No.400 November 27, 2009
Special Issues  

On November 20 Friday, USITO presented Dr. Chen Jinqiao of MIIT and Nicolas Fetchko of TIA for a 2-hour Telecom Law event in Beijing Capital Club, with the topic "Comments on the Latest Version of China's Draft Telecommunications Law". Dr. Chen compared the 2009 Telecom Law version with previous ones, and Fetchko addressed the key points in the TIA-USITO-ITI joint comment letter. Members please click here for the speech material of Dr. Chen.
Announcement: USITO staff will work offsite on Nov. Friday. Office calls will not be reachable but email will work.
Top Story

USITO Expresses Concerns on Three Chinese Ministries' Indigenous Innovation Product Accreditation Program

According to a post in the website of the Science and Technology Ministry (MoST), three Chinese ministries, namely the National Development and Reform Commission, the Ministry of Finance, and the MoST issued a joint circular on November 17, 2009, which was about to building a system for accreditation of national ¡°Indigenous Innovation Products¡± and carrying out the accreditation work. In order to accelerate the build-up of such system, the ministries also issued an appendix circular called the ¡°Instructions for National Indigenous Innovation Product Application Procedures¡±, which articulates the qualifications and procedures of applying for ¡°Indigenous Innovation Products¡±. It was stated that the purpose is to implementing the implementation rules of the supporting policies for the Mid- and Long-term National Plan for the Development of Science and Technology 2006-2020, and advancing the nation¡¯s indigenous product accreditation work, in accordance with relevant provisions of the Provisional Measures for the Administration of the Accreditation of National Indigenous Innovation Products.

The ¡°Instructions¡± circular states that ¡°six high-tech fields are selected for implementing the 2009 national indigenous innovation product accreditation work¡±, which are: 1. Computer and application devices; 2. Communication products; 3. Modernized office equipment; 4. Software; 5. New energy and equipment; 6. Highly energy-efficient products. The circular designates the provincial branches of the three authorities to carry out the four procedures of the accreditation work: 1. filing applications, 2. initial examination and recommendation, 3. examination of recommended products, 4. accreditation and announcement of accreditation decisions.

Article 4, the Accreditation Conditions, is especially noteworthy to the international society, because it would be almost impossible for foreign products to be accredited as ¡°Indigenous Innovation Products¡± according to the rigorous conditions listed in the seven conditions of the article, such as ¡°products must contain Chinese proprietary intellectual property rights¡±, and ¡°original registration place of trademarks under which products are sold should be within the territory of China¡±. In the ¡°Instructions for Filling the Applications¡± section of the circular, it requests detailed fillings of IPR origins, the ratio of foreign equity in the shareholding structure, as well as the registration status of the products¡¯ brand. A product that breaches any of the ¡°seven conditions¡± will not be eligible for entering appraisal process.

The three ministries have ruled that all applications and relevant documents concerning prospective national indigenous innovation products must be submitted to the NationalCenter for Application of Science & Technology Programs no later than 24:00 on December 10, 2009. So it is a short notice for all parties given merely 23 days available for filing applications. Source: MOST website, edited by USITO

(Thanks to three USITO member companies' sponsorship, we have arranged translation of the long circulars mentioned above. Interested members please send an email to us for a copy.)

USITO Notes: ¡°The Provisional Measures for the Administration of the Accreditation of National Indigenous Innovation Products¡± was a joint circular issued by the foresaid three ministries in December 2006. It has since served as a guideline for indigenous innovation product accreditation work. The ¡°seven conditions¡± were also outlined in the 2006 circular, the ¡°2009 Instruction¡± is actually quoting that one. It is understandable for China to issue any kinds of the indigenous innovation products catalog, the problem is, one of the main purposes of such catalog is to granting domestic products preferential treatment through measures like mandatory government procurement decrees.

