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May 26 2011

China Cranks Up Heat on Nuclear Fusion By Jonathan Shieber

Is China’s latest technological drive going to end up producing yet another Sputnik moment for the U.S.?

That has to be one question on the minds of scientists, researchers and politicians in the U.S. as China unveils its latest attempt to reach for one of science’s brass rings: viable nuclear fusion technology.

According to a report in the state-run China Daily, the central government is planning to train 2,000 experts to pursue research and development into magnetic confinement fusion, which seeks to use magnetic fields to create the high-pressure conditions necessary for fusion.

A number of research institutes and private companies around the world are racing to perfect magnetic confinement.

Wu Bangguo (L), Chinese National People’s Congress Standing Committee Chairman, and Kaname Ikeda of Japan (R), General Director of International Thermonuclear Experimental Reactor (ITER), visit the construction site for ITER in Saint-Paul-les-Durance, southern France, July 13, 2010.

China is already a signatory and participant in the France-based International Thermonuclear Experimental Reactor (ITER) project, that is perhaps the largest project pursuing magnetic approach. Arguably one of the most world’s ambitious multinational scientific undertakings, the project has a price tag of at least $21 billion and involves hundreds of scientists from China, the European Union, Japan, India Korea, Russia and the United States.

One concern among Chinese scientists is that the nation is not getting enough value out of its investment the ITER project. “China is trying to dispatch more qualified scientists to work on” the project, Cao Jianlin, vice-minister of science and technology, told China Daily.

Right now China provides 10% of the funding for the project, but supplies only 5% of the scientists, which means the country is missing out on valuable training for its would-be fusion experts.

Chinese engineers and scientists are currently responsible for building components such as heating, diagnostic and remote maintenance equipment for the project, as well as transporting it to Cadarache in the south of France, where the ITER reactor will be built.

Another researcher quoted by the China Daily thinks it’s not nearly enough and complained about the lack of exposure Chinese scientists are getting to the new technologies that could reshape the energy market.

“The ITER is related to 34 core scientific engineering technologies and management subjects,” Wan Yuanxi, dean of the school of nuclear science and technology under the University of Science and Technology of China, said. “Chinese researchers only work on 11 of them, which means we have no involvement in more than 60 percent of its core scientific engineering technologies and management subjects.”

In addition to its international efforts, China is also pursuing its own research into fusion technologies in research around the country, including at a laboratory in Chengdu.

An April guideline issued jointly by China’s Ministry of Science and Technology, the Ministry of Education, the Chinese Academy of Sciences and the China National Nuclear Corp. recommends the government subsidize at least 200 researchers who intend to pursue doctorates in magnetic controlled fusion.

Currently there are 1,254 researchers have been involved with magnetic controlled fusion-related projects in China, according to the China Daily report.

Not to be outdone, the U.S. has spent billions of dollars on fusion research, in addition to the work it is doing to promote ITER projects domestically and on the main project in France, although funding for the European project has been a political football in the past. Like China, the US is responsible for around 9% of the ITER project’s total costs, with the EU has taking on the bulk of financing.

Indeed, institutions globally are all racing to find some way to commercialize technology that seems almost too good to be true – providing cheap, nearly unlimited power with no harmful emissions.

It’s a quest that has created some strange bedfellows. In the U.S., supporters of fusion technology range from the original “Penthouse” magazine publisher Bob Guccione to some of the nation’s premiere technology investment firms.

January 3 2011

China claims breakthrough in nuclear technology

Chinese scientists have made a breakthrough in spent fuel reprocessing technology that could potentially solve China's uranium supply problem, Chinese television reported on Monday.

The technology, developed and tested at the No.404 Factory of China National Nuclear Corp in the Gobi desert in remote Gansu province, enables the re-use of irradiated fuel and is able to boost the usage rate of uranium materials at nuclear plants by 60 folds.

"With the new technology, China's existing detected uranium resources can be used for 3,000 years," the China Central Television reported.

China, as well as France, the United Kingdom and Russia, actively supports reprocessing as a means for the management of highly radioactive spent fuel and as a source of fissile material for future nuclear fuel supply.

But independent scientists argued that commercial application of nuclear fuel reprocessing has always been hindered by cost, technology, proliferation risk and safety challenges. China has 171,400 tonnes of proven uranium resources spread mainly in eight provinces -- Jiangxi, Guangdong, Hunan, Xinjiang, Inner Mongolia, Shaanxi, Liaoning and Yunnan.

China is planning a massive push into nuclear power in an effort to wean itself off coal, the dirtiest fossil fuel. It now has 12 working reactors with 10.15 gigawatt of total generating capacity.

China has set an official target of 40 gigawatts (GW) of installed nuclear generating capacity by 2020, but the government indicated it could double the goal to about 80 GW as faster expansion was one of the more feasible solutions for achieving emissions reduction goals.

As such, China will need to source more than 60 percent of the uranium needed for its nuclear power plants from overseas by 2020, even if the country moves forward with a modest nuclear expansion plan, Chinese researchers say.

October 31 2010

China's ZTE wins US's Federal Information Processing Standards (FIPS) 140-2 security validation security certificate vital for it to supply sensitive US firms

ZTE Corp (SEHK: 0763), which has raised security concerns among politicians in the United States, apparently burnished its credentials in the market after obtaining a key certification for its wireless equipment from American security experts.

The Shenzhen-based company said yesterday it was the first mainland maker of telecommunications equipment to receive the Federal Information Processing Standards (FIPS) 140-2 security validation by the National Institute of Standards and Technology.

FIPS 140-2 is an information-technology security accreditation programme for so-called cryptographic modules produced by telecommunications systems suppliers such as ZTE, who seek to have their products certified for use in government departments and regulated industries - including financial services and health care - that collect, store, transfer, share and disseminate sensitive but unclassified information.

Cryptographic libraries are commonly used on ZTE's wireless infrastructure products for security.

The official certification comes about two months after eight US senators asked the Obama administration to look into a bid by Huawei Technologies to supply key telecommunications infrastructure to Sprint Nextel Corp, which operates America's third-largest wireless communications network.

The lawmakers expressed concern that national security might be compromised in light of claims that Huawei does business with the Revolutionary Guard in Iran and is closely associated with the People's Liberation Army.

Their action inevitably served as another red flag for US network service providers to reconsider their purchase of infrastructure from mainland suppliers.

"We don't think the US is an open market; it is a closed market," Xu Ming, ZTE's vice-president for wireless product business, said last month when asked to describe the hurdles that mainland telecommunications equipment suppliers must overcome in the US.

Following the successful security certification, however, the rhetoric from ZTE has been toned down.

"ZTE, which has been providing products and services to more than 500 carriers across more than 140 countries, regards transparency as the key to maintaining trusted business relationships," its chief of US operations, Cheng Lixin, said.

A spokeswoman from ZTE headquarters in Shenzhen yesterday also noted the company, the mainland's No 2 telecoms equipment maker, will continue to invest in the US. ZTE, for example, will buy US$3 billion worth of semiconductor components over the next three years from five US companies.

Shanghai-based technology consultancy RedTech Advisors described the chip purchases as "a sweetener" that ZTE hoped would enhance its expansion in the US.

October 28 2010

China's supercomputer faster than US' No 1

China's Tianhe-1 has overtaken Nebule to regain top spot as China's fastest computer, according to a new list of China's Top 100 supercomputers released Thursday.

On the biannual world TOP 500 list published in June, China's Nebulae machine took the second spot only after the US's Jaguar system, while Tianhe-1 took seventh place.

Housed at the National Center for Supercomputing in northern port city of Tianjin, Tianhe-1, meaning Milky Way, has a sustained computing speed of 2,507 trillion calculations, or 2.507 petaflops, per second.
It has a theoretical speed of 4.7 petaflops per second, according to a R&D research member of Tianhe-1. A petaflop is equivalent to 1,000 trillion calculations.

Nebulae housed in Shenzhen is capable of sustained computing of 1.271 petaflop per second (PFlop/s) on the Linpack benchmark, a measure for ranking supercomputers in world Top 500 list.

The US leads the world in supercomputing and is home to more than half of the top 500 supercomputers. The Jaguar system at Oak Ridge National Laboratory in Tennessee has a speed of 1.75 PFlop/s, now slower than China's Tianhe-1.

The enhanced Tianhe-1 has upgraded Intel CPUs, NVIDIA GPUs, and new domestically developed FeiTeng-1000 CPUs have been installed, the developer the National University of Defense Technology (NUDT) said.

Tianhe-1 has begun trial use among target clients including Tianjin Meteorological Bureau and the National Offshore Oil Corporation data center. "It can also serve the animation industry and bio-medical research," said Liu Guangming, director of the National Center for Supercomputing in Tianjin.

In September 2009, the NUDT created Tianhe-1 with a sustained computing speed of 0.5631 PFlop/s, the fastest supercomputer in China at that time.

The new technical data of Tianhe-1 has been submitted to the world Top 500 list and the next list will be released in November.

September 25 2010

Calling All Smart Movers

Earlier this year, Apple announced plans to open retail outlets in Hong Kong – part of its strategy to launch 25 new stores in the Chinese mainland and Hong Kong by the end of 2011. The American consumer-electronics giant is responding to demand: according to industry research, the cellular take-up rate is more than double the global average, and more than half of all Hong Kong mobile phone users will own a smartphone within the next year.

As for the bigger picture, the mainland is already the world’s largest mobile phone market by subscribers, with an estimated 796 million users. Subscription to 3G service is skyrocketing, more than doubling this year alone, according to the Chinese Ministry of Information.

More than one-third of Hong Kong consumers will replace their mobile phone this year

While locations of the new Apple stores have yet to be announced, Hong Kong offers plenty of choice to a brand renowned for entering markets only where the location is perfect. This means top-end shopping malls or prominent street-level frontage, both of which are available in Hong Kong’s major business districts.

Driven by smartphone demand, Apple is opening its first Hong Kong store

Nokia chose a prominent Times Square, Causeway Bay location to open its first Asia flagship store in July 2006. The brand followed with a second Hong Kong store, in Central’s prestigious ifc mall, in December 2008. Bruce Lam, Nokia’s General Manager, Markets, Hong Kong and Macau, said Hong Kong is a great market for Nokia. “In Hong Kong, the market for smartphones is among the highest in the world. Many people use their phones to check emails, browse the Internet and visit social networks. This shows Hong Kong consumers are savvy in the use of mobile phone technology, and they are eager to learn about the latest technology."

Dynamic Market

Nokia was one of the first mobile phone manufacturers to launch localized applications in Hong Kong

Canada’s Research In Motion (RIM), maker of the BlackBerry, recently shored up its Hong Kong market share though a distribution tie-up with US company Brightstar Corp, a global leader in services and solutions for the wireless industry. Citing Hong Kong as “one of the world’s most dynamic and advanced mobile markets,” Brightstar will distribute BlackBerry smartphones to multiple retail channels in the city.

Arturo Osorio, President of Brightstar Asia Pacific, Middle East and Africa, said Hong Kong would expand on the success achieved with RIM in other regions worldwide. “Hong Kong is one of the areas where consumers and businesspeople alike demand the most cutting-edge wireless technology. The BlackBerry brand is well-recognised around the world for leading-edge wireless communications, and we’re pleased to bring BlackBerry smartphones to customers in Hong Kong.”

Arturo Osorio, President of Brightstar Asia Pacific, Middle East and Africa

According to the TNS Global Telecoms Insights Survey 2010, Hong Kong consumers are at the forefront of global smartphone usage. Nearly half (48 per cent) of respondents in Hong Kong own a smartphone, more than double the global rate of 23 per cent.

“Until fairly recently, smartphone or PDA phones were owned by a very specific group of consumers – mainly tech geeks and business road warriors,” said Marc de Lange, Director, Technology Sector. “But in the coming year, Hong Kong will reach an important milestone, as more than half of all mobile-phone owners start to carry a smartphone in their pockets.”

Tech-Savvy Consumers

Marc de Lange, TNS Director, Technology Sector

He described Hong Kong consumers as very tech savvy, genuinely interested in new mobile phones and wanting to try out new technology as soon as it’s available.

“The Hong Kong market is also coming back from a year of delayed product purchases in 2009 due to the financial crisis. According to our studies, 39 per cent of Hong Kong consumers hope to replace their mobile phone within 2010.”
The importance of owning a smartphone is changing how users choose their mobile phones, Mr de Lange added.
“Smartphone users are increasingly accessing features such as pull email (32 per cent), push email (25 per cent), mobile Internet (52 per cent) and Microsoft Office (28 per cent) applications. There is also demand for the Qwerty keyboard (11 per cent), but more popularly for touch screen (51 per cent).”

Look and feel are the predominant deciding factors for 32 per cent of Hong Kong consumers purchasing a mobile device, followed by brand, at 19 per cent. Similarly, 19 per cent of consumers say content and application will be equally important, surpassing the global percentage of 14 per cent.

