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No.391 September 18, 2009
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| Special Issues |
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| USITO Event Featuring Michelle O' Neill, Acting Under Secretary of DOC
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2009 PTExpo Opens in Beijing, Sept.16-20
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USITO is honored to host an exclusive event featuring Michelle O¡¯Neill, the Acting Under Secretary for International Trade of the U.S. Department of Commerce (DOC). Michelle is part of a senior U.S. trade delegation meeting with the Chinese government including MIIT to prepare for next month's JCCT. The event will be held from 8-9am, Friday 25 September 2009. As seats are limited, please register with us asap. For more details please click here for the notice.
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| Top Story |
Authorities to Strengthen Control on Foreign Investment in Internet Sphere
In July 2009, the General Administration of Press and Publication of China (GAPP) released a directive titled "Notice About Strengthening the Censorship Management For Imported Online Games", which states that GAPP as the exclusive Chinese Internet game authority will strengthen the censorship on foreign Internet game products. It rules all foreign enterprises shall obtain licenses from GAPP before "publishing and operating any online games within Chinese territory". Mr. Sun Shoushan, Vice Minister of GAPP, later interpreted the directive in a Shanghai event that "GAPP encourages foreign enterprises to joinly develop Internet games with domestic Chinese companies", however, "GAPP strictly forbids foreign enterprises from operating Internet games in China, through either wholly-owned foreign enterprise (WOFE) or joint ventures".
GAPP then took prompt actions following the announcement of the new rule. Its website alleged that as of end August 2009, up to 71 Internet games (out of the total 200 plus), most of which being foreign games, were found "illegal" and thus received due punishment. They were asked to stop operation immediately and submit "review and improvement proposal" to the authorities.
A few weeks earlier, two other ministries, the Ministry of Culture and the Ministry of Commerce jointly formulated the "Notice About Strengthening the Administration Work on Virtual Currency of Internet Games", another signal that Chinese authorities are strengthening control over the Internet sphere.
GAPP is currently the Chinese top authority overseeing "Internet Publication Field". The "Internet Publication Administration Regulations (Interim)" of China rules that GAPP assumes authority in this field which covers four areas: 1. Traditional publication houses' online businesses; 2. Web-based publication businesses including Internet news, literature, games, music, etc.; 3. Comprehensive websites' special columns such as e-magazines and e-books; 4. Digital libraries' Internet publication activities. In recent months there were signals that GAPP has been strengthening control on Internet by imposing more restrictions on foreign players' involvement in Internet, especially that in mobile phones. Source: www.GAPP.gov.cn, xinhuanet.com, compiled by USITO
USITO Notes: There are growing concerns amongst Chinese top authorities that China's Internet sector might be dominated by foreign investment. A government agency, the China B2B Research Center, released the "Investigation Report on Foreign Investment Control on China's Internet Sector" on June 5, 2009 (link), which states that in the past ten years "foreign investment has taken over China's Internet industry". The report says this situation would threaten China's national information security, as well as pose negative impact on the government control on media. It then lists three counter measures to bar foreign investment: strenthen macro control (no longer encourage market-oriented development); encourage domestic capitals flow into Internet sector; promote "indigenous innovation" by listing Internet companies in domestic stock markets.
So it is no strange that the government now attempts to "regain the control on Internet". From a number of sources, we also heard that GAPP is currently looking to clarify restriction of foreign invested companies in the mobile Internet sphere. The mobile Internet being the next behemoth is by no means less important than traditional cyber channels. New Internet media are quickly becoming an area for rapid growth for many technology companies globally, which are providing their customers with online value-added services via mobile platforms. This may include online news, picture sharing, video sharing, online games, music, application, and gaming download services etc. For example, of China's 640 million mobile subscribers, over 39.6% also receive the China Mobile "Cell-Phone Newspaper", a daily news publication sent to subscribers. Official statistics and various public statements have shown that growth in the area of mobile and digital content creation vastly outpaces that of traditional media, which of course is a trend seen globally as well. As this protectionist trend will affect some USITO member companies' operations in China, USITO has published a briefing report about this, members please click here for the full text. We also plan to approach competent government authorities for more clarification, you are welcome to contact us for more details.
