CHINA INFORMATION TECHNOLOGY LAW NEWSLETTER
Vol. 4, No. 1 - January 2, 2003
TOPICS THIS ISSUE:
- CHINA'S BOOMING MOBILE PHONE MARKET
- CHINA'S NEW DOMAIN NAME RULES
- CHINA'S E-GOVERNMENT
- CHINA TELECOM'S USA AMBITION
- TO SPREAD SCIENTIFIC AND TECHNOLOGICAL KNOWLEDGE AMONG THE PUBLIC
- NIKE'S ONLINE MARKETING
China Litigation and Arbitration
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CHINA'S BOOMING MOBILE PHONE MARKET
China's booming mobile phone market is encouraging more companies to enter the lucrative business.
A seminar on mobile equipment and terminal development was held recently in Ningbo. Officials from the State Development Planning Commission (SDPC), the Ministry of Information Industry (MII) and China Mobile Communications Association (CMCA) attended the seminar.
At the meeting, more than 10 companies including Ningbo Sanxing Aux, Skyworth, Digital China and Hi-Tech Wealth urged the Chinese government to remove the current existing mobile phone production permit system since such a system blocked more qualified firms from entering the market. Companies seeking to obtain mobile phone production licenses include Ningbo Sanxing Aux, Skyworth Digital, Digital China, Shenzhen Jinli Communications Equipment Co., BOE Technology Group, Beijing Hi-Tech Wealth, Ingram Micro (China) Ltd., Beijing Galaxy Information Technology Inc., Communications Branch of China Electronic Appliance Corp., Beijing Zhongdian Future Communications, Shenzhen Suifeng, Shanghai Emol Communications, and Beijing Putian Taili Communications.
At present, there are two ways for these unlicensed firms to market their handsets on domestic markets: either buy licenses from those licensed manufacturers, or cooperate with licensed manufacturers. Both ways will greatly raise production costs for the unlicensed companies. For example, the NASDAQ-listed company, Qiaoxing had to acquire a 65% stake in CEC Telecom at a price 70% higher than the net asset value of the company just because CEC Telecom owns both CDMA and GSM mobile phone production licenses.
To go across the policy barrier, some companies launched or are planning to launch their mobile phone PDAs (personal digital assistants), like smart phones by Dopod and a PDA handset by Siemens and Hi-Tech Wealth since no license is required for the mobile phone PDAs. They are sold as PDAs although they also have mobile phone functions.
So far, the MII has issued 49 mobile phone production licenses in total, including 30 GSM licenses to 13 Sino-foreign joint ventures and 17 domestic firms, and 19 CDMA licenses to 18 domestic firms and only one foreign firm - Motorola. At present, 11 companies in China own both CDMA and GSM handset production licenses and 7 licensed manufacturers produce only CDMA mobile phones. In addition, licensed Sino-foreign joint ventures are required to export at least 60% of their output.
It is predicted that the MII is likely to loose the restrictions on mobile phone productions, and will issue more new licenses next year.
(SOURCE: INTERFAX INFORMATION SERVICES B.V.)
CHINA'S NEW DOMAIN NAME RULES
Qian Hualin with the China Internet Network Information Center (CNNIC) said the Ministry of Information Industry (MII), the highest authority overseeing China's IT industry, released a new regulation on domain names on December 12.
According to the regulation, Internet domain name applicants in China have been authorized to add their organization title directly before the ".cn" suffix without having to specify their organizations' categories like ".com" or ".net" beginning March 17.
The regulation is aimed to provide easier and quicker access to domain name applicants, and to speed up China's Internet development and protect information security.
Statistics indicate that since the registration process is much easier in foreign countries, about 80 to 90 percent of China's users have registered their domain names with the ".com" or ".net" suffixes used abroad.
According to Xinhua News Agency, domain names with the ".cn" suffix have grown form 4,066 in 1997 to around 126,146 by the end of June 2002.
Currently, every ".cn" user is charged 300 yuan (about 36 US dollars) each year.
(Source: XINHUA NEWS AGENCY)
CHINA'S E-GOVERNMENT
According to a senior official with the Information Technology Promotion Office of the Chinese cabinet, the State Council will review two regulations on electronic government by the end of this year in an attempt to build an online government in China.
One regulation is on digital signatures and the other one on information publicity. The digital signature regulation will lay a basis for the online approval between government departments, while the government information publicity regulation will require government departments to publicize their contact information and regulations on the Web and give free access to the public.
"We must finish the basic requirements for the construction of e-government websites, such as the formulation of relevant laws and regulations, standards and security systems," said Yang Xueshan, director general of the Department of Policy and Planning, the highest government organization responsible for the population of information technology in government, enterprises and society.
He also called on governments at different levels to put more emphasis on the improvement of government efficiency rather than on building their own online platforms.
He said that government departments should also build their platforms in accordance with their demands instead of solely providing a fast and broad network and fast-speed computers.
In the first half of this year, procurements of computer hardware by government departments reached 10.7 billion yuan (US$1.3 billion), but spending on software was only 2.1 billion yuan (US$254 million).
More than 70 percent of governments above the prefecture level have opened online channels or websites to communicate with the public. Government websites reached 3,000 in the past three years.
