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6 White Paper on the Business Environment in China
and Information Technology-approved trial of its 4G network processors make their way into consumer handsets, that could
in Beijing, Shanghai, Hangzhou, Nanjing, Guangzhou, Shen- potentially pose a challenge for Google’s Android as well as for
zhen and Xiamen.30 US-based chip manufacturer Qualcomm Inc.” 45
By 2013, 4G infrastructure was under construction. In The “Appliances to the Countryside” program subsidizes
August of that year it was reported that “Shenzhen-based Huawei appliance and consumer electronics manufacturers to sell
and crosstown rival ZTE have obtained about 25 percent each” goods worth a projected 920 billion yuan to customers in 14
of China Mobile’s estimated $3 billion effort to upgrade its rural provinces at discount over four years. The program began
network. Foreign firms, meanwhile, accounted for an additional with the sales of televisions, refrigerators, washing machines
third of the overall value of the contracts awarded31. and mobile phones receiving subsidies valued at 13 percent of
the purchase price34, and later expanded to include personal
“The first wave of 4G investments that began in 2010 in computers, electric bicycles, gas stoves, pressure cookers, DVD
Japan and Korea favored Ericsson and NSN, while the second players and more.35
in the United States went largely to Ericsson and Alcatel-
Lucent. Huawei won a chunk of Europe’s 4G contracts [in As of September 2011, a total of 189 million home
2012],” writes Reuters.31 appliances were reported to have been sold with an estimated
value of 429.9 billion yuan36. Roughly a year later, those figures
The infrastructure upgrade was suggested by some to be a were reported by Xinhua as reaching “283 million units of
precondition for China Mobile to offer Apple’s popular iPhone home appliances worth 681.1 billion yuan”37.
handsets to its customers31; Less than six months later “Chinese
regulators awarded 4G wireless licenses to China Mobile Ltd, Another effort to increase domestic consumption, a trade-
China Unicom Hong Kong Ltd and China Telecom Corp in program offering 10 percent subsidies for individuals and
Ltd, removing the final stumbling block to a deal that industry companies recycling old goods (many of the same items
observers had long expected.”32 covered by the “appliances to the countryside” program)
and purchasing replacements, was initiated in June 2009 as a
According to market research firm Forrester, “China Mobile trial in nine municipalities and provinces (Beijing, Shanghai,
could gain 17 million new iPhone activations in 2014 alone,” Tianjin, Fuzhou, Changsha, Jiangsu, Zhejiang, Shandong and
while it is also expected to be a “much-needed boost for Apple Guangdong)38 and was expanded to 28 cities and provinces in
in a country where it’s trailing rivals, even though China is its June 201039. Less than a month after the trial began in 2009,
second-largest market after the U.S.”32 The deal could reportedly the program was amended to allow individual consumers a
generate as much as “$3 billion in revenue [for Apple] in 2014”26. maximum of 5 such appliances with subsidy, while companies
were limited to 50.40 In total, this program is expected to
Meanwhile, “China Telecom [picked] Alcatel-Lucent to generate an additional 150 billion yuan (approximately $22
supply its next-generation 4G technology for a nationwide trial billion) in domestic spending between participating individual
of high-speed mobile broadband.”33 consumers and companies.38 A Ministry of Commerce report
in March 2011indicated that the program had stimulated 152
In March 2014, according to Wei Zaisheng, the finance billion yuan in sales of 40.27 million items, with an additional
director for ZTE, the Chinese state-owned equipment maker, 41.72 million units having been traded in39.
as told to the Financial Times, that from 300,000 4G base
stations, China is slated “to have as many as 1 million” by the Notable Policy Activity
end of the year44.
Import Tariffs on Electronic Goods
The latest chapter in China’s drive for tech self-sufficiency Ten years after the PRC’s accession into the WTO, import
– and a subsequent reduce reliance on U.S.-made technology
– sees cooperation from both state-owned companies and tariffs on some electronic products (including personal
private tech firms to make its own secure smartphones. computers and digital cameras) were cut by the Ministry of
Chinese smartphone maker ZTE Corp. is working on a secure Finance from 20 percent to 10 percent41.