“Today’s consumers can access a wider range of mobile services than ever before through smartphones. So in choosing a mobile device, consumers care more and more about which content and applications they will be able to access,” said Mr de Lange. “Companies must consider the new dynamic in their go-to-market strategies and leverage the equity generated by these new mobile brands to drive sales.”

He added that it’s no surprise the big brands are expanding in Hong Kong.

Selling the Experience

Having an Apple-owned store in Hong Kong makes great business sense, according to Mr de Lange. “If you ever visit their store in 5th Avenue in New York, you'll see they really sell an experience rather than a product. Hong Kong is a very important market in Asia for technology brands. It is one of the key cities in Asia where brands launch their products. More than domestic consumers, consumers in Hong Kong include a large number of tourists and visitors from around Asia and the world that specifically purchase the latest technology,” Mr de Lange said. “Brands simply cannot afford not to be in Hong Kong.”

Gadgets Galore

When it comes to consumer electronics, young people in Hong Kong have the highest ownership of gadgets among their peers in the region. The Young Asians 2010 survey by global research agency Synovate, released in August, shows Hong Kong youth own, on average, 4.1 devices – two more than the regional average. They lead the pack with mobile phones (87 per cent overall, and 93 per cent in the 12-14 age group), desktop computers (66 per cent), digital still cameras (50 per cent), hand-held video games (40 per cent), and TV game consoles (25 per cent).

In some cases, these rates of ownership are well above the regional average, which stands at 64 per cent for mobile phones, 32 per cent for desktop computers, 17 per cent for digital still cameras and 25 per cent for TV game consoles.

The survey found that 63 per cent of Hong Kong youth are engaged in social networking. They are the region’s top bloggers (53 per cent, against a regional average of 39 per cent), and are the most likely to participate in forums or discussion groups (47 per cent).

Susanna Lam, Research Director of Synovate in Hong Kong, said young people today are “inseparable” from their phones. She added that, in an affluent market like Hong Kong, families can afford multiple mobile phones. “Coupled with cheaper mobile-phone plans, there is every reason for youth to have a mobile. Interestingly, it also seems that for youth in these markets, mobile phone ownership is a sign of growing up in the world.”

September 24 2010

China to be No 1 in internet-based TV services By Bien Perez

China is poised to become the world's biggest market for internet-based television services next year, surpassing global leader France.

The combined mainland, Hong Kong and Macau market overtook the United States as the second-leading user of so-called internet protocol television (IPTV) services in the second quarter, according to industry group Broadband Forum.

"China dominates the Asian IPTV market with more than 6.7 million subscribers," Broadband Forum marketing director Laurie Adams Gonzalez said on the sidelines of the group's meeting in Hong Kong.

The Broadband Forum is a non-profit, international consortium with about 200 members, including leading telecommunications service providers, network equipment manufacturers, semiconductor companies and software suppliers. It develops key technical specifications through consensus, defines next-generation solutions and provides input to industry standards bodies.

Members in Asia include China Telecom Corp (SEHK: 0728), China Mobile (SEHK: 0941, announcements, news) , PCCW (SEHK: 0008), ZTE Corp (SEHK: 0763), Samsung Electronics, Singapore Telecommunications, Chunghwa Telecom and Fujitsu.

The Broadband Forum reported on Monday that the number of fixed-line broadband subscribers worldwide passed the 500 million mark in July, up from about 467 million at the end of last year.

British research firm Point Topic said China, including the special administrative regions of Hong Kong and Macau, contributed to that milestone by being the world's fastest-growing broadband market. It accounted for about 120.6 million lines, about a quarter of the total.

Gonzalez credited the steady expansion in and adoption of broadband infrastructure for the strong uptake in IPTV services, of which there were a total of about 38.5 million subscribers worldwide as of June.

IPTV uses a high-speed broadband connection to the internet, instead of cable, to deliver video services. "China ... represented the market with the most IPTV net additions in the second quarter, recording a total of 421,000 new subscribers," Gonzalez said. She said the market was expected to add IPTV subscribers at five times the rate of the industry leader France, so "it is likely to be the leading IPTV market next year".

France had about 9.4 million IPTV subscribers as of June, while third-ranked US had 6.5 million.

PCCW, which runs Hong Kong's biggest fixed-line telecommunications network, reported earlier that subscribers to its internet-based Now TV grew 4 per cent to more than 1 million in the first half of the year.

November 24 2008

World factory faces chips demand boom - Despite crisis, foreign players rush into mainland

Whether as a consumer or supplier, the mainland has a huge impact on the global semiconductor industry. Today's complex chips, or integrated circuits, play an important role in running and powering many of the devices and digital infrastructure people use - from mobile telephones, personal computers, refrigerators, cars and banking systems to the various networks that make up the internet.

When large manufacturing capacity began shifting from the United States and Europe to low-cost production sites in the past decade, the mainland became the world's largest consumer electronics production site and fastest-growing semiconductor market.

Consumption has apparently grown so fast the semiconductor industry now faces the challenge of meeting that demand, despite the current economic slowdown. "Semiconductor consumption in the Chinese market is growing at a faster pace than what the industry has anticipated," said Raman Chitkara, a global semiconductor leader at consulting firm PricewaterhouseCoopers.

"However, growth in production is not keeping pace with consumption, resulting in a widening gap between [chip] consumption and production in that market." In the latest update of the study series China's Impact on the Semiconductor Industry started in 2004, researchers at PricewaterhouseCoopers estimate the country's appetite for semiconductors has grown an average of 31.5 per cent a year since 2001, the last so-called bottom of the semiconductor business cycle.

For the same period, the worldwide market reached only a 10.6 per cent annual average growth rate. The mainland semiconductor market has two distinct parts: the domestic and the much larger export segment. Growth in exports is the dominant driver of integrated circuit use in the country. About 69 per cent of chips consumed last year went to various electronic products made for export, up from 64 per cent in 2005.

Semiconductor consumption surged 23 per cent last year to US$88.1 billion, or 34.4 per cent of the worldwide market, according to data from Beijing's CCID Consulting and the Semiconductor Industry Association in the United States.

It was the third consecutive year the mainland exceeded consumption in all other markets and the first time it reached a milestone by consuming more than 33 per cent of the chip industry's annual production. "While the Chinese government is implementing initiatives in the hope of increasing local production, we predict that this disparity is likely to continue in the near future," Mr Chitkara said.

That gap - the difference between integrated circuit consumption and semiconductor industry revenue - has grown from US$5.9 billion in 1999 to US$54.9 billion last year, according to PricewaterhouseCoopers. Mainland authorities expect the gap will continue expanding until at least 2010, which would motivate the government to boost chip production.

Chip consumption on the mainland would keep growing many times faster than the worldwide market average because of the continuing transfer of worldwide electronic equipment production to the country and the high average integrated circuit content of each electronic device, PricewaterhouseCoopers said.

It noted the country's share of worldwide electronic equipment production had increased from 9 per cent in 2000 to 20 per cent in 2005 and 27 per cent last year. The semiconductor content of electronic devices made on the mainland averaged 25 per cent in 2006 and 24 per cent last year, against the worldwide average of 20 per cent in those two years.

Amid the global credit crunch, analysts see the large, deep-pocketed foreign chip companies moving to bolster their presence on the mainland. Some of them could even go into buying up loss-making domestic semiconductor firms - fabless outfits that design chips and outsource manufacturing to foundries.

Vincent Gu, an analyst at market research firm iSuppli Corp, predicted that more than 100 of the 550 fabless domestic integrated circuit firms competing on the mainland would be gone in the next two years.

"Many companies are seeking buyers and four have already been acquired by foreign semiconductor firms in the past 12 months," Mr Gu said.

Slower chip sales growth on the mainland this year has apparently made things more difficult for those companies. ISuppli estimates the country's chip sales will rise only 6.7 per cent to US$81.7 billion this year, after years of double-digit growth.

"China's fabless [integrated circuit] industry is polarised, with about 50 companies achieving success and the remainder struggling to survive," Mr Gu said.

By contrast, US chip companies frequently win in emerging markets such as the mainland because of their advantages in technology and innovation. Taiwanese fabless companies, compared with their mainland competitors, have effective cost controls and are highly integrated, according to iSuppli.

Although large mainland manufacturers, such as computer maker Lenovo Group (SEHK: 0992, announcements, news) , dominate domestic chip consumption, the largest suppliers continue to be multinational semiconductor companies.

Market leader Intel Corp has kept investing in the country; it is building a US$2.5 billion fabrication plant in Dalian that will become operational in 2010, when the global economy will hopefully be on the rise again.

PricewaterhouseCoopers notes that many leading semiconductor companies will need to expand their presence on the mainland to fuel new growth. So far, much of the growth in the mainland's semiconductor industry is being driven by multinational, foundry and package, assembly and test enterprises.

PricewaterhouseCoopers says 32 of the world's top 70 semiconductor suppliers last year still had below-average shares of the mainland market.

October 21 2008

Sequoia funds Cernet expansion program

Sequoia, a United States venture capital firm that invested in Yahoo and Google, has provided financing for the expansion plans of Cernet Koncept Network, a mainland internet company targeting the country's 27 million college students, sources said. Cernet Koncept, operator of, is a subsidiary of the China Education and Research Network, a state-backed agency in charge of internet infrastructure construction on college campuses nationwide.

Neither Sequoia nor Cernet would disclose the financing amount but it was definitely a double-digit million US dollar capital infusion, according to Cernet Koncept chief executive Kuang Peng.

"Cernet is a one-of-a-kind company that enjoys a monopoly in its area," said Neil Shen, founding managing partner of Sequoia Capital China. "We are bullish on its outlook."

The fund would be used to develop new valued-added services to cater to mounting demands for information and recreation among college students, Mr Kuang said.  On the mainland, telecommunications operators provide customers internet access but the Ministry of Education set up the China Education and Research Network to build "information highways" for university students. Nearly 27 million students connect to the internet via the separate network, which covers 3,500 schools and research institutions nationwide.

"Basically, investors shun internet-related companies nowadays because it is difficult to create a profitable model," said Lu Liang, a manager at Hotung Venture Capital. "But it seems that Cernet Koncept can make a difference with a monopoly in the education market."

Sinomonitor, a business data supplier, estimates that college students spend 300 billion yuan (HK$341 billion), or 11,860 yuan per head, a year. "The media platform will also be appealing to big companies who want to advertise on it because university students are potentially the major powerful purchasers in future," Mr Kuang said.

"We hope to launch an initial public offering in 2011," he said. "The priority is the A-share market."

June 10 2008

Tax Filing Deadline for N-317 June 30th

The deadline for filing the new on-line N-317 is June 30th. Two critical reasons for filing on time:

1. The penalty for not filing is $1,000 per month up to $6,000.
2. The data Do Tax receives from industry will be critical in the discussion on the renewal of Act 221/215.

Visit the Do Tax site home page and look for "E-File Login" for instructions.

March 8 2008

Matsushita tries out home fuel-cell generators

Masanori Naruse jogs every day, collects miniature cars and feeds birds in his backyard, but he is proudest of the way his home and 2,200 others in Japan obtain their electricity and heat water — with power generated by a hydrogen fuel cell. The technology — which draws energy from the chemical reaction when hydrogen combines with oxygen to form water — is more commonly seen in futuristic cars with tanks of hydrogen instead of petrol, whose combustion is a key culprit in pollution and global warming. Developers say fuel cells for homes produce one-third less of the pollution that causes global warming than conventional electricity generation does.

“I was a bit worried in the beginning whether it was going to inconvenience my family or I wouldn’t be able to take a bath,” said the 45-year-old Japanese businessman, who lives with his wife, Tomoko, and two children, 12 and 9. But, as head of a construction company, he was naturally interested in new technology for homes.

Tomoko Naruse, 40, initially worried the thing would explode, given all she had heard about the dangers of hydrogen. “Actually, you forget it’s even there,” her husband said. Their plain grey fuel cell is about the size of a suitcase and sits just outside their door next to a tank that turns out to be a water heater. In the process of producing electricity, the fuel cell gives off enough warmth to heat water for the home.

The oxygen that the fuel cell uses comes from the air. The hydrogen is extracted from natural gas by a device called a reformer in the same box as the fuel cell. But a byproduct of that process is poisonous carbon monoxide. So another machine in the gray box adds oxygen to the carbon monoxide to create carbon dioxide, which — though it contributes to global warming — is not poisonous. The entire process produces less greenhouse gas per watt than traditional generation. And no energy is wasted transporting the electricity where it is actually going to be used.

Nearly every home in Japanese cities is supplied with natural gas for cooking or heating, which could make it relatively easy to spread fuel cell technology there. The potential for widespread use of fuel cells in bigger or more sparsely settled countries is less certain. Many American homes do not have gas service, for example. “There are not any real show-stoppers for this technology being used in the US,” said electrical engineering professor Roger Dougal at the University of South Carolina.

