No.395 October 23, 2009
Special Issues  
The Conference Board - China Sustainability Survey
USITO Roundtable with U.S. Int'l Trade Commission Officials
 

2009 China Sustainability Survey - The Conference Board China Center for Economics and Business is conducting a pioneer research project which includes a survey amongst global corporations with business operations in China. USITO members' participation is greatly valued. Please forward this invitation to an appropriate colleague who works most closely with sustainability issues in China and request them to participate. Start the survey right away!

Top Story

Government Solicits Comments on China RoHS Catalogue

On October 9, 2009, the Energy Conservation and Resources Utilization Department of the Ministry of Industry and Information Technology (MIIT) announced to the public the draft version of the first batch of the DRAFT Catalogue of Electronic Information Products (EIP) for Priority Control of Pollution, and invited industry comments to the Catalogue. The comments will be due by November 9, 2009. Please click here for the original Chinese notice, and member please click here to login USITO website for USITO¡¯s draft translation of the Catalogue.

According to MIIT, the draft Catalogue is formulated according to rules and requirements articulated in the two earlier regulations: the Measures for the Administration of the Control of Pollution by Electronic Information Products ("China RoHS") and the Procedures for the Formulation of the Catalogue of Electronic Information Products for Priority Control of Pollution.

The EIPs included in the first batch cover three categories: mobile phone terminals, telephone (fixed and wireless) sets and printing equipment connected to PCs. The hazardous substances to be restricted (or for the moment not restricted) in each of the products are listed and the corresponding HS codes for the EIPs are also provided. The regulation will come into effect ten months after the Catalogue is officially promulgated. MIIT website, October 2009

USITO Notes: USITO is preparing a submission in response to this issue by the end of next week, 30th Oct. Members wishing to provide comments through USITO would please reply to Ms. Jing Lin (JingL@usito.org) by 27th Oct Wednesday. We look forward to your sharing of viewpoints.

It is understandable that China as the world's largest manufacturer of electrical/IT products realizes products of such kind must address environmental and energy efficiency issues. MIIT has been in the past few years drafting China's own regulations by refering to international equivalents like the EU's RoHS version (the Restriction of the Use of Certain Hazardous Substances in Electrical and Electronic Equipment (RoHS). In March 2006, the former MII released the No.39 Circular - Measures for Administration of the Control of Pollution by Electronic Information Products (¡°China RoHS¡±), and in March this year, the China WEEE was made public - the Regulations on Recycling and Disposal of Waste and Used Household Electrical Appliances. Both regulations aimed at reducing/eliminating the use of toxic and hazardous substances in their manufacture, and regulating sales channels for this purpose, and informing consumers the environment/energy-related features. Now the first batch of products to be controlled under China RoHS will be available, U.S. information technology companies are concerned that the catalogue does not bring barriers to trade, and it harmonizes with global practice, is accompanied with workable and rational enforcement measures.

China Mobile Faces Big Challenges

On October 21, 2009, China Mobile announced year-on-year profit growth for the first three-quarters of the year. The company attributed the growth to the added users including many from rural areas, and the measures like the cut of call fees and raise of handset subsidies, especially on 3G handsets to attract 15.24 million users during the 3rd quarter. Its financial statement says "In the period, we leveraged on competitive advantages, overcame various challenges and continued to maintain favorable growth in the financial results."

In the first nine months, China Mobile posted a net profit of RMB 83.94 bln ($12.3b), 1.8% higher than a year ago. Third-quarter net income rose 2.6% to RMB 28.6 bln. During the period, the company's revenues rose 8.9% year-on-year to RMB 326.98 bln.

China Mobile is the world's No.1 mobile operator in terms of both profit and subscriber base. As of September 30, the company had 508.4 million subscribers, and garnered a total of RMB 83.9 bln in profit. tech.sina.com.cn, 10/20/2009

USITO Notes: Analysts doubt that China Mobile's profit rise in the third quarter may be difficult to prolong, since in the previous quarter, the company's net profit once dropped to RMB 30.1 billion from RMB 30.6 billion yuan a year earlier, thanks to competition from its rivals and the less-than-expected TD-SCDMA network performance. All of the three mobile carriers saw big pressure since late last year when they spent a total of USD 58.5 billion to expand their 3G networks.