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The First US-China Economic and Trade Forum Kicks Off in Chicago
On Sept.7 Monday, the US-China Economic and Trade Cooperation Forum opened in Chicago. Participants to the event include senior level trade officials from both countries, industry executives, and association representatives. The theme of the event was for greater cooperation in trade and industries between the two countries.
The Chinese side was headed by Yu Ping, Vice Chairman of China Council for the Promotion of International
Trade (CCPIT). In a keynote speech, Mr. Yu said that Chinese and American businesses
should strengthen communication and cooperation and join hands to transfer
crisis to opportunities and create a better future, measures could be to strengthen equal dialogue, expand regional exchange, make efforts to make trade
and investment more convenient; and continually promote cooperation in green areas and promote
the sustainable development.
Dr. Robin Li, CEO and founder of Chinese online search engine Baidu.com, gave a speech representing the Chinese industries. He said the
financial crisis actually offers great opportunities for companies to speed up
their development and Baidu is a good example.
The U.S. side participants included William Zarit, minister counselor for commercial affairs, Department of Commerce of the US; Frank Lavin, former US under secretary of commerce; Haley Barbour, Governor of
Mississippi and former Senator Adlai Stevenson. Zarit in his speech introduced Invest American and Access America programs which are designed to help foreign investors and business people to come to the US for business development.
The one-day event was jointly hosted by CCPIT and the
US-China Chamber of Commerce. According to the organizers' press statement, the event aims to explore critical bilateral trade and investment topics and complement ongoing efforts by the two governments to promote common solutions to global challenges and strengthen relations. Source: Xinhua News Agency, 9/14/2009
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U.S. Chamber: U.S. Protectionist Measure Harms
In a latest report released by the U.S. Chamber of Commerce, the Chamber warned that the United States risks losing over 570,000 jobs in one or two years due to protectionist measures, including the "Buy America" provision attached to the large stimulus package,
There is no need to adopt such aggressive measures, Chamber Vice President John Murphy said. He made such remarks when commenting on U.S. President Barack Obama's approval of tariffs on Chinese tires in response to a petition filed by union workers who blamed the imports for up to 5,000 lost jobs in the past five years.
Murphy urged China and the U.S. to solve disputes at the World Trade Organization and to prevent an escalation of the trade tensions between them. Caijing.com.cn, 9/15/2009
Member in the News: Nortel Gains in Resurgent VOIP Market
Nortel Networks, which has spent much of the year selling off portions of its business, regained its position at the top of a resurgent voice over IP market in the second quarter, according to analyst firm Dell¡¯Oro Group. Detail
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| Selected Chinese Media Reports |
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Regulations
GAPP to Digitalize Publication Industry
Sources told the media that General Administration of Press and Publication has lodged a funds application with the Ministry of Finance to push forward digital transformation of traditional publication industry. The proposed digital transformation program will cost RMB630m, and will be unveiled soon. Sun Shoushan, Vice Director of GAPP, once announced that one of the key tasks of GAPP in the future is to propel the digital transformation of traditional publication industry, via implementation of preferential policies and key projects. According to insiders, this implies traditional publication industry will be given key support from the government since the release of the Eleventh 5-Year Culture Development Plan. Chinese Text
Trade & Investment
2009 Science & Technology Input Grows 25.6%
The State Council Information Office held a press conference on Sept. 17, giving a briefing on the major achievements China has made in science and technology in the past 60 years. MOST Vice Minister Li Xueyong said that in 2009, RMB 146.1b has been granted from the central government budget as the science & technology investment, up 25% over 2008. Li pointed out that to promote the development of science and technology undertakings, and give play to the roles of science & technology in social and economic development, science & technology investment is a top priority. Compared with RMB 56 million granted in 1953, the 2008 national science & technology investment exceeded RMB 240 billion. In addition, the S&T investments in various provinces and municipalities all increased by a large margin. Chinese Text
Global IT Competitiveness: China Ranks 39th