This kind of circulars have spawned growingly pervasive policy making activities favoring domestic products in the local area, and led to the misunderstanding that government shall always ¡°buy domestic products¡±. For instance, the Director of Hubei Government Procurement Center confirmed on various occasions that Hubei Government had decided to exclude all products of foreign brand, regardless the manufacturing location, from government procurement (link). It is a worrying symptom and clear signal of protectionism to the world.

USITO as well as some other overseas organizations have since raised serious concerns on these biased perceptions to the Chinese authorities on the 2006 circular. Though we have seen positive turnouts in the latest rounds of JCCT and SED, such as China ¡°commits to treat, under its Government Procurement Law, products produced in China by foreign invested enterprises the same as products in China by Chinese enterprises¡°, this kind of implementation rules are rather frustrating to the progress. This Monday, the co-chairs of USITO¡¯s Trade and Investment Work Group held an emergency meeting with U.S. government officials to compare notes for the issue and brainstorm the next step. We would like to provide more details (to our members only) in next Thursday¡¯s USITO monthly policy call, please stay tuned for more details.


USITO Supports CAS Program on Promoting Standardization Awareness

As part of our outreach efforts with local partners, USITO has reached agreement with China Association of Standardization (CAS), a branch of the Standardization Administration of China (SAC), to support the CAS program of "Standardization Promotion in Campus". The purpose of the program is to improve the standardization awareness among Chinese college students and academia, which echoes USITO's mandate in advancing the Chinese ICT industries' standardization work. USITO's contribution in the program will mainly be the recommendation of speakers, and we have begun to approach the country managers and senior executives of our member companies to speak in the serial events. The program will kick off in mid-December with the first event scheduled to take place in Northern Communications University. You are welcome to contact us to attend the event or volunteer to coordinate your colleagues to speak in coming events. For more details contact wenjie@usito.org.

Member in the News: Bloomberg: Qualcomm Antitrust Probe Is Dropped by EU Regulators

Nov.24 - European Union regulators dropped a four-year-old investigation into Qualcomm Inc. after companies that accused the chipmaker of charging excessive royalties on technology patents withdrew their complaints.

"All complainants have now withdrawn or indicated their intention to withdraw their complaints," the European Commission said in a statement today. "In view of this, the commission doesn't consider it appropriate to invest further resources in this case."

The end of the case means Qualcomm, the world's biggest maker of chips for mobile phones, will avoid a fine or the possibility of being forced to cut royalty fees. In the most recent quarter, 74 percent of Qualcomm's operating income came from technology licensing. Detail

Monthly Policy Call Notice (Member Only)

Due to Thanksgiving Day this Thursday, USITO decides to postpone the November Policy Call to a week later: 8:00am, Thursday December 3rd BJ time or Wednesday December 2nd 7:00pm EST. Major topics for discussion will include the following:... (members please click here for detail)

Selected Chinese Media Reports
 

Regulations

MIIT to Institute Handset Internet filtering Standards

MIIT said it will work out a set of technical standards for filtering of Internet content to ensure the removal of porn information with the cooperation of telecom carriers. On November 25, MIIT announced 5 measures for regulating the business promotion channels of operators. Defining the responsibilities for handset Internet content access is an important part, including: 1. Access to unregistered websites is banned according to relevant regulations; 2. All the access websites must sign an information security management agreement; 3. Access service providers shall timely stop services for violating websites; 4. Access service providers shall regularly examine the content of access websites, and report any problems timely. MIIT also ordered the operators to complete an overall self-examination of charge agency services within specified time-limit. Chinese Text

China Cleans Up Mobile Porn Content

The Ministry of Industry and Information Technology has called for a cleanup of mobile porn Web sites nationwide this Wednesday. In an event, Mr. Su Jinsheng, Chief Engineer of the ministry blamed the rise of porn contents on high-speed mobile data services enabled by the launch of new technology, and said the ministry will work with the mobile carriers to hold back the situation. So far, the government has shut down thousands of illicit Web sites that publicize porn content and arrested dozens in a campaign against online pornography that is now increasingly shifting focus to mobile Web sites. Chinese Text

