No.402 December 11, 2009
Special Issues  
USITO 2009 Year-End Appreciation Reception, Dec.17
- Final Call for MEMBER Signup -
USITO Policy Call Meeting Notes Dec.3 Thursday
Members Click Here
 

Please mark your calendars to join us in a very special evening of appreciation with our friends in Chinese government, partner organizations as well as our loyal members. We look forward to enjoy a fun evening with you at the end of the busy and productive year of 2009. We have prepared a special menu, drink selection, seasonal music and the exciting ¡°lucky draw¡± program! Click here for the notice
*********** This is a member only event ***********

Top Story

International Business Letter Voicing Concerns on Indigenous Innovation Product Accreditation Policy

On December 10, 2009, thirty-four international industry associations from across the world sent a joint association letter to the Chinese government, voicing deep concerns over China's newly released joint circular (Notice No. 618) posted November 15, 2009 that would implement an Indigenous Innovation Product Accreditation system. The letter says, implementation of such systems to certify the "indigenous innovation products" would restrict China's capacity for innovation, impose onerous and discriminatory requirements on companies seeking to sell into the Chinese government procurement market, and contravene multiple commitments of China's leadership to resist trade and investment protectionism and promote open government procurement policies.

As covered in USITO Weekly edition 11/20/2009, three Chinese ministries, namely the Ministry of Science and Technology, the National Development and Reform Commission and the Ministry of Finance issued a joint circular on November 15, 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.

As we analyzed in the weekly, such system, if adopted, would be almost impossible for foreign products to be accredited as ¡°Indigenous Innovation Products¡± according to 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¡±. A product that breaches any of the ¡°seven conditions¡± will not be eligible for entering appraisal process. The new policy thus runs directly counter to the commitment of Chinese leaders to pursue open trade and investment policies and avoid protectionism. Additionally, it would dilute China's commitment that its procurement policies were open to foreign invested enterprises and recognized the importance of non-discriminatory procurement policies.

USITO members please click here to download the 12/10/2009 Joint Letter.

Rural Computer Sales Campaign: High-end PCs to Be Promoted in Rural Areas

In late November 2009, Mr. Zhao Bo, Deputy Director General of MIIT, said that MIIT plans to lift the price cap of the government PC sales campaign in rural areas, which means more high-end computers will be introduced to the rural market under the "computers go to rural areas" program. MIIT will issue relevant new policies before the end of this year.

The "computers go to rural areas" program was launched by Chinese government earlier this year, which as part of Chinese government stimulus package aims to stimulate PC sales by offering 13 percent subsidy to electronics buyers in rural areas. The subsidy was offered only for purchase of computers priced below RMB 3,500.

Latest figures from MIIT stated that from January to October, sales of rural computers under the subsidy program reached 792,766 units, a growth of 98 percent compared with the same period of last year. Under the program, domestic vendors take a dominant position, such as Lenovo had a 40 percent share of the market. Source: Computer Daily, 11/26/2009

USITO Notes: With hi-end computers included in the rural promotion plan, foreign brand computers may be able to garner a bigger market share. In the previous rounds of promotional plans in rural areas, no foreign brand computers took a market share of more than 3 percent. Regardless of the factor of the unfair preference for domestic products (always interpreted as 'dometic brands'), homegrown vendors generally boast market advantages via price wars and stronger rural channels. With average rural family income keeps growing, the rural market needs more high end computers. Especially in China's developed coastal provinces rural computer consumers have stronger purchasing power. If foreign companies overcome the handicaps in the rural sales channels, they would be able to take bigger market share in the rural area.

Member in the News: China 'Ripe' For New BlackBerries

Canadian smartphone maker Research In Motion (RIM) said it would launch a customized version of the BlackBerry that supports China's home-grown 3G standard, as part of its latest efforts to expand in the world's largest mobile phone population.

The world's second largest smartphone vendor signed an agreement with China Mobile to deliver a BlackBerry model that supports China Mobile's TD-SCDMA network. The new handset, which would start shipping "soon", will be targeted at Chinese small companies and individual consumers, according to RIM. Detail

Knowledge Center: China and Global IC Industry Review 2009

Financial crisis has great impact on China's and foreign IC industry, but IC industry has shown
recovery signs.China¡¯s IC industry is down
26.9% in 2009 H1, the size is RMB 46.292 billion. Affected by Qimonda (Suzhou) company¡¯s production suspension, the decline of China¡¯s IC industry in 2009H1 is more serious than that of global IC industry. Members click here to download
(Disclaimer: The report is provided by 3rd party research firms for our members preview. )
Selected Chinese Media Reports
 

Regulations

Priority Measures Called for to Advance Information Industry  

The 2009 Chinese Information industry Economic Conference was held in Beijing, and Zhou Zixue, MIIT General Economist and Zhao Xiaofan, Director-general of Department of Software Services made keynote speeches. Lou Qinjian, Vice Minister of MIIT, said in his speech that the fundamentals sustaining the development of the information technologies and industry and long term upward trends remain unchanged. According to Lou, attention needs to be paid to the following areas in developing the information industry: first, focus on improving the industry policies and further implement the goals, missions and measures stated in the Electronic Information Industry Adjustment and Rejuvenation Plan, increase support from the government and expand domestic demands; second, focus on strengthening indigenous innovation, and step up the implementation of key S&T special projects and give further support to the R&D of critical technologies in IC, software and new display devices; third, focus on advancing IT application in the industrialization; and fourth, focus on cultivating new industries and accelerating the development of 3G, semiconductor lighting, energy efficiency industries, E-commerce, software service outsourcing and online cartoons, and encourage the application of photo-voltaic power generation and semiconductor lighting technologies. Chinese Text