Mr Dougal said fuel cells were no more hazardous than any stove or water heater. Their major drawback was cost. “Ultimately, I expect that some fraction of homes will use this technology, but it will be a very long time before a sizable fraction does,” he said in an e-mail. Mr Naruse is paying one million yen (HK$74,000) for a 10-year lease on a test fuel cell for his home southwest of Tokyo from Matsushita Electric Industrial.

Matsushita, which sells Panasonic brand products, plans to offer fuel cells commercially next year. Other Japanese companies working on fuel cells for homes include Toyota Motor, which is developing fuel-cell vehicles, and electronics maker Toshiba. Vehicle maker Honda Motor is working with Plug Power, a fuel cell company in the US, to test a home fuel cell generator that also provides hydrogen as fuel for fuel-cell vehicles.

Honda hopes domestic use of fuel-cell generators will help make fuel-cell vehicles become more widespread because owners can refuel at home. It plans to start marketing the FCX Clarity fuel-cell vehicle this year in California; it will lease for about US$600 a month.

Fuel cells are expensive in part because they do not last very long. The latest model from Matsushita, for example, lasts about three years. But the technology is improving. Matsushita says the savings from using fuel cell-generated power will vary by household and climate, but it promises a cost drop of about US$50 a month.

Mr Naruse’s family — with three TV sets, a dishwasher, clothes washer, dryer, personal computer and air conditioner — saves about 10,000 yen a month. At the same time, conventionally generated electricity remains available to them, should the power generated by their fuel cell run low.

The Japanese government is so bullish on the technology it has earmarked 32.4 billion yen a year for fuel cell development and plans for 10 million homes — about one-fourth of Japanese households — to be powered by fuel cells by 2020.

Professor Bruce Rittman, director for the Centre for Environmental Biotechnology at Arizona State University, says the biggest benefit of fuel cell technology is that it emits only water — when there is a clean source of hydrogen. “Fuel cells are wonderful devices because they provide combustion-less, pollution-free electricity,” he said.

Tomoko Naruse said she might never have chosen a fuel cell if her husband had not insisted.

But she is happy her children are proud of it because they are learning about the threat of global warming in school. “I think my children are thinking about the future,” she said.

February 25 2008

Chatting with friends through a personal computer could soon be a thing of the past. To track buddies and locate points of interest while on the go, all you will need is your handset. By Bien Perez

Your online social network will soon have a new home: your mobile phone. Rather than using a personal computer to chat with friends or upload photos and video clips to online communities, new social networking technology encourages users to create and share content, connect with communities, search for people and points of interest and get maps and directions - through their handset.

Industry experts say the race is on to replicate the success of online social networking sites in the mobile phone space.

Leading the charge is GyPSii. At this month's Mobile World Congress, an annual industry trade show held in Barcelona, Spain, the Netherlands-based software and services provider unveiled its platform for connecting people and their online communities across networks and devices.

"GyPSii adds a new dimension to the social networking phenomenon. The device we all carry in our pocket, the mobile phone, is now empowered to record your life - where you are and what you do - and share it within your chosen social networking communities," says Dan Harple, founder and chief executive of GyPSii.

The technology relies on the satellite-based Global Positioning System (GPS), which can be used by friends to track each other and by all users to locate points of interest, such as shops, sporting venues and restaurants.

The GyPSii application, available in English, simplified and traditional Chinese, Korean, German, Spanish, French, Italian and Russian, is fully compatible with Windows Mobile operating-system-based handsets and Nokia's flagship, Symbian operating-system-based smartphones - the N95, N82, N73 and 6110 Navigator. It is also available for the BlackBerry range from Canadian firm Research In Motion.

A demonstration of GyPSii's geo-location mobile social networking capabilities, using the N95 smartphone, can be viewed on YouTube (keywords: "GyPSii demo on N95").

"GyPSii takes a virtual connection with your friends and turns it into a real connection," says Harple, who touts GyPSii as a lifestyle-changing application.

A GYPSII USER FROM overseas - let's call him Dan - strolls through the shops along Canton Road in Tsim Sha Tsui, mesmerised by the local colour and bargains. A trainers enthusiast, he spots some China-exclusive athletic footwear in a store. He takes pictures with his camera-phone, geo-tagging each subject with the time, location and his impressions. Dan then uploads the images from his phone to a personal eDiary, his space on the GyPSii website.

Dan can use a proximity search to see whether any members of his social network are in Hong Kong. GyPSii's friend-finder service reports that one of his Facebook buddies lives near Lan Kwai Fong. Dan sends a quick text message to confirm a meeting place and time. He views the map for the precise spot and starts on his journey across Victoria Harbour. Guided by the map and a personal navigation service that provides turn-by-turn directions, Dan finds his friend sitting in a cafe.

Having used a local mobile search, the two settle for dinner at a nearby Japanese restaurant. But there's a treat for Dan. The restaurant, which appeared among the sponsored mobile search results, has a special offer on his favourite dish. Dan praises GyPSii to high heaven for making his trip perfect - or so the sales pitch goes, anyway.

"Geo-location mobile social networking is still in the very early days. A lot still needs to be done but the potential is huge," says Bena Roberts, founder and chief analyst at British market intelligence firm BKI Media. "Everyone is looking at it because presence services are vital for mobile social networking and triggering advertising and coupons." ABI Research, in the US, claims there are more than 50 million active mobile phone network-linked community members worldwide. Operator SmarTone-Vodafone in Hong Kong, for example, has an initiative called iShow, which allows its users to create private forums and share their interests among friends via the internet on their mobile phones.

But it takes more than a theme to make mobile social communities strong. The demand is for real-time connection, mobile search capabilities, location-specific services and advertisement opportunities for the operator. "Traditional search on the internet, the driver for advertising-based revenue, has no real-life location-based context," says Harple. "Our platform provides a level of geo-targeting and advertising targeting that is unprecedented in the industry."

Recent findings from industry watchers seem to lend credence to that optimism. US-based research firm eMarketer forecasts the global mobile advertising market will amount to US$13.8 billion worldwide by 2011.

Advertisers are currently experimenting on Facebook, MySpace and niche social networks, according to eMarketer analyst Debra Aho Williamson. This year, advertisers are expected to spend about US$1.6 billion on such sites - a more than 70 per cent jump from the US$920 million they spent last year. "Social networking may get more than its fair share of media attention but it is not a fad," says Williamson.

US market research consultancy Ipsos Insight says the mobile phone has started its journey to become the dominant internet platform; 28 per cent of mobile phone owners worldwide used their handsets to go online in 2006. Another US research firm, iSuppli, projects a significant increase in global shipments of GPS-equipped mobile phones. These are expected to reach 444 million units by 2011, up from an estimated 161.9 million units last year.

Keen to drive consumer adoption faster, GyPSii has focused on the world's two fastest-growing mobile phone subscriber markets: China and India. For the mainland, it has partnered with Taiwan-based Dopod, a leading supplier of Windows Mobile-based smartphones and personal digital assistant devices. GyPSii software will be available for free download directly to Dopod users' handsets via the Dopod Club website ( next month. The club is an online community for mainland Dopod users.

In India, GyPSii is working with Mumbai-based Broadway and India Online Netcom. The launch is scheduled for this first quarter.

"I think the Asia-Pacific region will become the leader, as more subscribers are linked to capable devices," says Roberts of BKI Media. But she points out there must be strong demand from mobile phone network operators to justify the cost of producing more GPS-enabled handsets.

There are other advanced location-based mobile social networking platforms to consider, including those from Loopt and Intercasting Corp, in the US, and Roamware and m-spatial, in Britain. At present, Hong Kong cellular network operators provide limited social networking capabilities to their subscribers.

"I think location-based mobile social networking services have the potential to create great value for all of us," says Stephen Chau, chief technology officer at SmarTone-Vodafone. "However, it requires all operators to adopt a common platform to raise interest and market awareness."

Xinao founder bets 10b yuan on solar energy. Denise Tsang

Wang Yusuo, founder of liquefied natural gas (LNG) supplier Xinao Gas Holdings (SEHK: 2688), is betting 10 billion yuan on solar energy equipment production, making further forays into this fledgling and costly renewable energy segment.

Mr Wang is capitalising on the state policy of promoting sustainable energy sources. So far, 1.4 billion yuan in private funds have been spent on building a factory in Langfang, Hebei province.

It is expected to start producing thin film solar cells by the end of the year, said the chairman of the Hong Kong-listed, mainland-piped LNG supplier.

The state policy not only boosts demand for equipment on wind and solar power, but also lets investors achieve a viable return through incentives including preferential loans and a system whereby electricity distributors are obligated to buy renewable energy rather than energy derived from fossil fuel, Mr Wang said.

"The return [of my venture] is very high, partly because government subsidies and sweeteners help offset the greater economics of the investments," he said.

His plan is to expand the venture into a 10 billion yuan investment within five years, with factories to be set up in the group's Langfang headquarters and other cities in Hebei.

Funding would come mainly from a listing on the Hong Kong stock exchange and low-interest loans from China Development Bank, a policy lender, he said.

"We will seek a listing for funding of the venture, probably in Hong Kong in three years," he said. "This will differentiate the venture from Xinao, which focuses on piped-gas supply."

For clientele, Mr Wang targets electricity producers on the back of Beijing's call for Chinese independent power producers to increase green energy investments.

Beijing also wants to increase the nation's solar generation capacity from the existing 80 megawatts to 300 MW by 2010 and 1,800 MW by 2020. Last year, industry policy planner the National Development and Reform Commission granted about 260 million yuan in subsidies to renewable energy power projects, largely related to wind and solar energy.

Although solar power is known as the costliest form of renewable energy - estimated to be four to five times more expensive than power generated from fossil fuels - JP Morgan analyst Carrie Liu projected that the installed capacity of solar power would grow by at least 25 per cent each year in the next three to five years as a result of government support and growing awareness.

June 26, 2007

Mobile TV launch in mainland China next year

Mobile broadcast television, which uses television networks to transmit program signals to mobile gadgets, is to be launched in the mainland as early as next year ahead of the Beijing Olympic Games, said Angela Chan, the managing director of Beijing-based mobile television solution provider i-Vision. "The Beijing Olympics is a catalyst for the launch of mobile [broadcast] TV in the capital city by early next year. A total of three to four cities are testing the systems," said Ms Chan.

Government-controlled Beijing Television is working with i-Vision and mobile-telephone operators China Mobile (SEHK: 0941, announcements, news) and China Unicom (SEHK: 0762, announcements, news) , to allow people to view their favourite television programmes on their telephones and other hand-held devices.

Other services, such as booking cinema tickets, buying sportswear or accessing information from government or other sources, were also included in the package, Ms Chan said. Guangdong Television was working with partners to try out similar services in its region, said an industry source.

The government has issued several mobile television licences to the country's television stations, including Central China Television, Shanghai Media Group (SMG), the country's second-largest media group by revenue, and Beijing Television.

The country's first mobile television service operating in Shanghai, Dragon New Media, a unit of SMG, formed partnerships with China Mobile and Unicom to officially launch mobile television services in the city last month, after a trial of more than a year. Subscribers pay 10 yuan per month.

For SMG's service, programs are delivered to mobile telephones by streaming or downloading video clips over the existing 2.5 generation mobile-telephone network. "The quality is not very good. It also uses a lot of bandwidth. If too many people are using the service at the same time, it can slow down the service," said Ms Chan.

The mobile broadcast television, on the other hand, "is like a regular television set, which gets its signal from the air", said Ms Chan.

June 2, 2007

Customers queue to be scanned by a body scanner at a jeans shop in Beijing on Thursday, May 31, 2007. The body scanner can tell precise body shape of people and recommend fit jeans for them.

Experts call for action on climate change in HK

More than 300 meteorologists, environmental engineers, scientists and representatives from 26 countries or regions Thursday appealed to people of the world to take immediate action to mitigate impacts brought by global warming. The delegates attending the International Conference on Climate Change (ICCC) 2007 here, however, failed to send a strong signal to G8 countries' leaders who are going to meet next week in Germany to discuss issues like Kyoto Protocol and global warming.

"The warming of the climate system is unequivocal," said a tone-softer "Call for Action on Climate Change" passed by the conference when ending here Thursday. "Rapid and continuing progress in ...human and natural drivers of climate change has led to very high confidence that human activities are responsible due to increase in man-made greenhouse gas concentrations."
"Discernible human influences now extend to other aspects of climate, including ocean warming, temperature extremes, and wind patterns as well as many physical and biological systems," it said.

ICCC did try to send out a message to the world by urging members of governments, the private, scientific and professional sectors to take immediate action to face up to climate change, saying it is "a matter of urgency." The ICCC "Call for Action" appealed to governments of the world to set energy and climate policies incorporating principles of sustainable development, and ensuring that climate change and its management underpins all policies and to commit to targets in energy efficiency, carbon emissions capping and reduction.

