China’s political advisers called for updating the country’s traditional paper-based publishing industry by digital means in light of the rapid development of information technology.

A special investigation group, composed of members of the National Committee of the Chinese People’s Political Consultative Conference (CPPCC), is in Shanghai to conduct field research about China’s publishing industry.

The 11-day investigation in Shanghai and the southwestern Sichuan Province, organized by the Education, Science, Culture and Health Committee (ESCHC) of the CPPCC, focussed on reform and innovation of the publishing industry.

In Shanghai, delegates visited the Shanghai Century Publishing Group (SCPG) and Shanghai Xinhua Media. Both have taken the lead in reforming and modernizing the traditional publishing industry.

The SCGP has published many digital products in recent years, including electronic books and an online dictionary and education program.

According to a culture ‘blue paper’ released by the Chinese Academy of Social Sciences early this year, 30% of handset users indicated that they would sign up to receive books and newspapers through mobile phones within the next five years.

The blue paper predicted that libraries and other users would purchase e-books and digital newspapers valued at more than RMB1 billion ($144 million) during those five years.

It also estimated advertising revenues, linked to e-books and digital newspapers purchased by netizens and handset users, would reach RMB5 billion in the next five years.
Source: China View

In 2007, China’s sales of personal computers or PCs, reached 27.94 million units, valued at RMB147.16 billion. Laptop sales volume reached 6.30 million units, up 49.5% year on year with a sales value of RMB50.01 billion. Desktop sales volume stood at 21.05 million units, up 12.9% year on year and its sales value was RMB86.07 billion, up 3.4% year on year.

These increases in sales have brought, in their wake, the development of peripheral industry.

In the first quarter of 2006, sales volume of computer peripherals stood at 50.09 million units, up 41.3% year on year. In 2007, sales value of computer peripherals in China increased by 14.9% year on year.

Foreign brands hare taken the leading places in computer peripherals market segment.

In 2007, HP laser printer took up more than 60% of the market shares. Epson stylus printer took up 69% of the market shares. Domestic brands were competitive in the middle- and low-end market.

However, possibly the large majority of peripherals, no matter what the brand, were made in China.

The report is based on the authoritative data from the National Statistics Bureau, the Ministry of Information Industry and China Electronic Sounds Industry Association and information from Analysys International, CCID Consulting, IDC, Gartner, ZDC and some computer peripherals producers. So you can take it that it is fairly solid.
Source: The Earth Times

Global retail prices for laptop computers are set to rise as contract manufacturers seek to raise prices in the face of rising raw material and assembly costs.

PC users worldwide have become used to falling prices throughout the past decade however, the so-called ‘China effect’ on global manufactured goods prices is ending.

The Financial Times reports that Quanta, Compal and Wistron, the world’s three largest notebook contract manufacturers by output, are in talks with their customers – Hewlett-Packard, Dell and Acer – on how to share the burden of rocketing prices for key materials. Labour costs in China, where the manufacturers have their main production bases, are also rising.

Ray Chen, chief executive of Compal, said, ‘We will be raising prices for the first time.’ His company expects to account for 25% of the global market this year.

Ray Chen said, ‘In the past, we, the contract manufacturers, were always forced to absorb upward price pressures. But the prices for key materials such as copper and plastic resin and the cost of labor in China have been rising so much that it doesn’t make sense for us to continue lowering prices.’

Quanta, Compal, Wistron and smaller competitors design and assemble most notebook computers, which the top PC companies sell under their own brands.

While contract manufacturers have seen their profits squeezed in recent years, they have been unable to get price rises accepted by the the branded vendors.

However, it is reported several of the branded PC companies have agreed to share part of the burden, recognizing that the entire supply chain is clamoring for price rises.
Source: FinFacts Ireland

It is a great pity that China did not get its 3G services sorted out properly before the Olympics. We can rejoice that at least some of it is on line and working and there will be a serious presence — perhaps but not a total coverage — for the Olumpics.

We are triumphantly told that China’s 3G (third generation telephony) system will expand service to 10 cities AFTER August’s Olympic Games.

Wan Gang, the nation’s minister of science and technology said, ‘TD-SCDMA (Time Division Synchronous Code Division Multiple Access) will commence use in ten big cities after the Olympics.’ He did not provide details as to what cities or when or how large the coverage would be.

Last week, Samsung gave the Beijing Organizing Committee for the summer Olympics 15,000 TD-SCDMA handsets, allowing China to proclaim that it would offer 3G service, via China Mobile, during the Games.

However, it is important to note that TD-SCDMA does not support other 3G formats, so visitors with 3G phones from Japan, Korea and European countries will not be able to use their handsets in Beijing.

As China’s homegrown 3G technology, TD-SCDMA began its latest round of trials in April, in Beijing, Shanghai, Tianjin, Guangzhou, Shenzhen, Qinhuangdao, Shenyang and Xiamen, with a total of 20,000 users. China Mobile, which is offering the service and operating the trial, did not say when it would be completed. Although trials of TD-SCDMA began in 2005, a commercial rollout will still not ready by August.