3G Mobile Communications

Mobile Carriers Spend $6.3 bln to Increase 3G Service

The three mobile carriers of China will spend a total of USD 6.3 billion in wireless infrastructure equipment by the end of 2009, an increase of 27.7%, according to iSuppli, the U.S. based market research company. The spending reflects the rapidly expanding 3G service in China¡¯s cities, iSuppli says, with more than 100 million subscribers expected by 2013. There were only 338,000 3G subscribers in China last year. The three carriers, China Telecom, China Unicom, and China Mobile, completed the first phase of their 3G network before August and should increase coverage significantly by the year's end. Chinese Text

MIIT Vice Minister: Two Key Issues for Information Industry

Xi Guohua, Vice Minister of MIIT, said at the international symposium on IT application and industrialization that the development of information communication needs to address two key issues concerning consumer rights and interests and technology evolution respectively. This symposium was co-sponsored by MIIT and ITU. Xi said in his closing speech that the integration of IT application with industrialization is of great significance. To promote the integration, greater efforts should be made to develop the communication industry and electronic information manufacturing industry, advance IT application in various sectors, and leverage information communication technologies to upgrade traditional industries. Xi also proposed two key issues that need to be addressed for the development of information communication: first, follow closely the market demands and protect the consumer rights and interests, and the regulatory work should be aimed to benefit the livelihood of the public; second, pay consistent attention to the evolution and development of mobile, Internet and 3G convergence technologies. Chinese Text

Huawei to Set up Innovation Center in Germany

Sources said that Huawei has signed an MOU with Jurgen Ruttgers, Governor of North Rhine-Westphalia, Germany to invest EURO 20m to set up an innovation center in D¨¹sseldorf. The construction of the innovation center will begin in 2010. Huawei also plans to recruit local employees and enter into technological cooperation with universities. The reason for choosing the city of D¨¹sseldorf is that Vodafone Germany, one of its key customers, is also located here. This August, Huawei and Vodafone Germany carried out an LTE joint experiment using the frequency range 790-862MHz. Chinese Text

Digital Media

Digital Media Industry Investment Fund Established in Zhongguancun

Beijing Zhongguancun Venture Capital Development Center, China Capital Management Group and Hina Group signed a framework agreement on November 23, under which the Zhongguancun Digital Media Industry Investment Fund will be established, with a total capital of USD100m. Sources said the fund will invest primarily in next generation Internet technology applications, innovative E-commerce, software development, online games and cartoons, interactive digital media, wireless Internet and handset games, and will give support to various value-added TD services. Zhongguancun is China¡¯s technology innovation center and high-tech industry development base, and has become the most vigorous place of venture capital activities. This March, the State Council approved the plan to build Zhongguancun into a science & technology innovation center with global influential. Chinese Text

Cultural Industry Becomes Strategic Industry in China

The 4th China Beijing International Cultural & Creative Industry Expo was held on November 25, and this is the first state-level cultural & creative industry gathering for international exchanges and cooperation. Cai Wu, Minister of Culture said in his speech that the culture industry has become a strategic industry in promoting the national economic development in China. The past year¡¯s experience proves that the culture industry will play increasing roles in responding to global financial crisis, satisfying the cultural needs of the people, promoting the harmonious development of man and society, and in optimizing industrial structure, creating jobs and promoting the growth of national economy. Chinese Text

Semiconductor

Infineon, Nokia co-operate on next mobile generation

Infineon has moved one step closer to supplying chips for high-end devices of Nokia by announcing a collaboration to create chips for the next mobile network generation. Infineon, which already supplies chips to Nokia - the world's largest maker of mobile phones - said on Wednesday the cooperation was aimed at making Nokia's current and future modem technology work with Infineon's transceiver chips. The company said this would create a product for the fourth-generation (4G) Long-Term Evolution (LTE) technology, the next step in mobile networks that will make possible wireless high-speed internet connections. The first such networks are expected for 2011. 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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