"We did hope consuls of industrialized countries will send such messages back to their countries," Pro. Ir Otto Poon, chairperson of the Organizing Committee of ICCC, told Xinhua. "But we are not sure."

"Because the conference was organized by professionals, instead of governments," he explained.

ICCC was co-organized by the Chartered Institution of Water and Environmental Management Hong Kong, the Hong Kong Institution of Engineers, the Institution of Civil Engineers, Hong Kong Association and the Institution of Mechanical Engineers, Hong Kong Branch. During the three-day conference, engineering and environmental professionals addressed over topics on climate change, including the science of climate change and its correlation and impacts on carbon and markets, business sector, land and water, energy and infrastructure, buildings, and the responses and visions at global, national and community levels.

The conference also highlighted discussions on the United Nations' Intergovernmental Penal on Climate Change's work on the "Fourth Assessment Report."

China to build national hydrology databank

China will establish a national hydrology databank of water volume, quality and groundwater, so that authorities can share information efficiently, Vice Water Resources Minister E Jingping said on Wednesday. E said China's hydrologic regulations will take effect from June 1.

With absence of rules, it has for years been difficult for China to regulate hydrological monitoring, as the work involved various sectors, including water resources, power supply, land resources, construction, transport, agriculture and environmental protection. Hydrological data was collected by each of the sectors and not shared.

To make full use of the data, the hydrology regulations stipulate that hydrological institutions should store, process and compile data in accordance with requirements of the economic and social development. The data should be printed and published, according to the new rules.

February 8, 2007

Hong Kong Technology chief defends hi-tech status

Broadband services in Hong Kong had a penetration rate of 68 per cent - among the highest in the world - Secretary for Commerce, Industry and Technology Joseph Wong Wing-ping said on Wednesday. Legislative Councillor Tsang Yok-sing, of the Democratic Alliance for the Betterment and Progress of Hong Kong, had asked Mr Wong for details on Hong Kong's broadband status, noting that the city's computer network facilities had come in for criticism recently.

"It has been reported that during the International Telecommunication Union TELECOM WORLD 2006 held in Hong Kong in December last year, some representatives of the exhibitors criticised that the computer network facilities in Hong Kong were lagging behind those in other places," Mr Tsang told Legco.

But Mr Wong disagreed, replying that Hong Kong's facilities were world-class. "We have four third-generation [3G] mobile service networks which are capable of providing high-speed data transmission and wireless internet access services," he stressed. The technology secretary revealed that the number of 3G mobile service users exceeded 1.2 million. The overall penetration rate of Hong Kong's mobile services was 133 per cent, with more than nine million mobile accounts in a population of seven million - among the highest globally.

"Hence, overall speaking, we do not agree to the remarks that the computer network facilities in Hong Kong are lagging behind those in other places," emphasised Mr Wong. He noted that as of February 1, 27 companies had registered as class licensees for provision of public wireless local area network services in Hong Kong.

"Altogether, they have set up 1, 071 hotspots for wireless internet access in various districts." Mr Wong listed the hotspot tally for Legco: Central and Western 226,Wan Chai 106, Eastern 126, Southern 33, Sham Shui Po 36, Kowloon City 64, Wong Tai Sin 30,Yau Tsim Mong 199, Kwun Tong 64, Islands 32, Kwai Tsing 37, North 2, Sai Kung 14, Sha Tin 27, Tai Po 7, Tsuen Wan 22, Tuen Mun 28 and Yuen Long 18

He said the hotspots for wireless internet access were operated by the industry on a commercial basis. We understand that the hotspots in the Passenger Terminal Building of the Hong Kong International Airport are providing service free of charge. "For other hotspots, we have no information as to whether they are providing paid or free services," added Mr Wong. He explained that the government believed the industry operated best when left to market forces.

"In fact, one of the local fixed telecommunications network service operators announced its plan last week that it would boost the number of hotspots for wireless Internet access to 3,000." Mr Wong also said the Office of the Telecommunications Authority (Ofta) had now streamlined licensing procedures. "The government would consider proactively making available government facilities, such as lamp poles, at nominal rents to facilitate operators to install equipment for provision of wireless internet access services in public places." Ofta would launch another public consultation on licensing arrangements for broadband wireless access services soon, he said.

September 28, 2006

Neusoft Group Ltd, a leading Chinese software and solutions provider, announced yesterday that Intel Corp has agreed to invest 40 million U.S. dollars in the company to help it strengthen its presence in the health care and financing software market.

April 14, 2006

BlackBerry vs. Redberry in China By Arik Hesseldahl

Fresh from the resolution of a bitter patent dispute in the U.S., Research In Motion is bracing for another battle in the world's most populous nation

Hot on the heels of the settlement of a rancorous patent dispute, Research In Motion may have a new fight on its hands. Canada's RIM this year plans to launch its iconic BlackBerry wireless e-mail device in China, where it will go toe-to-toe with China Unicom, the state-run telecommunications company.

RIMM ), which in February agreed to pay a $612.5 million settlement with U.S. holding company NTP, has confirmed it's on track to introduce the BlackBerry in China by the middle of the year. Not to be outdone, China Unicom (CHU ) has launched its own BlackBerry-like wireless e-mail service.

And here's where it gets weird. China Unicom's service is not only patterned after the BlackBerry, but its name is inspired by the BlackBerry as well. "China Unicom's Redberry brand not only continues the already familiar 'BlackBerry' image and name, it also fully reflects the symbolic meaning of China Unicom's new red corporate logo," the Chinese company says in a statement.

MANY RIVALS.  Having competitors with seemingly similar offerings is nothing new to RIM. With some four million BlackBerry devices in use around the world, RIM competes with Palm (
PALM ), Hewlett-Packard (HPQ) , Nokia (NOK ) and Motorola (MOT ) on the device front. Meanwhile its software rivals include privately held Good Technologies, and Microsoft (MSFT ), among others.

RIM has been negotiating for the right to do business in China for several years and according to published reports is poised to announce a deal with China Mobile (
CHL ), a Hong-Kong based carrier with 284 million subscribers, compared with China Unicom's 121 million.

The technology behind the Redberry service comes from a Beijing-based outfit called Facio Software, which sells a software product it calls Uni Pushmail. The company didn't immediately respond to requests for comment, but its chief executive is Tony Chan, a Microsoft alum whose career includes stints at Rhapsody Software, which was acquired by Brocade (
BRCD ) in 2003 and Vitalsigns, which was later acquired by Lucent Technologies (LU ).

So could RIM pick a trademark fight with China Unicom? RIM isn't commenting on the matter, but a source familiar with the company's thinking says RIM doesn't consider the Redberry service much of a threat.

FAME FACTOR.  Still, should RIM opt to battle in court, it could, says Jim Fang, a lawyer with the Seattle-based firm of Davis Wright Tremaine who specializes in helping western firms navigate China's legal system. "The key to asserting a trademark in China is whether or not the trademark you're asserting is famous," he says. "If your trademark is famous you're on stronger ground, even if your trademark isn't registered."

But litigating in China is not for the timid, says Stephen Baker, a trademark lawyer with New York-based Baker and Rannels. Baker's firm is working on a case involving the golden fleece logo popularized by apparel maker Brooks Brothers. A Chinese company began using the logo even though Brooks Brothers was established with retail stores in the country.

"It's a clear case where the logo came from, and we'll probably win, but just presenting our evidence has taken reams and reams of paper," says Baker. In another case, it's taken a year for the Chinese trademark office to even respond to legal filings, he says.

SMALL DANGER.  Meanwhile, analysts aren't paying much attention to the prospect of a RIM rival in the vast Chinese wireless market. "The reality is that there are already a lot of competitors out there, and they're trying to set up their own solution," says James Faucette, who covers RIM for Pacific Crest Securities in Portland, Ore.

"RIM makes a healthy monthly profit per subscriber, and anyone who thinks they can provide 80% of the solution and capture some portion of the market that RIM is going after will give it a try," Faucette says. "But I don't think there's anything more ominous here than what's already available from Good or Microsoft."

RIM could use a successful Chinese launch. The company, which generated $2 billion in fiscal 2006 sales, finished its fourth quarter with an $18 million profit on revenue of $405 million. The period was marred by the payout to NTP to end long-fought patent litigation (see BW Online, 3/03/06,
"BlackBerry Won't Get Squashed"). The dispute had threatened to shut the service down in the U.S., causing uncertainty that slowed sales. A beachhead in China -- Redberry or no -– could go a long way to helping RIM bounce back.

April 12, 2006

China Phone Operators under pressure - Craig Stephen

The convergence of mobile and fixed-line services and devices is making life difficult for carriers. Phone calls over the internet were dismissed not long ago as a fringe service for a tech-savvy few that mainstream telecoms could ignore.
But as estimates for Skype users reach 75 million worldwide and providers such as Yahoo and MSN enter the fray - often with video services as well - this is no longer the case.

Service providers that lack their own network infrastructure are not just taking away traditional voice revenue from carriers but are forging a new generation of highly price-sensitive and demanding consumers.

This makes planning a network for a converged fixed and mobile marketplace much more challenging for carriers.

One trend in the Asia-Pacific is an increase in price sensitivity among consumers due to competition from non-facilities-based providers, according to Alcatel Asia-Pacific president Christian Reinaudo.

He identified two other key end-user trends: a demand for multimedia and video services and a desire for simplicity and mobility where the same service was available on any device. Such a combination of rock bottom prices and converged mobile and fixed services might sound good for customers but makes life difficult for operators.

"Customer price sensitivity means carriers must squeeze [operating and capital expenditures] at a time when networks are asking for substantial investment to develop new services," Mr Reinaudo said.

Matt Crokett, general manager of the wired division at Telecom New Zealand, said expectations among customers had grown substantially. "[Service] must be simple and complete. That means complex and nasty for us."

Vendors such as Alactel expect more carriers to commit to "transformational" network upgrades to satisfy new customer demands. But with the telecoms industry facing a period of unprecedented change, such investments will not be for the faint of heart.

According to Telstra chief technology officer, Hugh Bradlow, making technology invisible to use and manage for customers was crucial for success. He cited Telstra research that showed customers watching video on demand would pay only for the convenience of the application - but would not pay a premium above the cost of renting from a video store.

The experience of Hong Kong incumbent PCCW, which operates in a significantly more competitive market than Telstra faces, might show that customers demand even more. PCCW has recently been offering free pay-TV and now free 3G services to win customers.

Industry experts warned that convergence of fixed and mobile services and devices was a global trend that would only intensify competitive pressure for operators. If a study by industry consultant Ovum is correct, Hong Kong will be at the forefront of this trend. The regulatory road map has a consultation paper on moving to a unified licensing regime expected later this year.

Alcatel director of global marketing, David Hills, said that while technology was playing a part in fixed-mobile convergence, the driving force was "a competitive dynamic based around revenues".  He said fixed voice revenues peaked globally in 2003 and mobile operators now faced the prospect of growth stagnating for voice services.

While mobile operators generally did well in this period as they won voice traffic from fixed-line operators, the shoe could now be on the other foot with converged fixed and mobile services.  New devices that can operate on multiple broadband and wireless networks such as BT's Fusion phone will become increasingly common as a strategy for fixed operators.

David Kennedy, senior analyst at Ovum Consulting, said mobile operators would develop more proactive fixed-mobile strategies, led by location-based pricing.  New approaches are emerging. Some operators in Europe are using the high capacity of 3G networks for cheaper voice at home that allows call substitution. Hutchison Whampoa's 3 service has begun offering Skype calls on its 3G network in Europe.

April 8, 2006

Venture capital key for high-tech industry in China

Developing the venture capital market is crucial for China's fledging high-technology industry, the minister of science and technology said yesterday. Xu Guanhua said China must speed up its stock exchange reform and develop venture capital funds to transform the country into a global technological power. Mr Xu, attending the eighth China Venture Capital Forum in Shenzhen, also called for more small and medium-sized enterprises to be listed on the Nasdaq-style second board in Shenzhen.

"Small and medium enterprises are the backbone for high-technology development," he said. "About 66 per cent of patents filed in China [last year] were by small and medium-sized enterprises. They are our main source of technological innovation." However, he said the high risk and uncertainty of technological innovation made it difficult for such firms to borrow money from commercial banks, and it was unreasonable to ask the government to fund all the research efforts. Mr Xu said China should build up a vibrant venture capital market similar to that in the United States or Europe.

"Venture capital funds could provide money for the SMEs and reduce the risks through risk-sharing. It has been proven to be the key to successful hi-tech development in many countries," he said. China's worldwide ranking in the development of information technology fell nine places to 50th position last year, losing touch with regional leaders such as Singapore, South Korea and arch-rival India, according to a study released by the World Economic Forum last month. Lack of readily available venture capital was one reason.

Mr Xu said China's capital market had many structural problems and badly needed reform.