China has also not issued 3G licenses, although Chinese telecom regulators have hinted at impending licensing for at least two years. China Mobile seems a lock given its prominence in the testing process. China Mobile is both China’s and the world’s largest mobile operator.

It’s also just possible — but not something to bet on — that China could skip 3G altogether, having already held 4G trials in 2007.

Worth nothing that despite the confident remarks of Wan Gang his Ministry of Science and Technology does not oversee telecommunications. That falls to the newly-created Industry and Information Ministry, a successor to the previous Ministry of Information Industry.
Source: IT World

It is very difficult to write this without losing one’s temper and saying rude and hurtful things about the American IT industry.

The United States has warned China it risks ‘technological isolation’ for developing unique technical standards of its own that are shutting out foreign competition.

Having taken a tablet to calm myself down I can write that for thirty years I have seen American companies desperately developing unique technical standards of its own so that it could screw other countries for royalties.

No industry, none, has acted the role of robber baron which such consistency.

It has never quite forgiven Tim Berners-Lee and CERN for not copyrighting the Internet so that users could be screwed for money. The legal advice given to all innovation departments in the United States is copyright and we will work out whether it is operable later.

The new technology which has them so irate is TD-SCDMA which is a new 3G standard. and despite what the Americans say it has been offered to other countries and some have accepted it. At least they will not have to pay monstrous royalties to the United States.

Now, Under Secretary of Commerce Christopher Padilla, seen in our illustration says that despite widely accepted international standards, China has developed its own standards for mobile phones. And, he added with a lack of morality or, to be charitable, basic understanding, it has done this ‘amid a lack of transparency and due process.’

If Christopher Padilla said that with a straight face he is not a man with whom one would wish to play poker.

He went on. ‘These requirements certainly provide Chinese domestic companies an unfair advantage, but they also carry great risks for China.’

Taking the piece by piece. How is not having to pay daft royalties to American companies an unfair advantage? What law, what ethic, states that the world must always pay the United States danegeld in order to improve itself? And to imply a threat of ‘great risk for China’ is disgusting.

To demonstrate that great risk he said that in the 1980s Japan thought its market was large enough to justify unique technology standards that would eventually move the world in its direction, to the benefit of its companies.

‘It was wrong,’ he said.

In what specific instance was it wrong? I can think of three examples. In the case of the United States, given time I would come up with three thousand.

Christopher Padilla went on, ‘Now China runs the same risk of turning itself into a lonely island of technological isolation, cut off from the world by government-mandated, China-unique standards that are out of line with where the market-driven global economy is heading.’

Such nonsense.

Christopher Padilla said many American companies have expressed concern about security standards for information technology products that made it costly for them to enter the Chinese market.

He said it appeared that Beijing favored a China-specific third-generation (3G) mobile phone standard over internationally recognized standards.

‘While China’s approach may appear to provide a competitive advantage in the short term, it in fact inhibits collaboration, limits product development, reduces consumer choice, and hinders China’s competitiveness and growth.’

Politicians learn to speak this way in the cradle. Note he does not mention a royalty has to be paid on every mobile phone made and sold in China which does not use the new TD-SCDMA China standards. He probably cut that bit out. It would have made his speech too long.
Source: AFP

Microsoft will spend $280 million on a Beijing research and development center and double its full-time R&D staff in China to 3,000 over the next few years, according to the Wall Street Journal.

Microsoft China’s chairman, Dr Zhang Ya-Qin, said during the center’s groundbreaking ceremony that China is the company’s largest R&D area outside the US. The center will be finished in 2010.

In 2006, the firm agreed to spend US$31 million on R&D labs in China, and it entered into an R&D joint venture with Lenovo last year. Microsoft’s decision to focus R&D on China indicates the country’s importance.

Microsoft does not disclose its revenue from the Chinese market. But Fortune Magazine estimated in a story last year that the software giant’s revenue from China would exceed $700 million last year, about 1.5% of Microsoft’s global sales.

All true and interesting. But no mention of the situation with AliBaba which is owned, in part, by Yahoo! which has just spurned, or been spurned (perspectives differ) by Microsoft. Perhaps AliBaba is the elephant in the parlor.
Source: China Economic Review Daily Briefing and Sinacom

Taiwan computer giant ASUSTeK Computer Inc. (ASUS) has recently laid the foundation for a RMB3 billion ($428.6 million) factory in Jianxi Province in the Chinese mainland.

In the preliminary stage the factory in Ji’an city will produce copper wire yarn and computer accessories. It will produce mainboards and assemble notebook computers in the future.

Annual production at the factory is expected to reach RMB10 billion.

ASUS has a global staff of more than 100,000. Revenue for 2007 reached $6.9 billion
The illustration was not chosen for the model — atlthough that helped — but for the new sub-mini Asus which is selling at very low prices and is creating a new market.

The 900 is based around an 8.9in, 1024 x 600 display.

It will contain 1GB of DDR 2 memory and a choice of 12GB or 20GB of solid-state storage, depending on which operating system you opt for. Both capacities are configured as two partitions: one 4GB space and either 8GB or 16GB.

