No.397 November 6, 2009
Special Issues  
Comments on China's Draft Telecommunications Law
Comments on China's First RoHS Catalogue
 

USITO by closely working with its parent associations and member companies has finalized two submission letters to the Chinese government, which are respectively about the RoHS (Restriction of Hazardous Substances) catalogue issue and draft Telecommunications Law. Please click the links provided in the left column to download the final letters. For any questions, you are welcome to contact USITO Policy Analyst via JingL@usito.org.

Top Story

Turf War Escalates Amongst China¡¯s Online Game Regulatory Bodies

On November 2 Monday, the General Administration of Press and Publication (GAPP) of China announced that it decided to suspend the approval of the World of WarCraft (WoW), a product of the U.S. company Blizzard Entertainment. This means WoW was blocked by the Chinese government, and any official operation from now on is deemed ¡°illegal¡±.

Shortly after GAPP¡¯s public announcement, another authority for China¡¯s online game sector - the Ministry of Culture (MOC) held a series of press conferences to open fire on GAPP, alleging the latter one¡¯s decision was ¡°an act out of bounds¡±. According to MOC, WoW is qualified to operate in China, as MOC has already examined the content of the game and approved the operation of the game. The latest conference of MOC was held on the afternoon of November 3 Tuesday, when Mr. Li Xiong, Director General of Cultural Market Department of MOC, said that according to the State Council¡¯s ¡°San Ding Spirit¡± (Three Definitions on the Roles of Competent Authorities) defined in July 2008, the MOC is the exclusive authority over online game sector. MOC will appeal to higher central authorities for GAPP¡¯s misconduct.

By counterattack, GAPP officials replied to MOC that all its decisions were justified, since they were "also" based on legal grounds of the ¡°San Ding Spirit¡± of the State Council. The Spirit grants GAPP the power to supervise online games before the Ministry of Industry and Information Technology (MIIT) issues Internet content licenses to them.

With more than 11.5 million (as of December 2008) monthly subscriptions, WoW is currently the world's most-subscribed MMORPG (massively multiplayer online role-playing game); it also the most popular and profitable online game in China, with over 1 million subscribers (some sources say 4 million). The game was only re-launched in China this Summer after months' of suspension, due to the shift of Blizzard¡¯s Chinese partner and regulatory uncertainties. tech.sina.com.cn, 11/3/2009

USITO Notes: Surprisingly, it is rare to see two Chinese ministry-level authorities open fire to each other in the public. Internal quarrels happen a lot amongst the authorities wherever they see money on the table, but mostly hidden in darkness and secrecy. Chinese netizens have left numerous messages in bbs and blogs that this is an ¡°embarrassing scandal¡± for the authorities.

Someone has to be sacrificed again: for the obsessive Chinese WoW fans the disapproval means another round of endless wait. Until GAPP and MOC reach some sort of a solution, such as a better way to cut the melon, WoW will remain a myth on the ground. Bureaucratic interest always transcends public interest under the current system. So the case may prompt the central government to reconsider their government restructuring campaigns (in March 2008 China just underwent an unprecedented large scale ministry restructuring). Given many other turf war cases between ministries (such as mobile TV battles), China probably needs another round of such campaigns further define the boundary of the authorities' responsibility.

Creating a single and independent regulator is one of China¡¯s commitments to comply with its WTO obligations. We from the industry perspective continue to encourage the Chinese government take measures to streamline its regulatory framework for all ICT sectors.


USITO Solicits Member Comments to SAC

On November 2, 2009, the Standardization Administration of China (SAC) issued a notice in its website, inviting comments to the "Management Rules About Formulating National Standards Involving Patent Issues". The notice states, SAC welcomes industry comments to the Rules, with an aim to "fairly handle the issue of patents involved in national standards, regulate the process in coping with patents when formuting standards, encourage indigenous innovation", etc. The deadline for submitting comments is November 30. Details of the notice can be found here.