He said many Chinese companies had to go overseas to raise capital and the lack of a mature capital market had become a great obstacle for the country's high-technology development.

His view was echoed by National People's Congress vice-chairman Cheng Siwei, who said the mainland's venture capital market was dominated by foreign players and China should build up its own sector.

"We lack expertise in this field and we don't have enough qualified specialists," Mr Cheng said. "We also need to improve our system and establish an exit mechanism for venture capital.

"Foreign investors are not here for charity. Their investment could help us develop new technology. But at the same time, they are also entitled to share the fruits of our technological innovation and profits."

Mr Cheng also called for the lifting of the ban on initial public offerings on the mainland stock exchanges so as to encourage venture capitalists to invest in SMEs. The government imposed the ban last year as it introduced reforms to make US$250 billion of state-owned shares tradable.

"It would be difficult to allow mega-offerings such as China Construction Bank and Bank of China to float on the domestic bourse. But for SMEs, each would raise a mere 200 million to 300 million yuan," Mr Cheng said. "The impact is small but the funding would help these firms grow."

March 21, 2006

China 'blocking VoIP calls for two years'

China has moved to protect its fixed telephone line business by banning free internet telephone services for at least two years, the Financial Times reported on Tuesday. Wang Leilei, chief executive of Chinese internet portal group Tom Online, which has a joint venture with Luxembourg-based telephony provider Skype, said China would not issue any licenses for computer-to-telephone calls until 2008.

The government "is not going to issue VoIP [Voice over Internet Protocol] licenses until 2008," Mr Wang told the newspaper.

The move would probably be major setback to Skype, which was reportedly in talks last year with Chinese telecom operators to launch its computer-to-telephone service, SkypeOut. Mr. Wang, whose company is controlled by Hong Kong's wealthiest businessman Li Ka-shing, played down the decision.

For Tom Online, "our strategy is to grow our user base. With a big user base, there is a lot you can do. Revenue [from SkypeOut] is not important to us because we have not put in a lot of cost," he said. Skype is a leader in VoIP and provides a subscriber service that enables Web users to make ultra-cheap or free phone calls using an Internet connection on their computers.

Skype's computer-to-computer calls are free while computer-to-telephone calls are charged at rates often much less than with fixed line services. China Telecom has described Skype's services as illegal and the newspaper said last year that China was experimenting with software in Beijing, Shanghai, Guangzhou and Shenzhen to block them.

Fixed-line operators are concerned that SkypeOut could undermine their core business. Last September United States technology group Verso Technologies admitted that it had sold software to an unnamed major Chinese telecoms firm that would allow China to block such telephony services.

March 13, 2006

China awash in venture capital By STUART BIGGS and MICHAEL LOGAN

Record fund-raising combined with a dearth of deal-making has caused a venture capital (VC) overhang in China, leading to higher valuations and some observers to warn of a boom and bust in the most competitive sectors.  According to China-based venture capital research company Zero2IPO, mainland and foreign venture firms raised a record US$4 billion last year while investments fell 16.7 per cent over the previous year to US$1.057 billion.

A venture capital overhang results from too much cash chasing too few deals, and while the situation seems like a boon for China's entrepreneurs it is widely regarded as a negative for the industry due to spiralling deal valuations and a tendency to concentrate on blockbuster expansion investments over traditional start-up venture funding. The relative nascent history of VC funding in China is characterized by multimillion-dollar deals with companies already boasting proven records in revenue and earnings. Online gaming company Shanda Interactive received funding from Japan's Softbank on this basis in 2003. Softbank also invested in Focus Media's first round in the same year when the display advertising company was already making profits.

Last week, the mainland's Oak Pacific Interactive secured US$48 million in late stage financing - the largest ever VC deal in China.  "The tendency to go with proven track records and proven revenue models was the right one in the past. There were many companies that had already developed through several rounds of self- or local government-raised capital, so when it came to securing institutional financing they already had proven track records," said Duane Kuang of Qiming Venture Partners.

"In addition, the multiples from investing in start-ups did not make them worth the risk [at around five times revenue compared with two or three times for established firms]."  Mr. Kuang said multiples were now right for more traditional "Silicon Valley-style early stage investments" at about 20 times. But he warned the most popular sectors, internet and wireless services, were already showing signs of overheating.

Vincent Chan, chairman of the Hong Kong Venture Capital and Private Equity Association and vice-president of Jafco Investment, said an influx of US venture capital firms was pushing up valuations. "The pot is getting bigger. [Valuations have] gone up even higher. United States VCs are setting up new offices in Beijing and Shanghai every month," he said.

But much of the focus was concentrated on mid- to late-stage investments. "There are still some VCs willing to invest in the early stage or pre-revenue stage," he said. "However, many former small fund managers have been able to raise much larger funds [this year and last]. "There is a general tendency for them to work on bigger deals. Some have changed focus from venture into growth capital and compete with the traditional expansion capital investors.

"I believe there is a funding gap between early stage and late stage." That may be putting it mildly. Shanghai-based venture capitalist Adam Bornstein warned of "a massive glut" in mid-stage funding.

"In the US there are well-organized angel investor communities and a number of early stage VCs nurturing young entrepreneurs that ensure a fertile middle ground," he said. "However, in China there really isn't anything like this. The reality of the situation is that this overhang ... is polarizing the market, whereby funding is flowing to ventures with higher valuations while starving promising early-stage opportunities."

This trend is not surprising. With so many VCs raising substantial funds in the past 12 months, including Qiming, SAIF Partners, Sequoia Capital China, Intel Capital and IDG Technology Venture Investments, the onus is now on them to deploy the capital.

Time frames might differ but large funds usually chased larger deals of at least US$4 million, Mr. Bornstein said. If the process of due diligence was the same for small deals as well as large ones, it made sense to concentrate on the latter.

"These VCs [also] can't justify dipping into ventures priced below US$4 million [pre-money] because if they did the VC would end up owning a majority of the company, and there would be little upside for the entrepreneur."  But few venture capitalists interviewed by the South China Morning Post seemed unduly put off by the higher valuations in the most sought-after sectors. Jafco this month has poured an undisclosed amount into a mainland mobile advertising firm that had been incorporated only in January.

But Mr. Chan said not every deal could be early stage because of the time and resources involved in guiding their development. Cadol Cheung, Asia managing director for Intel Capital, acknowledged expectations of higher valuations among China's entrepreneurs was increasing but argued that whether they had become unrealistic ultimately depended on the value gained at the exit.

"If the exit market is good then the valuations will rise accordingly," he said. "Wireless is hot right now in VC interest, but it is also a strategic interest for Intel." Others saw opportunities away from the buzz, such as Mr. Kuang, who predicted better value and good growth prospects in semiconductors and software.

Meanwhile Mr. Bornstein, a smaller player in comparison with the large international funds, appears to enjoy looking at opportunities others overlook. "We get to pick the ripest ideas and most talented management teams," he said.

December 21, 2005

Top mainland leaders have voiced strong support for homegrown third-generation mobile communication technology.

Their backing removes a major stumbling block and allows for the long-delayed issuance of 3G licences as early as the first quarter of next year.

President Hu Jintao and Premier Wen Jiabao have both stressed the need to support the largely home-grown wireless communications technology TD-SCDMA (time division synchronous code division multiple access) despite strong market preferences for the other two international standards, W-CDMA and CDMA2000, according to industry officials.

They made up their minds after leading mainland scientists supported the TD-SCDMA standard and wrote to the leaders asking for their support. Among the proponents are Lu Yongxiang , president of the Chinese Academy of Sciences, Xu Kuangdi , president of the Chinese Academy of Engineering, and Zhou Guangzhao, chairman of the China Association for Science and Technology, representing the mainland's three highest bodies of scientists.

The clear support from the top is expected to end intense internal debates over TD-SCDMA and stiffen the resolve of the officials at the Ministry of Information Industry to favour the homegrown technology when issuing 3G licences.

China Telecom and China Netcom, the two major fixed-line operators, are expected to receive TD-SCDMA licences in the first quarter of next year, ahead of other operators.

Xi Guohua , a deputy minister of the Ministry of Information Technology, said on Monday that 3G technology had matured and several key technological components of TD-SCDMA had proved capable, which meant it deserved a place in China's telecom market.

It remains unclear when, or if, the other two standards representing leading western technologies might be authorised. But the general market consensus was that China Mobile, which operates extensive GSM (global system for mobile communications) networks, will be authorized to adopt the W-CDMA standard for 3G, and China Unicom, which has a large CDMA network, will be able to use the CDMA2000 standard for 3G.

The government has been faced with intense lobbying from the foreign telecom companies supporting the W-CDMA and CDMA2000 standards, which are in use in the US, Europe and Japan.

December 9, 2005

Beijing had approved a homegrown audio-video standard, state press reported on Thursday, a move that could challenge current DVD coding formats and pave the way for China to set new global industry standards.

Beijing had approved a homegrown audio-video standard, state press reported on Thursday, a move that could challenge current DVD coding formats and pave the way for China to set new global industry standards. The approval for commercial use of the digital coding and decoding technology known as AVS would also save China more than US$1 billion (HK$7.8 billion) in royalty fees, the China Daily said, citing the Ministry of Information.

The new standard could further add oil to the fire in the battle between two competing formats - HD DVD and Blu-ray disc being developed by Japanese giants. Both technologies are vying to become the next generation of audio-visual technology used in digital TVs, laser discs, digital video, video conferencing and 3G-based data services.

HD DVD is a format supported by semiconductor and software giants Intel, Microsoft and Toshiba while the Blu-ray disc is backed by Sony, Apple Computer, Hewlett-Packard and Dell. AVS, which is compatible with the HD DVD system, is expected to begin operating by the end of December in mobile TV services. The report estimated that Chinese demand in the next decade could eventually range between 300 million and 500 million coding chips.

"We expect it to be widely used in domestic industries and hopefully become the national standard," Huang Tiejun, secretary-general of the AVS working committee at the ministry, was quoted as saying in the report. The announcement marks China's latest attempt to leverage its growing manufacturing might to dictate its own terms and free itself from royalty fees paid for patents held by European and United States companies. It has been a bumpy road so far as Chinese engineers have researched home-bred technologies in DVD, 3G mobile phone systems and wireless computers.

In 1999 China began experimenting with its own DVD standards, creating EVD, an effort that failed to take hold commercially due to legal wrangling between developers and manufacturers. Two years ago China tried to force foreign companies wanting to sell wireless computer (WiFi) equipment to support its proprietary and secret encryption standard called WAPI.

Beijing was forced to scrap its plans for the system when companies such as Intel threatened to stop selling their products in China. For AVS to succeed the standard would have to be widely adopted. That may occur as it has been included in China's 11th five-year plan, meaning it will receive the full-backing of the government until 2010.

China's IT investment balloons - Gartner sees country accounting for quarter of business technology spending in Asia-Pacific - BIEN PEREZ

China's growing competitiveness will lead to another record year of investments by mainland businesses on communications and information technologies, says research firm Gartner. Total enterprise information technology spending - including hardware, software, telecommunications and IT services - is expected to grow 8.6 per cent on the mainland next year to US$62.28 billion (HK$486 billion) from an estimated US$57.324 billion this year.

The mainland would continue to account for more than a quarter of total business IT spending in the Asia-Pacific next year, according to Dion Wiggins, Gartner vice-president and the group's Hong Kong-based research director. "The growth of China's IT market is continuing to accelerate because of its efforts to become more competitive," Mr Wiggins said.

He predicted China would have the largest English-speaking population in Asia by 2008, which would have a significant impact on business and IT worldwide. With the language barrier removed, mainland firms are expected to rival India and other English-speaking markets in the region in working on a wider range of markets and business segments. "Research and development in China is also rising as a percentage of its GDP," Mr Wiggins said, noting that the growth in this segment of IT spending had come from both domestic and multinational businesses. These included IT players such as Lenovo, Huawei Technologies, IBM, Sun Microsystems and Microsoft.

That view was endorsed by Scott Kriens, chief executive at United States-based security appliance and router maker Juniper Networks, as he noted: "All of our wireless security software development is done by our engineers in Beijing." Mr Wiggins also stressed an oft-repeated prediction that Hong Kong, traditionally the gateway to China, would see a decrease in its importance in favour of Beijing and Shanghai.

The negative outlook for Hong Kong is already reflected in the forecast enterprise IT spending for the city next year, which is down 1.6 per cent to US$6.492 billion from US$6.598 billion this year. Gartner forecast overall enterprise IT spending in the Asia-Pacific would reach almost US$210 billion next year, as worldwide enterprise IT spending hits US$1.768 trillion the same year.

But in the event the avian flu threat turned into a full-blown outbreak in China and other parts of the world, Mr Wiggins said: "All bets are off."

August 16, 2005

Three technological difficulties for China's lunar probe

If there is no major problem, Chinese people will have their long-cherished moon dream realized in 2007, said Luan Enjie, chief commander of China's lunar orbiting program on August 15. Luan said, before that, three technological obstacles need to be conquered.