The 20GB model will come with Linux, Asus said, while the 12GB version will be pre-loaded with Windows XP Home Edition.

Source: China View

The Microsoft Yahoo nonsense which is currently proceeding brings Baidu under the spotlight.

If you can think back a bit we may be in the same over-heated area we were in 2000. Then analyst Henry Blodget of Merrill Lynch said Yahoo price potential was around $425 even though at the time they were near the $300 mark.

He was more than somewhat off the mark.

Yahoo dropped like a stone in a muddy pond by more than 95% and ended in the $10 area. Recovered since then, of course. But it was an awful warning as to how far enthusiasm can go.

Citi thinks Baidu is a good buy and has increased its one year price target from $350 to $415.

This logic is, in a sense, helped by the fact the shares have almost doubled in the last month from the low $200s.

Past experience would tell us that last year they went up too far, too fast and are due for a correction. And that will not be in the direction suggested by Citi.

Now let us try pure reason.

The way matters stand at the moment the market is saying Baidua is worth nearly $13 billion. To put this into perspective add together most of the American airlines and their total worth is less.

Yet these airlines are estimated to generate revenues in 2009 of $86 billion.
A billion here, a billion there and suddenly your are talking real money.
This equates to more than 118 times Baidu’s expected revenues of $731 million.

Even though mathematics are not my strong point and in shares I am a conservative Welsh Calvinist Methodist there seems to me to be some sort of lack of logic herein that.

Baidu’s shares are selling at 91 times estimates of the 2008 profits and 57 times 2009 estimates of $6.54.
Google is selling at only 23 times 2009 earnings estimates.

OK, forget the airlines. Think of Google. And remember that Google is chip, chip, chipping away at Baidu’s share of the market in China.

Anything could happen because this is China and sometimes irrational decisions can be made. But, at the moment, I am not thinking of putting any of my meager earnings into Baidu. The lottery looks a lot more attractive.
Source: Seeking Alpha

Chairman Yang Yuanqing of Lenovo said the company is seeking acquisitions to regain the world’s third-largest personal- computer seller ranking lost to Acer last year.

In an interview with Bloomberg Television broadcast Yang Yuanqing said, ‘We are not satisfied with our current market share and global ranking. I believe there will be further consolidation in the industry and we hope to seize the opportunity to buy.’

Lenovo, the Chinese company that shot to prominence with the 2005 purchase of IBM’s PC unit, had its European expansion plans foiled last year when Acer bought Packard Bell.

Joseph Ho, a Daiwa Institute of Research analyst said, ‘It makes sense for Lenovo to want to acquire as it has the financial muscle. He rates Lenovo ‘outperform.’ But asks: ‘The question is what to acquire and at what price.’

Lenovo had cash and equivalents of $2.2 billion as of Dec. 31, according to the latest information from the company, which gets more than half of its sales from Asia.

The $1.25 billion purchase of the IBM business three years ago made the company the world’s third-largest computer maker.

Lenovo, which moved its headquarters to Raleigh, North Carolina, after the acquisition, lost the position to Acer in the second half of 2007, after the Taipei-based rival bought Packard Bell.

There are simply not that many possibilities around.

Lenovo’s current market value is $7.5 billion, about 6% of the size of industry leader Hewlett- Packard. Acer is valued at $5.4 billion.

Charles Guo, a Hong Kong-based analyst at JPMorgan suggested that for companies seeking to grab a larger share of the Chinese market, domestic PC makers such as Founder Technology and Tsinghua Tongfang may be takeover targets, said .

He said, ‘Acquiring Chinese players like Founder and Tongfang will give greater access to the market.’

Chairman Yang Yuanqing made the most remarkable statement when he said, ‘The most important thing is growing our market share, more than making money.’
Source: Bloomberg

Baidu.com is going to make a serious move on the online game sector in China.

The country’s No. 1 Internet search engine provider has already announced expansion into the instant messaging and online auction business.

Now, through cooperation with five game operators, including Shanda Entertainment, Baidu has launched its game site.

It is initially offering six browser games: Zongheng Tianxia, Tiankong Zuo’an, Fangbianmian Sanguo, Luanwu Chunqiu, Empire, and XBA Manager. You can see the basic idea at http://youxi.baidu.com.

At the moment these are free altough it is unlikely that will long continue.

Baidu, in a statement, said, ‘The games are Web-based, therefore they don’t require high-standard computers. The games on Baidu’s platform are green and healthy, without too much blood.’

Whether that is a sure and certain way to success is open to debate.

China’s online game market revenue was RMB12.8 billion ($1.83 billion) in 2007, and the figure will hit RMB40.1 billion in 2011, according to Analysys International, a Beijing-based IT consulting firm.

Robin Li, Baidu chief executive and chairman said Baidu’s new services aim to improve user loyalty and profitability of the company’s core search business.

Robin Lin said Baidu Hi, its new instant message tool, has been in public testing, and Baidu’s auction Website will debut this year.
Source: China View