Now the carriers bet on the rural market where ARPU and profit margins are much lower than those in urban areas. It is highly doubtful if China Mobile could sustain net profit growth in the next two years, given the slow takeoff of its TD-SCDMA system. International mobile phone vendors kept reluctant to devote much effort in developing TD phones, and users were always complaining about their experiences with the inferior TD data speed.

China Calls for Sino-US Cooperation on Clean Energy

Chinese Premier Wen said during the Strategic Forum for US-China Clean Energy Cooperation (October 21-23, Beijing) that China and U.S. should earnestly implement the agreement on the 10-year energy and environment cooperation framework they signed in June, 2008.

Wen added that energy efficiency and environment protection are both a basic strategy of China to achieve sustainable economic and social development and a major measure to cope with climate changes. Detail

Member in the News: TI Profit and Revenue Beat Wall Street Forecasts

Texas Instruments Inc. just posted better-than-expected third-quarter results, citing strong demand from every industry that uses its chips,from cars to computers and phones. The chip maker, whose shares rose 2.5%, also said results in the fourth quarter would be stronger than current forecasts by analysts. Chief Financial Officer Kevin March said PC, mobile phone and automotive customers were among those boosting production, but also noted that it was not unusual to see production increase in the third quarter in anticipation of the holiday shopping season. Detail
Selected Chinese Media Reports
 

Regulations

Draft IT Service Operation & Maintenance Standards Completed

A Digital China senior official said that China has completed the preparation of the draft IT service operation & maintenance standards which will be published soon. In April this year, MIIT's Department of Software Services established the operation and maintenance standards working group to draft the information technology service standards. According to experts, the completion of the draft standards marks the substantial progress made in IT service standardization work in China. Statistics released by MIIT show that in 2008, China's software technology service income hit RMB145.5b, a year-on-year growth of 40%. Chinese Text

Trade & Investment

State Council Calls for VC Funds to Support New Industries

Chinese Premier Wen Jiabao chaired on Oct. 21 the executive meeting of the State Council, where the current economic situation was analyzed and decisions made on the economic work in months to come. The meeting urged drafting of guidelines for promoting the development of strategic new industries, and creation of venture capital funds to support the development of new industries. According to the meeting resolutions, measures shall be taken to push forward structural adjustment and energy-saving and emission reduction, pay consistent attention to implementation of key industries adjustment and rejuvenation plans and implementation rules, urge enterprises to accelerate technological upgrading, and urge faithful implementation of State Council¡¯s SME policies. Chinese Text

Baidu Partners with China Unicom

Baidu announced on Oct.19 that it has signed a deal with China Unicom to deliver wireless search services to China Unicom¡¯s 3G subscribers. Under this strategic cooperation agreement, Baidu will provide all-round wireless search technologies to China Unicom, including WAP search and webpage search, while China Unicom will provide handset search services, jointly operated by both sides, on the homepage of mobile phone. In the future, they will work with each other on R&D of 3G wireless search technology, product innovation, brand promotion and industry standards. Currently Baidu has signed deals with Nokia, Samsung, Lenovo, MediaTek. Analysts comment that the partnership between Baidu and China Unicom will further enhance Baidu¡¯s strategy implementation in wireless search industry chain. Chinese Text

China's First Proprietary Printer to Be Unveiled Early Next Year

Sources from the Zhuhai-based Ninestar Technology Co., Ltd. told the media that the first printer with Chinese intellectual property is expected to make debut in the first half of the next year. Upon that time, Chinese printer vendors like Lenovo and Founder who have been placing orders on Brother and Samsung printers will turn to Ninestar printers. Ninestar is the only Chinese company that actively responded to and won the U.S. Section 337 Investigation Case brought by Epson. Chinese Text

3G Mobile Communications

MIIT Vice Minister Vows to Tighten Supervision over 3G Project Tendering

Miao Wei, Vice Minister of Industry and Information Technology, said that MIIT will increase supervision efforts to track and oversee the whole tendering procedures launched for new generation mobile communication projects. When speaking of issues of 3G project tendering, which are now the whole industry¡¯s concern, Miao said MIIT has released a series of supporting rules including Interim Provisions on Tendering Procedures for Communication Projects, and Sample Bid Invitation Documents for Goods Requested by Communication Projects, which are drafted in line with the Public Bidding Law and based on a consideration of actual conditions. According to Miao, MIIT will enhance supervision actions, and investigate and punish violations. Chinese Text