First, orbits designing. Since the program involves the earth, the moon and the satellite, the designing for the orbit of the moon-probe satellite is more complicated than that for the relative movement of earth and satellite. Luan said, deep space exploration is characterized by the limited "launch window" (a term used to describe a time period in which a particular mission must be launched). The moon, the earth and the launching complex are all moving so a proper position for all of them is needed, but the period for timing is rather short.

Second, the tracking system. The most difficult test for lunar probe is on the tracking system, whose transmission should be able to reach far enough. Currently the longest distance China's satellites ever reached on geosynchronous orbit is about 40, 000 kilometers. But the moon is about 400, 000 kilometers from the earth. This brings a challenge to the transmission capability of the tracking system. "During the lunar exploration, we should be able to hear and see what's going on with the probe, and the moon orbiter Chang'e-I should also be able to hear us. This is also a challenge to China's deep space tracking technology," said Luan.

Third, environment. Luan said, the moon probe is made on the earth, but the temperature difference is 300 degree. It must be guaranteed that the materials, equipment and machinery work well under such a condition. This is a test for China's aerospace technology, the designing capability of technicians as well as the comprehensive ability of China in space activities.

Sources say, these difficulties are as well the areas of innovation. Expert says, the scientific and technological questions mentioned above must be solved for the program to succeed. However, since they involve the forefront areas, if China solves them, it will achieve a leap forward, which will be a strong driving-force for the country's scientific and technological development.

August 3, 2005

China's fuel cell technology advanced in the world

Zhang Huamin, research fellow at Dalian Institute of Chemical Physics, CAS, said recently China has made many breakthroughs in recent years on the innovation of key fuel cell materials and technologies and has joined the rank of countries advanced in this respect.

According to Zhang, in future energy systems centered on hydrogen, fuel cells using hydrogen as fuel would no doubt be the key.

Zhang said the Chinese government places great importance on the research and development of fuel cells. In recent years China has developed 100-watt level to 30-kilowatt level hydrogen-oxygen fuel electrodes and fuel cell electric cars etc. Fuel cell technologies, particularly the proton exchange membrane fuel cell (PEMFC) technology, achieved fast progress, having developed PEMFC batteries of many specifications such as those of 60-kilowatt and 75 kilowatt.

China also developed fuel cell engines with a net output of 40 kilowatt for electric sedans and of 100 kilowatt for urban passenger cars, making China's fuel cell technology one of the most advanced in the world.

April 13, 2005

China launched the APstar 6 at the Xichang Satellite Launching Center in the southwestern province of Sichuan on Tuesday. It was the country's first commercial launching of telecommunications satellite since 1999. At 20:00, a Long March 3-II rocket carrier sent the APstar 6 into the skies. Twenty-five minutes later the rocket and the satellite separated as planned.

The Long March 3-II is the most powerful of the Long March rocket family, being able to bring a load of as much as 5.1 tons into orbit, which can meet different demands of commercial launchings in the world market. It was the 84th launch of the Long March series and the 42nd successful operation of Long March rockets since October 1996.

The APstar 6 is manufactured by the French company Alcatel for the owner and operator the APT Satellite Company Ltd., Hong Kong. The China Great Wall Industry Company is the general contractor of the project. The company will also launch the APstar 6B with a Long March 3-II, according to sources with the Great Wall. The APstar 6 is 4.6 tons in weight and has 38 C channel transmitters and Ku channel transmitters.

March 5, 2005

Energy law benefits equipment making - Wang Ying

Renewable energy utilization equipment manufactures will expect a host of business opportunities, benefiting from the renewable energy law passed last Monday, according to an official from the National People's Congress (NPC). "Output of China's renewable energy equipment manufacturing industry is expected to top 100 billion yuan (US$12 billion) by 2020," Wang Fengchun, deputy director-general of the Research Department under the NPC's Environment Protection and Resources Conservation Committee yesterday told an expert forum on the renewable energy law. "That will be a five-fold increase from the current level," Liang Zhipeng, deputy director of the Centre for Renewable Energy Development of Energy Research Institute under the National Development and Reform Commission (NDRC), told China Daily.

According to Liang, the production of China's renewable energy equipment manufacturing industry totals some 20 billion yuan (US$2.4 billion), more than 10 billion yuan (US$1.2 billion) of which comes from the solar energy equipment making sector.

"The budding industry of renewable energy equipment production," said Wang, "will also provide more than 2 million job opportunities for the country."

The new law, after more than two years' preparation, will take effect next year and aims to encourage the use of renewable energies including solar, wind and bio-mass energies. A series of incentives like tax reduction, favorable policies and financial allowance will be adopted to activate the renewable energy equipment making market, according to Liang. The major obstacle that hobbles the renewable energy equipment making industry is the disadvantaged technologies, according to industry analysts, except the sectors of solar energy utilization for water heating and hydra-power.

NDRC's Liang told China Daily: "The country's technologies in the two sectors sit on the world's cutting edge."

China's production of solar energy water heaters accounts for 76 per cent of the world's total, said Huang Ming, president of Himin Solar Energy Co Ltd in East China's Shandong Province. Huang said the newly-passed energy law would bring more opportunities to his company. Himin, the country's largest solar energy product maker, has invested 1 billion yuan (US$120 million) to cash in on the solar power generation industry,

Liang with NDRC pointed out that the country, however, lags behind the world's leading countries in wind energy utilization equipment production, as the usage of wind power is not very popularized yet.

March 3, 2005

Renewable energy law creates new opportunity

The Standing Committee of the National People's Congress of China endorsed on Feb 28 the Renewable Energy Law, four months earlier than expected. To have a better understanding of significance of the law and the way to boost development of the renewable energy in China, the PD journalist interviewed Feng Zhijun, vice director of the Environment and Resources Commission of the National People's Congress of China.

Huge potentials for development of renewable energy in China

According to Feng, renewable energy refers to non-mineral fuels that can be maintained in a constant supply over time from the nature, including wind power, solar energy, geothermal energy and marine energy etc. This type of energy does not cause pollution and discharge no green house gases basically.

Within the future 20 to 30 years, the renewable energy that can be exploited and applied equasl to 800 mln tons of standard coal annually in China. In 2003 the installed capacity of wind power generator had reached 570, 000 kilowatt in China. China's production and application of solar energy heaters is leading the world. A total of 52 mln square meters have been applied in 2003, representing 40 percent of the total amount of the world. The annual production has amounted to 12 mln square meters. The installed capacity of biomasses energy generator has reached 2 mln kilowatts. Researches and experiments to extract solid and fluid fuel from biomass are underway. To sum up, China has already attained preliminary technology and laid foundation for application of renewable energy and has created conditions for large-scale commercialization of renewable energy.

There is still difference compared with foreign countries - Despite the progress made in this regard, China still falls behind of most developed countries in terms of growth rate and quality. It is even behind of developing countries like India and Brazil. In the past China lacked laws and regulations that support development of renewable energy. The economic policies were not constant and stable in supporting the renewable energy. Part of key equipments was dependent on import.

The Baoding Tianwei Yingli New Energy Resources Co., Ltd is just one instance. The company is established as a model program for the solar energy industry by the State Commission of Planning. In 2004 its production capacity expanded to 70 mln watts by applying foreign investment of 400 mln yuan, hence ranked No. 3 in the world. But more than 90 percent of its products are exported to Europe and America. This doesn't suggest China is not in need of solar energy, but showing laws and favorable policies for renewable energy have boosted demands for renewable energy in foreign countries.

Bright prospect - Judging from the development trends in all localities and China's objectives, the consumption of renewable energy will probably increase to 10 percent of the country's gross energy consumption by 2020. The renewable energy will hopefully undergo great development and become one of important substitute energies following coal, natural gas and petroleum should the government backs it with policies. It will play an important role in securing China's energy safety, supporting sustainable development of economy and society of China, said Feng.

At present production and consumption of petroleum energy produce about 90 percent of sulphur dioxide and nitrogen oxide, and 70 percent of dust in China. Enormous environmental benefits will be attained if China achieves the goal it set in renewable energy by 2020.

The Renewable Energy Law stipulates responsibilities of the government and society in developing and applying renewable energy; establishes a series of policies and measures, including objective for long and mid-term quantity and development plan, encourage development of renewable energy industry and technical research, put up special fund for the renewable energy. The law will guide and motivate economic bodies home and abroad to participate in development of renewable energy; boost long-term development of the renewable energy, making it important in the energy structure. It will effectively eliminate environmental problems caused by burning of mineral fuel and promote sustainable development.

February 28, 2005

Girija P. Pande from Indian firm TATA delivers a speech at the first China-India Software Industry Summit, held yesterday in Beijing. China and India's software industries are forging closer ties, as the world's two most populous countries are becoming the most favoured offshore software outsourcing destinations. Beijing is extending a warm welcome to Indian software and service suppliers, in the hope that they will set up shop in the lucrative information technology market of the nation's leading software hub.

December 31, 2004

Cow calf born to China's first cow cloned from frozen cells

China's first cow cloned from frozen somatic cells two years ago gave birth to a healthy cow calf Wednesday in east China's Shandong Province, a local zoologist confirmed on Thursday. The calf, born at 9:06 a.m., weighed 45.5 kg and was 80 cm long at birth, said Zhang Qingyun, managing director of Kelong Animal Husbandry Industrial Co., Ltd. based in Liangshan County. An hour after birth, the calf stood up, measuring 90 cm tall, and drank up one kg of her mother's foremilk. The calf's mother, Wei Wa, became pregnant on March 20, 2004, through artificial insemination and has remained healthy all during her pregnancy, according to Zhang.

Wei Wa was born on the same farm on Oct. 16, 2002. Her birth caught the attention of worldwide zoologists because she was China's first cattle ever to be cloned from frozen somatic cells of an adult cow. She was cloned from frozen epidermal cells extracted from the ears of a most productive dairy cow on the farm, under a high-tech program between the Shandong company and China Agricultural University in Beijing. The Shandong company has cloned 26 more cattle with the same technology over the past two years and three of Wei Wa's "younger sisters" are between six and eight months pregnant. Company sources say they expect more calves to be born after February 2005.

Liangshan County of Shandong Province is home to a major gene modification research center under China's High and New Technology Research and Development Program (Program 863).

September 24, 2004

Huawei Technologies, China's largest telecommunications equipment maker, is not your average mainland firm. From its slick campus headquarters on the outskirts of Shenzhen and its bevy of pricey Western management consultants to its marching drills, Maoist slogans and collectivist ownership, this is one Chinese company that stands out from the pack. It has also become a serious international player in a high technology business - a feat accomplished by very few of its mainland peers

September 8, 2004

The Pakistan government will soon invite foreign companies, including Chinese equipment suppliers Huawei Technologies and ZTE Corp, to participate in the country's biggest telecommunications privatization plan.

The Hong Kong government is to adopt a stringent new policy to streamline public sector information technology investments. The move is designed to sharpen the focus of the bureaus and departments on the return on investment of e-government activities.

Acer chairman, chief executive and founder Stan Shih once wrote that many strategies employed by the companies in the west cannot be applied directly in Asia. And true to form as a creative industry leader, Mr Shih, in his final year at Acer, named Gianfranco Lanci as the firm's new president.

July 22, 2004

A man checks his messages on his mobile in Xian. The new mainland telecom law will require different carriers to co-operate with each other.

China Mobile (Hong Kong), the world's largest mobile carrier by subscriber numbers, posted its second consecutive month of weak subscriber growth, adding just 2.71 million users in June.

China United Telecommunications Corp Ltd, the listing arm of China Unicom Corp in the domestic A share market pledged yesterday that the massive 4.5 billion yuan (US$542) it raised through share placements would fuel its expansion and further enhance its competitiveness.

The Royal Philips Electronics is to make itself over from a technology and manufacturing-driven company to a market-driven one with a new positioning of its brand. China has become a trial ground for that strategy, said a top company executive.

July 10, 2004

China telecommunications suppliers are grabbing overseas sales by targeting Africa, Southeast Asia, the Middle East and former Soviet republics - price-sensitive markets often skipped by major western brands.

China's decision to scrap tax breaks for domestic semiconductor manufacturers after pressure from the United States would only have a limited impact on chipmakers, industry experts said.

July 6, 2004

Microsoft is pursuing an aggressive staff recruitment drive in China with an eye to creating one of the most formidable software research and development facilities outside of the United States.

More than 500 days since taking the helm at IBM's worldwide Linux business, Jim Stallings says the deployment of open-source software is reaching critical mass in Asia because of government demand.

March 16, 2004

China rules: It is up to foreign firms to comply with China's Wapi standard because of China's right to set rules for its industries, says Avaya chief executive Donald Peterson.

A lengthy trade crisis over China's wireless local area network (WLAN) encryption standard might benefit the information technology rivals of Intel and other firms adversely affected by the mainland policy, industry experts said.