MIIT to Formulate Mobile Phone Filtering Software Standards

As a general rule, anti-virus software are widely provided by mobile phone vendors and distributors, while anti-porn software products are rarely available for mobile phones. Currently, mobile phone porn content filtering is only realized by telecom carriers at random basis. To change the awkward situation, Su Jinsheng, General Engineer of MIIT, said MIIT plans to work with telecom carriers and relevant vendors on technical software standards for filtering of porn information on mobile phones. If China introduces the same Internet access channels for mobile phones as those for computers, it would be easier to regulate, according to Li Qiang, an expert from China Academy of Sciences. Chinese Text

Trade & Investment

National Digital Publications Center to Be Established

On December 9, the Founder Group signed a cooperation agreement with Shanghai-based Zhangjiang Group to build jointly Zhangjiang National Digital Publications Center, China¡¯s first state-level digital publications base. Sources said the cooperation ranges from mobile reading terminal R&D to operation of books portal to digital compound publishing technology projects. Zhangjiang National Digital Publications Center is the first national digital publications base constructed by GAPP and the Municipal Government of Shanghai, covering online games, cartoons, digital music and electronic books, with an annual output value of RMB7b. As a GAPP leader pointed out, this cooperation is a milestone marking the rapid development of the publishing industry in China. Chinese Text

Lenovo Supplies Computers for Copenhagen Climate Conference

The U.N. Climate Change conference opened in Copenhagen, Denmark on December 7, and Lenovo was selected to supply 2400 Thinkpad R500 computers for the conference. These computers have gone through the certification of GreenGuard and Climate Saver. ¡°I look forward to working with Lenovo, as I am convinced Lenovo can fit the stringent requirements of such high-level conference,¡± said Svend Olling, an official of the Ministry of Foreign Affairs of Denmark. According to him, the COP15 conference proves that considerations of environmental protection and climatic influence carry weight when choosing computers. Lenovo has been committed to developing green and environmental computers, and thus selected as computer supplier for a number of important international events including the 2008 Beijing Olympics. Chinese Text

3G Mobile Communications

ChinaMobile to Grant Subsidy for All TD Terminals

Data from MIIT shows that as of November 20, a total of 497 3G terminals have been awarded network licenses, including 218 TD terminals, 145 CDMA2000 terminals and 134 WCDMA terminals. According to China Mobile Chairman Wang Jianzhou, with the concerted efforts of parties involved, the number of TD terminals introduced to the market by the end of this year will hit over 100, and many foreign and domestic giants have rolled out their TD terminals, including RIM, Motorola, Nokia, ZTE and Huawei. Wang expressed his satisfaction with the growth of TD Market and improving functions of TD terminals. China Mobile needs large numbers of low cost TD terminals, preferably smart terminals, and encourages more low cost terminals to be manufactured, he said. Wang stated that China Mobile has made a policy to give subsidies to buyers for TD terminals supplied by vendors, and the subsidy plan will be announced in next March. Chinese Text

TD Frequency Range Widened

A China Mobile senior executive said that as a part of referential policies released by the government, TD-SCDMA was awarded a new frequency range of 50MHz, as well as a frequency of 120MHz for conducting experiment. An official from MIIT Radio Administration confirmed the news, saying that the new frequency range is between 2.33GHz~2.38GHz, primarily used for the follow-up development of TD and TD-LTE. This means China Mobile has possessed a 3G frequency range of 85MHz. Chinese Text

Nokia To Launch OVI in China

Nokia has announced to set up a joint venture with New Alliance, a Shanghai-based investment group, to operate the OVI mobile service platform in China. Nokia and New Alliance will each hold 50 percent stake in the joint venture. Nokia plans to attract 300 million users for its services by 2012. The Chinese market, which has more than 700m mobile subscribers and is seeing a roll-out of 3G services that is gaining momentum, as well as rapid growth in mobile internet, has potential to make or break such plans. OVI is Nokia's important move in the world's largest handset market, as part of Nokia's attempt to transform itself from a hardware vendor into a provider of services and content. Chinese Text

Semiconductor

First PDP Production Line to Start Mass Production

Sources from Sichuan-based Changhong said on December 9 that China¡¯s first PDP production line with a total investment of over USD2b will soon start mass production, with the yield rate hitting 85%. In the past years, China has had a heavy reliance on imported plat panels for TVs, and China¡¯s TV factories used to be assembly workshops for foreign panel vendors. In April 2007, this PDP project was approved, and progressed very well before the earthquake in Wenchuan, Sichuan in 2008. Due to the delay of equipment installation and debugging as a result of the earthquake, this project did not start operation until March 22. It is said that this PDP project will have a surprising production capacity, reaching 2.16 million in 2010, and 6 million panels eventually. Chinese Text

Internet

Search Giants Sign Self-Discipline Agreement

7 Chinese search service providers including Sohu, Sina, Netease, Baidu and Yahoo China signed a self-discipline agreement in Beijing on December 9. According to the agreement, no one can offer to spread, collect or establish link with websites or web pages containing porn information, and no Internet services including navigation, advertising, ranking and access are allowed for websites and web pages containing porn and illegal information. On December 8, a nationwide video conference was hosted by nine state-level authorities, to plan the actions against porn content and information on Internet and handsets in the next months, raising strict requirements for Internet service providers including search service providers. Currently, the most influential search service providers are largely concentrated in Beijing, and thus sign this agreement with a view to responding to the conference, and making search engines no longer a platform of spreading porn information. 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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