The business Software Alliance and Economist Intelligence Unit jointly published the 2009 global IT competitiveness rankings report Thursday. Among 66 nations and regions on the rankings, U.S. still ranks number one, followed by Finland and Sweden; China comes in at 39 place, up 11 from last year¡¯s rankings, while India is at 44, up 4 from last year¡¯s rankings. The rise of China¡¯s place is largely attributed to rising scores in R&D environment and human capital. The report pointed out that China and India have large numbers of IT specialists, showing convincing advantages among the emerging markets, but lack of IT infrastructures still remain important factors hindering the IT competitive capabilities of China and India. Chinese Text
Lenovo Eyes ASEAN Market
According to a foreign media report, Xu Guangming, a Lenovo senior official in charge of ASEAN market, said that Lenovo will, depending on its effective business mode, streamlined business structure and increasingly innovative products, aim to widen its market in ASEAN. It is reported that Lenovo¡¯ s brand ranks 4th in the entire ASEAN PC market, and 3rd in Singapore, having over 80 retail stores. Chinese Text
3G Mobile Communications
Datang Launches First TD-based E-book
Sources from 163.com said that Chinese telecom equipment provider Datang Telecom Technology Company has launched three new communications products, including the world's first electronics reading device based solely on the TD-SCDMA technology. The company's new products also include a mobile phone service that allows users to change their mobile phone interfaces at any time and a new gaming mobile phone named U-game. Chinese Text
ITU: TD Needs to Go Out
According to a Reuters report, ITU said Wednesday that China¡¯s proprietary 3G mobile network standard (TD-SCDMA) must go to international market to prove its success. TD-SCDMA needs to face a test in application, and has to get over many obstacles. Zhao Houlin, Vice Secretary-general of ITU is quoted by the report as saying, ¡°Promoting TD in Chinese market alone is not enough to succeed, and it should go to overseas markets.¡± Analysts believe that slow-footed promotion of TD standard is due to fewer choices of TD handset types and poor network infrastructures. Chinese Text
Lenovo Unveils OPhone
On Sept. 16, Lenovo announced the availability of OPhone handset developed together with China Mobile. Lenovo and China Mobile expect OPhone to compete with Apple¡¯s iPhone. Huang Xiaoqing, President of the Research Institution of China Mobile, voiced his ambitions for OPhone handsets, saying, ¡°We expect OPhone to gain at least 50% of smart handset market in China in the next 3-5 years.¡± OPhone handsets will incorporate the operating system developed by China Mobile, and operate on the TD-SCDMA 3G wireless technology platform developed by China Mobile independently. China is currently the global largest mobile market, having 700 million mobile users. Chinese Text
Semiconductor
TD Handset Chip Shipment Exceeds 5 Million
Yang Hua, Secretary-General of TD-SCDMA Alliance, said at the P&T Wireless & Networks COMM China 2009 on Sept. 16 that China Mobile-dominated TD-SCDMA industry has witnessed much progress in chip production. Currently TD chip shipment has exceeded 5 million pieces, the number of TD chips sold in the market exceeds 2 million, and this marks the commencement of large-scale promotional period for TD handsets. Yang Hua pointed out that although the TD industry has a shorter history than WCDMA and CDMA2000, it has shown a unparalleled momentum of growth. Since China Mobile delivered 3G services, growth of users has been very slow as a result of lack of handset types and unsound industry chain. Chinese Text
Proprietary HD Disc Products Unveiled
On Sept. 17, China High-definition Disc Industry Promotion Alliance unveiled new generation high-definition disc products which support China¡¯s proprietary AVS and indigenous copyright protection DKAA system, and this marks the rapid development of China¡¯s HD industry after a year¡¯s R&D efforts. According to experts, as the blue laser with a wavelength of 405nm is adopted for high-density storage, CBHD discs improve a lot in memory capacity. Wang Ju, Executive Chairman of China Audio & Video Association said that currently China¡¯s disc content providers, disc makers, disc manufacturing equipment suppliers, disc player vendors, player parts suppliers and hardware & software sellers make up an integral China Blue Disc industry chain. Chinese Text
Software
CDC Software Buys U.K. Software Maker
CDC Software announced on Sept. 13 that it has completed the acquisition of WKD Solutions Ltd. a U.K.-based supply chain software maker. This is another key move of CDC Software following the successful acquisition of Ross, Pivotal, and Respond. WKD is a provider of solutions for supply chain event management and business activity monitoring, focusing on helping enterprises increase supply chain transparency, and supporting their management, risks control and compliance demands. In February this year, CDC Software signed a framework acquisition agreement with WKD. Chinese Text
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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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