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China to Launch Own HD Format

23 Sep, 2005 By: Erik Gruenwedel

China in 2007 reportedly is planning to launch a proprietary high-definition disc format for its domestic market only. The format, patterned after HD DVD, including capacity, would feature domestically created video compression, or AVS.

The Chinese government believes adoption of the AVS standard could save Chinese consumer electronics manufacturers upwards of $1 billion annually in license fees. The government would still allow manufacturers to configure the next-generation disc players with MPEG2, MPEG4 or Microsoft's Windows Media Video 9 technologies, albeit with associated license fees.

This isn't China's first effort to create a domestic technology standard aimed at thwarting foreign competition under the guise of protecting local manufacturers. Earlier this year, China announced it would adopt its own Enhanced Video Disc (EVD) as the national disc standard competing with DVD, a move that presented a potential kink for Hollywood studios' intent to tap one of the biggest developing markets for content consumption.

China has become the world's biggest DVD production and export base, according to the DVD Forum. In 2003, DVD players manufactured in China accounted for 70 percent of the world's total production volume of about 100 million units.

Regardless, the actual impact on Western technology would be minimal, according to Michael Murphy, editor of the California Technology Stock Letter and expert on Chinese technology.

“They are trying to do the same thing with cell phones,” Murphy said. “They did it with video recorders. There is obviously a homegrown favoritism toward whatever the product is and use of regulations to favor the home team.”

Murphy said it's getting harder for Chinese officials to erect barriers as the country enters the global economy, and the establishing middle class is getting sophisticated and allowed to buy things from outside the country.

“People can travel; they have access to the Internet and can get packaged media in multiple formats at virtually the same price,” Murphy said.

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