The dotcom bubble may have burst but the local internet domain-name business is witnessing a slow revival. Last week, Hong Kong company Essatte sold the domain name to United States software developer International Software Systems Solutions for US$35,000.

IBM has unveiled a dedicated information technology services programme to help small Hong Kong firms exploit business opportunities across the border.

February 26, 2004

US promotes "smart" shipping with high-tech containers

The US government is bent on taking the cargo container upmarket, so as to track and monitor ever-moving containers, to heighten security. "Smart" container technology is near to being commercially introduced, with logistical and cost implications for suppliers around the world.

It is expected that the "smart" container will be able to detect when a seal is broken and have the ability to communicate irregularities to a shipper or receiver via satellite or radio transmission.

Some envisage cargo containers having an arsenal of sensors to show temperature, air pressure, motion, chemical or biological contamination or location.

The US Department of Defense currently has a scaled-down version of such a container, using radio frequency identification technology (RFID) to track about 25,000 containers a day. The system includes a radio transmitter and receiver attached to the container, which is linked to a central data system.

True "smart' containers are a step up from there. They can be located in seconds, worldwide. They can inform their owners they are delayed at a port, or relay information about their condition.

For the owner, there is the added benefit of tracking the position and transit movement of goods for inventory control and checking for damage or theft.

The drawbacks include the possibility of false alarms that can lead to inefficiencies and the increased cost of containers. These could add US$50 to US$1,800 to the cost of a container.

Additionally, the Washington DC-based World Shipping Council has issued a white paper, which concludes that "e-sealing" won't solve the container security problem.

The commissioner of the US Bureau of Customs and Border Protection says that many officials prefer to arrive at a minimum standard for "smart box" technology, perhaps including a high-strength bolt to secure a container's doors and a device to detect whether the box has been opened by unauthorized people.

One possibility in the field is the NaviTag Technologies' device, which pinpoints the position of a container in real-time visibility tracking anywhere on Earth.

Boeing is opting for motion detection technology and developing its own RFID device.

Savi Technologies, set up by the US Defense Department, is perfecting its version of such devices, while the controversial Skybitz, which has been accused of pyramid selling, is proposing to use satellites as its main communication tool.

There is increasingly less likelihood that such devices will be ignored in the future, and could indeed add value to services near term.

February 12, 2004

Wuxi-based chipmaker CSMC Technologies plans to use the proceeds from its April IPO to fund expansion, including the building of a US$1 billion, 200mm-wafer plant.

One of China's top chipmakers, Semiconductor Manufacturing International Corp (SMIC), has filed a preliminary prospectus with US securities regulators to raise US$714 million in an initial public offering in Hong Kong and New York.

United States internet search giant Google is building its mainland presence, unveiling a keyword advertising service for both simplified and traditional Chinese characters.

February 3, 2004

A Chinese company, Evermore Software from Wuxi city in Jiangsu province, will soon be the first domestic firm to go head to head with Microsoft in the overseas office software market. The firm is about to release an English-language edition of Integrated Office (EIOffice), a suite of productivity software.

January 27, 2004

Hong Kong Computer Society president Daniel Lai says e-learning is a market with vast economic potential for Hong Kong. A group of information technology associations has asked the government to back a plan that would establish Hong Kong as an e-learning hub for China.

Government plans to cut its higher education budget have dampened prospects for the territory's leading supercomputing initiative, at the University of Hong Kong (HKU).

Anti-virus firm MessageLabs will launch a fraud protection message filtering service in Hong Kong this week to help internet home-users fight against "phishing" scams designed to trick users into disclosing valuable information.

December 11, 2003

Online game developer Shanda Networking is the mainland's fastest-growing company in the telecommunications, media and technology (TMT) industry this year, according to Deloitte Touche Tohmatsu.

Ningbo Bird, the mainland's largest domestic manufacturer of mobile phones, hopes to ship 20 million handsets next year as overseas sales account for a greater portion of its revenue.

November 24, 2003

The number of mobile-phone users in the mainland has exceeded that of landline subscribers for the first time, according to the Ministry of Information Industry.

Spending by Asia-Pacific countries on information technology (IT) security will rise sharply in the coming years due to growing internet usage and increased business uncertainty, a study shows.

Yahoo! has expanded its China operations by paying US$120 million to acquire the Hong Kong-based software provider of a leading mainland internet firm.

November 18, 2003

Greater China has moved up the ranks of owners of the world's fastest supercomputers by increasing the number of its top-ranked sites to 17, led by high-performance systems from the mainland's Legend Group.

November 14, 2003

Mainland chipmaker Shanghai Belling will proceed with a 383 million yuan (HK$355.8 million) plan to make eight-inch silicon wafers despite failing to secure a strategic foreign partner in the joint venture.

ZTE, China's largest publicly traded phone equipment maker, aims to boost mobile handset sales volume by 40 per cent next year, helped by increased marketing spending and lower-priced models. ZTE has hired action movie star Jet Li as a spokesman and introduced cheaper handsets to challenge giant handset makers like Motorola and Nokia.

Mergers and acquisitions among telecommunications operators in the region were expected to increase next year as their credit ratings stabilize, said French credit rating agency Fitch Ratings.

November 6, 2003

Wireless Mobility: Cellular versus WiFi
By Alan Lam

Since I saw my first WiFi (802.11) network at a COMDEX 3Com display back in 1998, WiFi has exploded on the market, primarily due to dramatic decreases in hardware cost. Previously a WiFi access point cost approximately $1,500; Now they are priced as low as $120. A WiFi card for your laptop was about $600, but now some cards are only $50.

The cellular "data link" suppliers originally charged the customer for each minute of connection time. Now many cellular plans offer unlimited access.

Though both cellular and Wi-Fi offer mobility to laptop users, the technology, speed, usage cost and coverage are very different.

WiFi (Wireless Fidelity)

The Wi-Fi radio frequency is the same frequency as your wireless phone. In practical terms it has a range of only a few hundred feet, but it provides Ethernet speed: "firehose" capacity when you may only need Internet "garden hose" speed. One major misconception, however, is that WiFi is free if you can find a signal. The fact is that it is free only if the provider of the signal allows you access to their site. It's sort of like having a public phone at the gym. Most providers of WiFi access will charge you for the use of their Internet access, but it provides you with a high speed wireless connection just like your office or home DSL or cable modem. So, when you are out of your home or office, it's probably well worth it.

Cellular phone data cards are simply wireless modems that connect to the Internet via the same cell sites that your cell phone uses, but instead of transmitting your voice, it transmits data only. A recent significant advancement is the Sprint PCS Data Card. It has a connection speed two to four times faster than the conventional "dial-up" network, and you are completely "wireless and mobile" in the field, airports, outer islands, and mainland ... in other words, wherever you can use your cell phone.

Which is your best business choice: None, one, or both? If you are a "Desk Warrior" with minimal business travel then "none" is probably OK. If you in the field and know there are enough WiFi "Hotspots" in your area of travel, and you are willing to "stay put" there for your connection, then WiFi is for you. If you are moving throughout the day by car, going inter-island or to the mainland, and/or travel frequently, then a Sprint data card is for you.

If you need the best of both worlds-high speed wireless access and almost unlimited local and national mobility, then both WiFi and Sprint cards will meet your needs. This is the solution I use for my business. You will have the tools of your office: fax, documents on the server, email, and phone communications without ever having to return to the office just to get information. You just return to the office occasionally to get the "water cooler gossip."

My company offers wireless service plans from several cellular providers. Please call us for attractive and competitive business plans at 808-261-7761.

Alan H. Lam is the president of Quorum LLC, He can be reached via email at:

"Technology Consulting and Integration"
350 Ward Avenue, Suite 106, Honolulu, Hawaii 96814
808-261-7761, 808-261-6625 fax

November 5, 2003

Huawei Technologies' plant in Shenzhen, where low- priced routers are made. This year Huawei expects to export $1 billion of equipment - an 80 per cent increase. Huawei Technologies, which began as a seven-person start-up making analogue parts for telephone switchboards, today has 22,000 employees, sells equipment in 40 countries and is pushing into the US through its partnership with 3Com.

Swedish telecommunications networks giant Ericsson hopes the launch of next-generation mobile networks by Chinese carriers will make the mainland the company's largest revenue contributor.

October 24, 2003

Leading contract microchip maker Taiwan Semiconductor Manufacturing Company (TSMC) will invest US$10 billion in a Shanghai industrial park in the next 10 years, state press reported on Thursday.

The Asia-Pacific semiconductor industry was on the rebound and could look forward to annual sales growth of more than 15 per cent in the next four years, technology research house Gartner said on Thursday.

October 16, 2003

Software giant Microsoft is tackling the mainland's growing domestic demand by forming a new unit that, for the first time, will develop and launch software for the Chinese market.

Spending on telecommunications networks will start to pick up in Asia-Pacific next year, with mainland carriers expected to lead the way as they deploy next-generation mobile networks, according to International Data Corp (IDC).

October 13, 2003

Despite all the hype about the abundant and cheap pool of talent on the mainland, Hong Kong technology companies are cautious about setting up research and development (R&D) centres there.

Cisco Systems, the world's largest maker of internet routing equipment, is optimistic it can stem a loss of market share in Asia to lower-cost rivals such as China's Huawei Technologies.

October 11, 2003

Two Russian-trained pilots have been tipped as the leading candidates for China's first manned space flight - although only one is likely to be selected for the mission.

October 10, 2003

Taiwan Semiconductor Manufacturing Company (TSMC) said on Thursday it had invested NT$1.89 billion (US$56 million) in its China subsidiary as part of its plan to set up a NT$33.75 billion (US$1 billion) semiconductor plant in the mainland.

Wavecom plans to move production of its mobile phone modules to the mainland, hoping to take advantage of increased demand amid government efforts to encourage Chinese manufacturers to source more of their parts domestically.

October 7, 2003

Efforts by Hong Kong software firms to take on government-backed technology projects in the mainland may also benefit foreign high-technology companies.

Technology and education are coming together in Shanghai in an attempt to realize the city's goal of becoming a bilingual city by 2010, according to Asia Broadband, a company at the forefront of using advanced technology for educational purposes.

With worldwide sales in handheld devices in its third consecutive year of decline, Palm is turning its eye to China which has become the largest market in the Asia-Pacific, outside Japan.

September 15, 2003

Semiconductor Manufacturing International Corp (SMIC), China's earliest foreign-invested chipmaker, has raised US$630 million from a private placement amid speculation of its imminent acquisition of a stake in Motorola's Tianjin semiconductor plant.

August 29, 2003

Mainland telecommunications equipment maker Datang Telecom revealed government plans yesterday to financially back an indigenous mobile phone technology that could limit and delay opportunities for rival Western systems.

Siemens and Huawei Technologies plan to form a US$100 million joint venture to develop the mainland's third-generation mobile-phone Time Division Synchronous Code

Nokia, the world's largest manufacturer of mobile phones, has unveiled its long-awaited CDMA (code division multiple access) handsets for China Unicom's 2.5 generation network.

August 11, 2003

Idea Expert's Robert Chan says his firm first conceptualized the Twin-TV two years ago, primarily as a solution for salespeople who spend a lot of time on the road, lugging heavy laptops for presentations.

July 7, 2003

3Com North Asia chief David Tang sees the venture becoming the leading enterprise networking equipment supplier in China. Networking gear maker 3Com, which has suffered several years of diminishing sales, hopes to turn its fortunes around through its joint venture with the mainland's Huawei Technologies.

Hong Kong has risen in the ranks of owners of the world's fastest supercomputers by doubling the number of its high-performance computing sites over the past six months.

July 2, 2003

This Hawaii Investment Survey is being conducted through a Social Enterprise Endowment of Harvard Business School, with the support of the China-Hawaii Chamber of Commerce, and Enterprise Honolulu, an economic development organization. 

The purpose of the survey is to collect aggregate data on the current and potential investment capital flows into the state of Hawaii.  This research is being conducted to identify investment trends and make recommendations to improve the future investment climate in Hawaii  

All data collected in the survey is strictly confidential and will be reported only in aggregate form (with all company-specific information withheld).  It is important to note that your response is greatly appreciated, whether or not your company has made past investments in Hawaii. 

Participants will receive a free copy of the Hawaii Investment Survey research findings upon conclusion of the project in September 2003. 

Please check the appropriate responses in the attached form and send the survey back to, fax back to 808.536.2281, or simply fill the survey out online at  Please call 808.521.3611 with any questions regarding the survey. 

Thank you for your participation.

Johnson W. K. Choi, MBA, RFC.
President & Executive Director

June 4, 2003

Tens of thousands of jobs and billions of dollars were lost in Hong Kong and the mainland last year due to software piracy, according to a US survey.

Microsoft has launched the QTek 7070 Smartphone in Hong Kong in an effort to secure its foothold in the mobile phone market. The QTek is the first mobile phone to use Microsoft's Smartphone 2002 operating system.