This issue will be of significant importance to USITO member companies operating in China. A salient characteristic of it is, the Chinese standardization efforts are dominated by the government, unlike western countries (industry leads), so the government may take actions on involved patent issues that are hardly acceptable to the industry. As standards are for public use while patent is basically private, it is always a challenge to fix their relations especially in China. We are now translating the circular (to be available before Monday next week) and coordinating the members' comments. Interested members please contact us to get looped in.

2009 Internet Conference: Netizens Rise to 360 Million

During the "2009 China Internet Conference" in Beijing, MIIT Minister Li Yizhong said Chinese netizen base has grown to 360 million, in addition, there are 3.2 million websites located in China, with international bandwidth reaching 730G. Mobile Internet users rose to 192 million, growing 62.7% y-o-y. The number of telephones surpasses 1 billion, with 324 mln fixed-line users and 720 mln mobile users. MIIT.gov.cn, 11/4/2009

Uniliver's H.S. Code Violation Issue

According to a Caijing Magazine report,?Unilever, a multinational manufacturer of food and personal care products, went to trial on Oct. 29 in Shanghai, for suspected customs fraud.

Early in 2008, the Shanghai Customs found that products from the company had used the wrong HS code in the declaration of a key ingredient since 2002. The HS code or Harmonized Commodity Description and Coding System, is an international classification system for traded products. Unilever's import agents were found to have declared an ingredient in another name using different H.S. code. While the related chemical composition is similar, the tariffs between the two products are largely differnet. Detail

Member in the News: Nokia Siemens, Neusoft Enhance JV To Target 3G Opportunities

Nokia Siemens Networks and Neusoft said Thursday they are enhancing their partnership to effectively address China's growing mobile applications market. Detail

Selected Chinese Media Reports
 

Regulations

Authorities to Enact Financial Support Policies

A Ministry of Culture official said when attending the third Cultural Creative Industry Investment & Financing Forum that MOC is working with PBOC and China Securities Regulatory Commission to enact related financial policies encouraging the development of culture industry. According to the official, a working group is formed of the Publicity Department of CPC Central Committee, MOC, PBOC, China Banking Regulatory Commission and CSRC to consider financial support policies, including the mechanism of subsidizing loan interest. At the same time, MOC is planning to build a culture industry information platform to address investment and financing problems of cultural enterprises. Chinese Text

MIIT Vows to Support Value-added Telecom Services

Xu Qian, an MIIT official said at the 2009 China Mobile Internet Summit that MIIT as the regulatory authority functions to maintain the telecom market order and promote the industry development, and at the same time, will make greater efforts to support and encourage the development of value-added telecom services. He proposed three guidelines for maintaining the telecom market order. First, encourage behaviors of protecting the legitimate rights of users and following the market rules. Second, pay priority attention to control of spam short messages, Internet spam information and porn information on mobile Internet. Third, give full play to roles of industry associations. Chinese Text

3G Mobile Communications

Huawei Wins Big Contract

Norwegian operator Telenor announced that Huawei has been chosen to replace its wireless network infrastructures across Norway. Sources said this is a 6-year contract involving about 9000 base stations. This time Telenor selected two vendors for implementing its nationwide wireless network infrastructure replacement project, and Huawei will serve as the exclusive supplier of wireless network facilities. Telenor said that ¡°technology quality and reliability for implementing the large scale equipment replacement project, and commercial conditions¡± are decisive factors for choosing these two vendors. The scope of contract covers delivery of equipment of different technological systems and frequency ranges, and Huawei¡¯ s 4G base stations will totally take the place of existing base stations to launch the deployment of 4G network so as to increase network capacity and raise the data transmission rate. Chinese Text