( SOURCE: CHINA DAILY)
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CHINA TELECOM'S USA AMBITION
Pacific Telecommunications Council will hold PTC2003 from January 19 to January 23, 2003, at the Hilton Hawaiian Village, in Honolulu, Hawaii. PTC2003 will mark PTC's 25th anniversary since its first conference.
Zhang Weihua, President of China Telecom USA, is a newly featured speaker at PTC2003. Zhang has been working on the front lines to establish Chinese telecommunications operations in the United States.
Zhang is one of more than 1,400 participants expected at this year's conference focusing on the theme "Global Broadband/Global Challenges." Zhang will speak in a session titled "Broadband in East Asia -- A View from the Top." He joins PTC2003's dynamic mix of CEOs, CTOs and CFOs, venture capitalists, senior industry observers and high-level government officials at a time of intense development for China Telecom USA.
"China Telecom USA has its own submarine cable circuit connecting the US and China, as well as its transport backbone in the United States. The aim of the new company is to bring its US customers closer to China. It will be very interesting to hear Mr. Zhang's ideas on US-China economic relations in regards to the submarine cable industry," said Hoyt Zia, PTC's executive director.
In early November, China's largest fixed-line telecommunications service provider, China Telecom, became the first Chinese telecommunications company to establish operations in the United States. China Telecom USA released a new product called ChinaDirect that offers end-to-end telecom services to American Corporations doing business in China.
"We are building out a cutting edge network from coast to coast," Mr. Zhang commented on the company's mission. "We have points of presence in Los Angeles, San Francisco, New York and Washington, DC. We're working in the same time zone as our American customers, speaking their language. We'll provide customer service and operations support. The fact that a single company will operate the entire network, from the East Coast of the United States to the easternmost reaches of China, is a big selling point for our new company. Creating seamless communications links between American headquarters and Chinese subsidiaries is China Telecom USA's only focus, so you can bet we're going to work tirelessly to be good at it," said Mr. Zhang.
The ChinaDirect suite includes International Private Leased Circuit (IPLC) services from the United States to all points in China, direct Internet Protocol (IP) connections to China, and a secure Multiprotocol Label Switching (MPLS)-based Virtual Private Networks (VPN) service for US companies with China-based operations.
The Honolulu-based Pacific Telecommunications Council is an international, non-profit organization that promotes the development of telecommunications and related industries in the Pacific, with an emphasis on developing countries. Its membership of over 600 organizations and individuals includes providers and users of communications services, policy-makers, lawyers, engineers and academics. Visit www.ptc.org for information on PTC membership and events.
(SOURCE: BUSINESS WIRE, INC.)
TO SPREAD SCIENTIFIC AND TECHNOLOGICAL KNOWLEDGE AMONG THE PUBLIC
The Second National Popular Science Conference was held on December 18, 2002. The Conference was co-sponsored by the Ministry of Science and Technology, the Publicity Department of the Central Committee and the China Association for Science and Technology.
At the Conference, Chinese Vice Premier Li Lanqing called for popular science promoters nationwide to explore new ways to spread scientific and technological knowledge among the public.
Li said that the level of public awareness of scientific and technological knowledge would be the final determinant of China's productive forces and cultural development in the 21st century, in which the advancement of science and technology is on a fast track.
The vice premier noted that the promulgation of the law on popular science last June was a landmark in China's popular science work and represented a step forward in the promotion of popular science campaign in China.
Li also urged Party and government officials of various levels to take the lead to promote science and to give budgetary priority to the popularization of scientific and technological knowledge among the public.
(SOURCE: USITO)
NIKE'S ONLINE MARKETING
At a news conference in Beijing, Nike Inc. disclosed that it has signed an online marketing deal with NASDAQ-listed Chinese Internet portal Sina.com.
Under the agreement, Sina.com's existing Chinese-language sports channel will be co-branded with Nike and will offer links to Nike online clubs: Nike Stars and Nike Teams and Nike websites such as Nikefootball.com which offers various Nike brand downloads, games and screen savers.
"Marketing through the Internet is another effective media for Nike to increase its market share in China," said the chief marketing officer of Nike China, Pan Jianhua. The Internet industry is growing very fast in China, with the number of users standing at more than 45 million at the end of November, up from 36.5 million at the end of last year, according to government figures.
Sina.com, one of China's top three internet portals, said its sports channel has the largest number of registered users, with daily page views numbering on average more than 2 million.
Cooperation between Sina.com and Nike started during this year's World Cup Games. Additionally, China will host the Olympic Games in Beijing in 2008, which is expected to be another money-spinner for Chinese Internet portals. Sina.com CEO Daniel Mao said the sports channel, which was launched in 1997, is starting to make a profit and expects to see further cooperation with Nike over the next few years through joint marketing opportunities.
Neither Nike nor Sina.com officials would disclose financial details of the arrangement.
(SOURCE: AFX NEWS LIMITED)
The China Information Technology Law Newsletter is intended to be used for news purposes only. It should not be taken as comprehensive legal advice, and Lehman, Lee & Xu will not be held responsible for any such reliance on its contents.
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