The government is stepping up efforts to persuade people to use its online services, with MTR stations hosting a roadshow to publicize what is available.

June 1, 2003

AOL Time Warner, the world's largest media company, will use US$750 million from a legal settlement with Microsoft Corp to pay debt, according to chief executive Richard Parsons.

Kevin Flanagan was a casualty of the Internet's phenomenal equalizing power, the power to transfer jobs from rich countries to poor ones because location has been rendered irrelevant.

March 30, 2003

CHINA: Germany's Infineon Technologies said on Thursday it had extended a deal with Shanghai-based Semiconductor Manufacturing International Corp (SMIC) to boost its output of computer memory chips. The move, which builds on a production deal agreed between the two companies in December, reflects Infineon's strategy of concluding manufacturing agreements with foundry partners, allowing it to increase output while keeping fixed costs down.

SMIC already manufactures standard computer memory chips for Infineon at its 200mm wafer plant in Shanghai, using technology from the German company that allows chip circuits as small as 0.14 micron to be produced on a chip. The extended deal will allow Infineon to increase its overall capacity by about 15,000 wafer starts per month at a new plant using more advanced 300mm wafer technology that SMIC is currently building in Beijing. Infineon said the agreement, which adds more capacity to a market which is already chronically oversupplied, would consolidate its position as the world's third-largest manufacturer of dynamic random access memory (DRAM) chips. A spokeswoman said the deal was unrelated to Infineon's dispute with its estranged Taiwanese partner Mosel Vitelic over their ProMOS joint venture and said lost production from ProMOS would be made up elsewhere. The new 300mm technology, which Infineon is already using at its own production plant in Dresden, Germany, allows significantly more chips to be produced from a single silicon wafer, boosting efficiency and cutting production costs.

TAIWAN: Watching its once world-beating computer manufacturing industry ebb away to China, is striving to acquire a new specialty - research and development. Taiwan faces a tough task in transforming its manufacturing economy into a knowledge-based one, despite its early victories in luring household names like HP, Dell and Sony to set up R&D centers. Two big question marks are Taiwan's lack of a large talented labor force and meagre domestic corporate spending on research. "I am kind of doubtful about the plan because the personnel problem can be a major obstacle," said Lin Chu-chia, an economics professor at National Chengchi University. "The quality of our R&D people in the design and application sector is not bad, but there aren't many of them," he said.

March 9, 2003

China had developed its own digital signal processing chip used in mobile phones and digital cameras in an effort to reduce reliance on imports, the official Xinhua news agency said on Thursday. The chip, which translates information such as sights and sounds into digital data, was the result of a two-year effort led by Professor Chen Jin of Shanghai's Jiaotong University, it reported. Taiwan-backed Chinese chip maker SMIC has said it may produce the digital chips at its Shanghai foundry once they are fully developed. China, eager to prove its technological savvy by launching domestically produced microprocessing chips, a next-generation mobile service and astronauts into space, has imported digital chips worth about US$1.22 billion a year since 2000. China's 16-bit chip is capable of conducting more than 200 million instructions per second.

February 4, 2003

China: Microsoft admitted running losses in China for the past 10 years and was likely to continue to lose money for at least five more, according to a Forbes magazine report due for release in the US on Wednesday.

Though technically suitable for countries with large rural populations, the deployment of broadband satellite services in China still faces a number of hurdles. "Currently, the penetration of satellite broadband in China is limited to schools and enterprises due to the lack of knowledge about the technology," said Maurice Liu Tsun-wai, Asia-Pacific sales director for New Skies, a satellite provider based in the Netherlands.

January 24, 2003

China: A Taiwan Semiconductor Manufacturing Company (TSMC) engineer inspects a silicon wafer. The Taiwan chipmaker plans to invest US$898 million to build a factory outside Shanghai. Taiwan Semiconductor Manufacturing Company (TSMC) has received preliminary government approval to become the island's first chipmaker to open a factory in China, clearing the first hurdle in its bid to end a decades-old ban.

Hong Kong: The University of Science and Technology (HKUST) has called for further private sector investment in its information technology (IT) park in Guangdong to help promote economic development in the Pearl River Delta. Its vice-president for research and development Otto Lin said yesterday further growth in the region could provide more industrial support for research in local universities, faced with a possibly heavy cut in government funding due to the huge budget deficit. Accusing the government of spending only paltry sums on research and development, he said the struggling economy had caused a reduction in research funding from the industrial sector. He said the Nansha Information Technology Park in Panyu, Guangdong, could help with technological development and training of mainland talent in the region. "There could also be more collaboration between industries and local universities as the economy develops there." He pledged that HKUST would take the lead in promoting economic and technological co-operation between Hong Kong and the rest of the delta. "Companies can do product development at much lower costs in the park." But he questioned why there was such a huge budget deficit, estimated at about $70 billion for this financial year. Investment in scientific research was necessary for improving Hong Kong's competitiveness in a knowledge economy, he said. Hong Kong ranked 45 out of the 49 countries polled in the world competitiveness study carried out by the Swiss-based Institute for Management Development in 2001. It invested only 0.25 per cent of its gross domestic product on research and development, lagging behind Taiwan, which ranked 10th, and Singapore, in 14th place. The Nansha IT Park, a joint venture which was set up between the Fok Ying Tung Foundation, set up by tycoon Henry Fok Ying-tung, the Guangzhou government and HKUST, provides support for technological development and professional training in hi-tech fields.

January 2, 2003

Cisco Systems reigns as the biggest seller of machines used to direct Internet traffic, but new rivals - such as PC maker Dell and Chinese telecom equipment maker Huawei - want to eat into its meat-and-potatoes business with lower prices.

International Business Machines said it had closed a deal to sell its hard-disk drive assets to Hitachi for US$2.05 billion as part of IBM's effort to cut non-performing assets.

December 23, 2002

Sun Microsystems won a major antitrust victory against Microsoft on Monday when a federal judge ordered Microsoft to distribute Sun's Java programming language in its Windows operating system.

November 27, 2002

China: PalmSource, developer of the Palm operating system, plans to announce partnerships in China that will see the Chinese version of Palm 5.0 appearing in communicators - devices that support wireless voice and data. The company, which sees its software going beyond hand-held computers and smart phones to more commonly used gadgets such as wristwatches, expects to announce the partnerships in the second week of December.

October 11, 2002

Microsoft licensing upsets customers

Microsoft made mistakes when it introduced a new software licensing plan this year that encourages customers to sign up for locked-in upgrades with fixed payments, chief executive Steve Ballmer has admitted.

"We still have customers today who tell us, 'Look, we can't understand your end-user licence agreement. It's long and complicated. We don't understand.' So we're looking to simplify those," Mr Ballmer told the Gartner technology conference.

Mr Ballmer said Microsoft would make some changes to the way it sold its software to businesses after making mistakes when it introduced a system of locked-in upgrades and fixed payments.

Complete Story from South China Morning Post Hong Kong

February 22, 2002

Microsoft Licensing & Pricing - Critical to act before July 31, 2002 

Enterprises wishing to upgrade Microsoft products in the next 12 to 24 months that do not take advantage of Upgrade Advantage "UA" offering available until July 31, 2002 risk having to re-purchase all of their Microsoft Licenses.

I have attended a "Microsoft Pricing & Software Contract Negotiations" seminar sponsored by the Gartner at the Hawaii Prince Hotel on Feb 21, 2002. I think some of the information is crucial for some business using Microsoft products, please go to the Gartner's  website to obtain detail information.

Impact of change:

  • For frequent upgraders, the cost to "get current" and then maintain licenses under Software Assurance "SA" is significantly more expensive than purchasing a Version Upgrades Products "VUP"
  • For infrequent upgraders, the cost to repurchase the license is also more expensive than purchasing a VUP
  • SA, as a percentage of the license cost, is more expensive than Microsoft's competitor's maintenance offerings
  • SA does not include technical support as do most of competitors' offering

There were three Microsoft representatives at the meeting, one of the representative has asked the attendees to contact her directly for questions

November 18, 2001

To Succeed in business in Hawaii, you must understand the isles - (THINK INC) Honolulu Star-Bulletin, Sunday, Nov 18, 2001 Section E2, Written by Johnson W. K. Choi, President and Executive Director, Hong Kong China Hawaii Chamber of Commerce

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Some of Guy’s speeches are listed on his website

Streaming Video on Guy's Speeches

HKCHcc (October 15, 2001) Technology 'increasingly important' to Hong Kong competitiveness - Alan Siu, Deputy Secretary, IT and Broadcasting Bureau, HKSAR.

We launched the Digital 21 strategy in November 1998. The focus at the time was to build our infrastructure - hardware like our telecommunications network and software like the electronic transactions authorization systems that allow for secure transactions. After three years we have more or less successfully completed those initiatives. Now it's time for us to make use of the infrastructure.

That's why we published the 2001 Digital 21 Strategy, changing the focus from infrastructure now to developing applications. We are also trying to encourage the community and the private sector to pay more attention to IT, to make wider use of it in the community.

Technology can't take a backseat, in fact, it is increasingly important. With the development of Hong Kong into a knowledge-based economy, we will depend more on e-commerce. In order to maintain and sharpen our competitiveness, we have to make continuous investment in these areas.

It's not enough that bureaucrats talk about e-commerce and encourage people to adopt IT, we need to set a good example for the private sector and community to follow.

We are trying to provide more government services online to set a good example for the private sector. If they have confidence that the government has successful transactions with the general public, they will adopt e-commerce themselves with their own clients in the private sector.

One of the major focal points of our 2001 strategy is to develop e-government. In doing this, we hope that, first, we can enhance our own efficiency and productivity, and second, that we can send a clear message to the general public that this is the way to go and we hope they can also engage in the adoption of IT.

Notwithstanding the slowdown of the economy and the slowdown of private sector investments, the government is maintaining its investment in technology. In fact we're increasing it because in driving forward our e-government strategy we are rolling out more projects to the private sector. This will help to groom the development of the IT industry.

One example is the Smart ID card project that is undergoing tendering with a lot of interest in the market. With this project alone, we're talking about $1.5 billion spread over a few years.

Since our online service delivery was rolled out in December last year, the uptake has gradually increased. The average number of visitors is around 70,000 per day, the average number of hits is over a million, with 6,000 to 7,000 transactions, so it's growing. You're talking about switching to an entirely different mode of transaction so you need to give time for the public to adjust.

The type of transactions that we rolled out initially were tax returns and driving license applications, which you only do once a year or every ten years. Our next step is to roll out transactions that are related more to the every day life of the people - such as booking tennis courts or subscribing to government publications - so they are more likely to use the service more often. The new services that we will introduce by the end of the year will help to further enhance the utitilisation of this scheme.

We are also trying to provide a more comprehensive service. One of our objectives is to encourage the development of e-commerce in the private sector, to make use of the same information infrastructure to encourage the development of similar services in the private sector.

In the future, you'll book government training courses online but also tickets from commercial entertainment companies. This will make the content more attractive and enriching for the general public.

When the transaction volume builds up then we will review the existing provision of counter services to see whether the present scale is still required. Within three years, we'll look at the conventional provision to see whether a substantial number of users have switched to electronic mode. In which case, we can look at cutting down some of our conventional services.

If you're talking about a counter transaction, the unit cost is much more expensive compared with the unit cost of an electronic transaction.

So, there will certainly be a cost reduction. Or to put it another way, there will be an increase in demand in the future, but we won't need to put in that many resources to cope with increasing demand because we've already adopted the electronic mode.

First, do we have sufficient quality IT manpower to complete all these developments? Our recent IT manpower report sets out a series of measures to ensure we have sufficient IT manpower to meet our demands.

Immediate measures include the admission of mainland IT professionals. For longer-term measures, we are discussing with universities how to increase the IT element of their curriculum and increase their IT student output.

Another challenge is to encourage the SMEs in the business sector to adopt the technology. We don't need to do anything with the big corporations. They are very good in their use of IT. It's the smaller companies we need to focus on.

SME's make up over 90% of our enterprises, and they are the backbone of our economy. The recent SME report on setting up various funds to help them enhance their competitiveness - funds to help them purchase equipment and provide training to their staff.

We're now in a globally connected world. We have competition with very many places, and we can't afford to stand still. That's why we have this updated 2001 strategy that sets the agenda for the next few years.

When you have a slow down of the economy, some sectors slow down their investments. Others think differently. [They think] ...we need to enhance our competitiveness. We need to make investments to make us more productive, more efficient and more innovative. There are companies that will make investments so they can meet the next wave of e-revolution and reap the greatest benefit when the next opportunity comes.

We certainly see that there are more and more conventional companies not related to the IT field that are moving into the IT sector, diversifying their business and making use of IT to enhance their overall competitiveness.

It's not about dotcom companies any more. Now you have robust conventional companies moving into IT in order to better compete in the digital economy.

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