Software

Microsoft Partners with ABC

On November 3, Microsoft and Agricultural Bank of China signed an MOU on strategic cooperation. According to the MOU, Microsoft will contribute its leading industry solutions, globalized enterprise service capability and resources to help ABC improve its development strategy and IT plans. A series of specific cooperation programs will soon be launched, including new-generation online bank system, new-type multimedia operations terminal system and bank portal, to help ABC improve its IT basic management platform and implement application solutions so as to boost customer service capabilities. Microsoft will continuously utilize its superior resources to assist ABC with planning of the information system and setting of technical standards, help ABC improve its core competitiveness and achieve enterprise development objectives. ABC officials said that the strategic partnership between ABC and Microsoft will help build a new win-win business mode driving the development of ABC, and advancing the application of Microsoft¡¯s technical platform in Chinese financial service field. Chinese Text

Software Anti-Piracy Forum Opens

China International Software Copyright Forum was held in Beijing. To achieve the objective of strengthening anti-piracy public awareness, delegates from the software industry association and software firms voiced their opinions on how to better protect software copyright. ¡°Software copyright is the lifeline of software,¡± said Hua Pinglan, Vice Chairman of China Software Industry Association, who called for increased enforcement efforts against software piracy and infringements. According to Sun Yan, Secretary-general of China Software Alliance, special service provided by vendors during the promotion activities to satisfy personalized demands of customers can effectively eliminate pirated software. Chinese Text

ZWCAD Wins Contract from Aviation Giant

Lufthansa chose ZWCAD for providing CAD software services to assist the leader of the global aviation industry in designing technical solutions. Industry comments say China¡¯s CAD industry is revealing its considerable strength. The fact that more and more international giants signed deals with ZWCAD demonstrates the potential and strength of Chinese excellent CAD brand. According to ZWCAD officials, the company is applying for approval of patents for many of its proprietary technologies, and this will allow Chinese CAD vendors more say in some technical fields. ZWCAD is the largest CAD vendor in China, and among the global top 2D CAD vendors, delivering services to 75 countries and regions across five continents. Chinese Text

Internet

MIIT Minister: Internet Industry Chain Takes Shape

The 2009 China Internet Conference was held in Beijing on November 2. Li Yizhong, Minister of Industry and Information Technology, showed up at the conference, and gave a keynote speech, saying that as a result of increasingly improved Internet infrastructures, continuously rising technical levels and widened information resources and service applications, the Internet industry chain has taken shape in China. Even in the context of financial crisis, China¡¯s Internet industry still maintained rapid growth. According to Li, the current Internet dynamics are characterized by increasing numbers of Internet users, increasingly further application of networks in various sectors, rapid development of E-commerce and accelerated development of mobile Internet. Li believed that with the continued growth of mobile phone users and handset netizens, 3G¡¯s advantage in network bandwidth and plentiful supply of terminals will present good opportunities for the growth of mobile Internet, sparking new economic growth mode and source of growth. Chinese Text 

2009 China Internet Conference Concludes

The 2-day 2009 China Internet Conference concluded in Beijing on November 3. This conference was held at a critical juncture of economic rebound, and was therefore themed ¡°Crisis, Opportunity and Upturn --- China Internet Power and Confidence Under Financial Crisis¡±. During the two day conference, 14 forums were held on different subjects covering network video, network community, e-commerce, new network media, online payment and online marketing. Chinese government paid much attention to this conference. MIIT Minister Li Yizhong showed up at the conference, and gave a keynote speech. He analyzed the new situation of the Internet industry, and pointed out the way for the development of Internet in China. Chinese Text

China's Science Papers Rank Second

A report released by Thomson Reuters on November 2 said that the number of China's scientific search papers ranked global second, following U.S. According to the report, China published about 20,000 papers in 1998, and the number climbed to 112,000, while the number of papers in U.S. grew from 265,000 to 340,000 in the same period. China has pushed past Japan, U.K. and Germany. The report¡¯s analysis showed that Chinese papers concentrate on material science, chemistry and physics, and the attention paid by China to innovative materials may produce far-reaching influence. 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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