Efforts like this kind may also help lower the costs of mobile phone peripherals, since changeover cost for peripheral manufacturers is lowered. Synergies among the vendors are growingly important, as mobile phones are becoming the most popular consumer electronics product. We remain unsure about the impact on our member companies when they choose to conform to the new rules, such as the incurred setup cost. Interested members please contact jimmy@usito.org.

Software Sector Grows at a Slower Pace

China's software industry continued to grow in H1, but at a slower pace thanks to world downturn. The sector gained a total revenue of USD 427 billion in the first half, up 22.7% year on year. Though the rate looks not bad, but compared with the 30% plus growth rate of the same period last year, it is a significant drop. Detail

Member in the News: AMD Signs Cooperative Memorandum With Shenyang

USITO member company Advanced Micro Devices (AMD) has just signed a strategic cooperative memorandum with the municipal government of Shenyang, Liaoning province, marking the beginning of the company's strategic distribution in the northeastern market of China. Under the memo, both parties agreed to closely work in areas including industry application software, integrated circuits, digital equipment, industrial automation, high performance computing, and animation. Detail

Knowledge Center China Multi-Functional Peripherals (MFP) Market Q1 2009
********* Members click here to download *********
Selected Chinese Media Reports
 

Regulations

Household Appliances Trade-in Policy to Be Implemented

Sun Weimin, President of Suning Appliance, told the media that the Household Appliances Trade-in Policy will be implemented in 9 pilot provinces and municipalities in August. Previously in July, NDRC and Ministry of Commerce published the Measures for Implementation of Household Appliances Trade-in Policy, which announced 9 provinces and municipalities designated for implementation of the policy. Sources said that the 9 pilot provinces and municipalities are taking measures to prepare for the implementation. According to Sun, the implementation of the policy will greatly arouse the enthusiasm among consumers. Chinese Text

Software

CCPC: Number of Software Copyright Registration Balloons

Sources from China Copyright Protection Center said that driven by China¡¯s policies on intellectual property strategy, in January through June, the center received a total of 29804 cases of software copyright registration application, up 112.9% compared to 13999 cases last year, and 24748 cases were approved, a 100.4% growth year on year. According to the Administrative Measures on Certification of High-tech Enterprises (G.K.F.H. No.172, 2008) implemented last year, the successful registration of software copyright constitutes one of key indexes indicating an enterprise¡¯s IP rights. The Policies for Encouraging the Development of Software and IC Industries stipulated that from June 24, 2000 through the end of 2010, after a value-added tax of 17% is levied on software products developed and sold by enterprises as general taxpayers, the portion exceeding 3% will be refunded upon collection. These incentives aroused much enthusiasm of software enterprises for innovation. Chinese Text

Semiconductor

WAPI Wins Overwhelming Victory in China Mobile's Public Biding for WLAN

Sources said China Mobile¡¯s high-profile public bidding process for centralized procurement of WLAN equipment in 2009 has concluded and China¡¯s domestic WAPI equipment wins the majority of contracts awarded, making up over 90% of the bid¡¯s total market shares. According to relevant vendors, most of the WLAN equipment can provide WAPI functions. Some Chinese experts told the local media that comparing the two WLAN standards, Wi-Fi has obvious security loopholes, but WAPI is a WLAN technology specifically encrypted to address the Wi-Fi loopholes, and ¡°has proved to be reliable¡±. The bid results mirror China Mobile¡¯s support of China¡¯s proprietary national standard. Chinese Text

China Sets up Silicon Base

On July 29, the Ministry of Science and Technology proclaimed the Leshan Silicon Development and Byproduct Utilization Base, a state-level industrial base, and encouraged Sichuan-based multiple-crystal silicon enterprises to seize opportunities to increase technological innovation efforts, boost the indigenous innovation capabilities, and form a photovoltaic industry base in Leshan, Sichuan. Leshan is a city where the silicon production is most concentrated, and also the only state-level silicon base in China. Under the state plan, Leshan will strive to set up a base development pattern under which enterprises play important roles under the guidance of the government and worked closely with universities, and build a new energy industry development pattern featuring a hydropower-silicon-solar energy chain. According to overall objectives, three industry chains will be set up, including solar energy photovoltaic silicon industry chain, electronic grade silicon industry chain, and silicon chemical cycling industry chain. Chinese Text

  

Trade & Investment

Suning Becomes Direct Supply Channel For HP

Chinese electronics retailer Suning has signed a direct supply agreement with HP, making it the only direct supply channel provider for HP in China. With the agreement, the two parties are expected to achieve annual sales of RMB 1.5 billion in 2009 and total sales of over RMB 5 billion in the next three years. Sun Weimin, president of Suning, told local media that the establishment of a direct supply model with manufacturers will be a focus in the future development of home appliances channel providers. According to HP, the direct supply model will shorten the supply chain, so as to lower the prices of products. Chinese Text

Google China Market Share Lower Than 30%

Chinese market research firm Analysys International has published its latest report on China's search engine market, and the company states that the Chinese search engine company Baidu.com held 61.6% share of the market in the second quarter of 2009, followed by Google China with a share of 29.1%. According to the report, Baidu.com's market share saw an increase compared with its 59% market share in the first quarter of 2009. Google China's market share decreased to less than 30% again after its share in the Chinese market was over 30% for the first time in the first quarter of 2009. However, it still achieved a year-on-year increase of 64.5%. Chinese Text

3G Mobile Communications

China Mobile Inks TD Deals

On July 30, China Mobile hosted a signing ceremony in Beijing for its TD-SCDMA network phase 3 contracts, in which the company gave a briefing of phase 3 TD network. According press releases, China Mobile has signed TD equipment purchase framework agreements and purchase contracts with ZTE, Huawei, Datang/Shanghai Bell, Nokia-Siemens, Potevio and other vendors. At phase 3, about 42,000 wireless base stations will be delivered, involving 340,000 carrier sectors. China Mobile said that by the end of this year, the TD-SCDMA phase 3 project will be almost completed, covering 200 cities, including over 70% of cities over prefecture level. Chinese Text

Carriers' Network Upgrading Campaign

China Unicom WCDMA¡¯ s theoretical speed reaches 7.2Mbps, the fastest among three 3G networks, due to introduction of HSDPA technology. To come up with China Unicom, China Mobile and China Telecom launched upgrading tests for their existing 3G network. Six vendors including Datang Mobile, Potevio, ZTE and Huawei are preparing for China Mobile¡¯s TD-LTE outdoor tests, while China Telecom is working with Huawei, Shanghai-Bell, Motorola and ZTE on the upgrading tests of existing CDMA2000 EV-DO. According to the TD-LTE working group¡¯s plan, indoor tests will be first conducted, followed by outfield tests at the second phase and large scale outfield tests at the third phase. China Telecom plans to deploy version B commercial network in large cities. Chinese Text

China Mobile, Chunghwa Telecom to Cooperate on 3G

According to a Taiwan-based newspaper report, China Mobile and Chunghwa Telecom will hold negotiations on delivering 3G value-added services and applications cross-straits. The report said that China Mobile Chairman Wang Jianzhou is scheduled to meet with Lv Xuejin, Chunghwa Telecom Chairman in August, exchanging views on information service cooperation including vehicle navigation system. In April this year, China Mobile announced its plan to acquire 12% stakes in Taiwan-based FETnet, and both sides will establish a joint venture in Taiwan and Chinese mainland respectively to deliver value-added telecom services. 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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