Global Mobile Operator Rankings: ChinaMobile Comes In First

Portio Research, a market research company, published the rankings of global mobile operators in terms of income comprising services and terminal sales. China Mobile ranks number one, with a market value totaling USD575b, followed by AT&T of U.S., with a market value of USD493b, and then Verizon, NTT DOCOMO and Sprint. China Unicom comes in at 20, with a market value of USD100b. The rankings are based on the 2008 statistics. 600 mobile operators attended the survey. Chinese Text

ZTE Sets Up 4G Lab in North America

Sources said that ZTE has set up an LTE (4G) lab in Dallas, U.S., whose current R&D focus is on CDMA/LTE dual mode. Open to the public now, the lab has conducted the first dual-mode service demonstration, ¡°CDMA voice + LTE HD video¡±, and gained the recognition of North American visitors. The lab is planned and constructed in line with the testing requirements of world-class operators, and can work on such test items as throughput, delay, coverage, services quality and mobility management. According to Jiang Xiangyang, GM of North America Region, ZTE¡¯s North American lab can serve as a bridge to facilitate the understanding of ZTE by local telecom operators, and accelerate the cooperation process. Chinese Text

Semiconductor

China Reaps Progress in Next Generation Internet Storage System

Next generation internet information storage architecture and associated core technologies, a major project jointly undertaken by Huazhong University of Science and Technology, Tsinghua University, Peking University, and Wuhan University under the National 973 Program, is created to develop a new storage mode for meeting the information storage needs of next generation internet. According to the website of the Ministry of Science of Technology, Chinese researchers have so far achieved numerous laudable results through 4-year efforts for the scalable multi-level storage system, including elaborating the behavior of network data storage, establishing a theoretical framework for self-assembly object storage system, and developing a range of core technologies for super large scale online storage system metadata management, and for relevant document mining. Researchers have also built a 500TB experimental storage platform connected to CERNET2 for both theoretical and methodological studies. Chinese Text

China to Lead International Standards Setting for Internet of Things

Ma Xiaodong from Wuxi Sensor Network Engineering Center of Chinese Academy of Sciences said in an interview that China is now on the cutting edge of sensor technology and has been among nations dominating the drafting of international standards, including Germany, U.S. and U.K. CAS¡¯ s Wuxi Sensor Network Engineering Center located in Wuxi of Jiangsu is currently China¡¯s technology research center for Internet of Things. China¡¯s Premier Wen Jiabao proposed on his Wuxi visit on August 7 that the development of Internet of Things be considered a part of the state strategy. Due to sound microelectronic and semiconductor infrastructures, Wuxi is now leading the sensor field in China and a sensor network center will be set up here. The Internet of Things can be widely used in such fields as smart traffic, environmental protection and public security. Experts predict that the Internet of Things technology will be popularized in the next 3-5 years, forming a high-tech market worth RMB 1 trillion. Chinese Text

Largest TFT-LCD Production Line Base Launched

With the implementation of BOE¡¯s eighth generation TFT-LCD project on Oct.19, China¡¯s largest TFT-LCD production line base was launched. The project, upon completion, will eliminate much of needs for imported large-sized LCD panels. With a total investment of RMB28b, the project is expected to take 26 months. The product line will produce display screens and modules for LCD TVs. Chinese Text

Information Security

State Loophole Database Starts Operation

China Information Technology Security Evaluation Center announced on Oct.18 that China¡¯s information security ¡°state loophole database¡± started operation, and would provide loopholes analysis and risks evaluation services to the outside. A system under which loopholes are collected, analyzed and reported is established to deliver information security loophole analysis and risks evaluation services to government departments, industries and other organizations, so as to boost China¡¯s threat response and risk management capabilities. According to Wu Shizhong, Director of China Information Technology Security Evaluation Center, the construction of the State Loophole Database is a fundamental and long-lasting task in the information security assurance work. Large numbers of current network divulgence cases and information security issues are closely associated with loopholes. In the press release conference, four domestic infosec companies were awarded the first batch ¡°Indigenous Creation Certification¡± of national infosec products. 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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