smartphone for government agencies using an operating system
developed in-house, and a processor chip from a Chinese “The change will permit distributors and dealers to make
supplier, the country’s largest chip-design company, Spreadtrum their prices similar to those overseas, removing an incentive for
Communications Inc., separately said it would begin mass consumers to buy their digital devices elsewhere,” a China Dai-
producing a set of chips that run a Chinese operating system ly-quoted analyst observed at the time, referring to the common
by year-end. Additionally, e-commerce giant Alibaba says it practice of affluent Mainland consumers traveling to Hong
has joined with China’s Ministry of Public Security to develop Kong or other nations to purchase such goods—in particular
a mobile OS for police officer that it bills as more secure. The personal computers and mobile phones such as the now-ubiq-
Wall Street Journal observes that the trend is “unlikely to have uitous iPad.41
much impact on the market share in China of U.S. mobile
components and software. But if more made-in-China OS’s and
156
and Information Technology-approved trial of its 4G network processors make their way into consumer handsets, that could
in Beijing, Shanghai, Hangzhou, Nanjing, Guangzhou, Shen- potentially pose a challenge for Google’s Android as well as for
zhen and Xiamen.30 US-based chip manufacturer Qualcomm Inc.” 45
By 2013, 4G infrastructure was under construction. In The “Appliances to the Countryside” program subsidizes
August of that year it was reported that “Shenzhen-based Huawei appliance and consumer electronics manufacturers to sell
and crosstown rival ZTE have obtained about 25 percent each” goods worth a projected 920 billion yuan to customers in 14
of China Mobile’s estimated $3 billion effort to upgrade its rural provinces at discount over four years. The program began
network. Foreign firms, meanwhile, accounted for an additional with the sales of televisions, refrigerators, washing machines
third of the overall value of the contracts awarded31. and mobile phones receiving subsidies valued at 13 percent of
the purchase price34, and later expanded to include personal
“The first wave of 4G investments that began in 2010 in computers, electric bicycles, gas stoves, pressure cookers, DVD
Japan and Korea favored Ericsson and NSN, while the second players and more.35
in the United States went largely to Ericsson and Alcatel-
Lucent. Huawei won a chunk of Europe’s 4G contracts [in As of September 2011, a total of 189 million home
2012],” writes Reuters.31 appliances were reported to have been sold with an estimated
value of 429.9 billion yuan36. Roughly a year later, those figures
The infrastructure upgrade was suggested by some to be a were reported by Xinhua as reaching “283 million units of
precondition for China Mobile to offer Apple’s popular iPhone home appliances worth 681.1 billion yuan”37.
handsets to its customers31; Less than six months later “Chinese
regulators awarded 4G wireless licenses to China Mobile Ltd, Another effort to increase domestic consumption, a trade-
China Unicom Hong Kong Ltd and China Telecom Corp in program offering 10 percent subsidies for individuals and
Ltd, removing the final stumbling block to a deal that industry companies recycling old goods (many of the same items
observers had long expected.”32 covered by the “appliances to the countryside” program)
and purchasing replacements, was initiated in June 2009 as a
According to market research firm Forrester, “China Mobile trial in nine municipalities and provinces (Beijing, Shanghai,
could gain 17 million new iPhone activations in 2014 alone,” Tianjin, Fuzhou, Changsha, Jiangsu, Zhejiang, Shandong and
while it is also expected to be a “much-needed boost for Apple Guangdong)38 and was expanded to 28 cities and provinces in
in a country where it’s trailing rivals, even though China is its June 201039. Less than a month after the trial began in 2009,
second-largest market after the U.S.”32 The deal could reportedly the program was amended to allow individual consumers a
generate as much as “$3 billion in revenue [for Apple] in 2014”26. maximum of 5 such appliances with subsidy, while companies
were limited to 50.40 In total, this program is expected to
Meanwhile, “China Telecom [picked] Alcatel-Lucent to generate an additional 150 billion yuan (approximately $22
supply its next-generation 4G technology for a nationwide trial billion) in domestic spending between participating individual
of high-speed mobile broadband.”33 consumers and companies.38 A Ministry of Commerce report
in March 2011indicated that the program had stimulated 152
In March 2014, according to Wei Zaisheng, the finance billion yuan in sales of 40.27 million items, with an additional
director for ZTE, the Chinese state-owned equipment maker, 41.72 million units having been traded in39.
as told to the Financial Times, that from 300,000 4G base
stations, China is slated “to have as many as 1 million” by the Notable Policy Activity
end of the year44.
Import Tariffs on Electronic Goods
The latest chapter in China’s drive for tech self-sufficiency Ten years after the PRC’s accession into the WTO, import
– and a subsequent reduce reliance on U.S.-made technology
– sees cooperation from both state-owned companies and tariffs on some electronic products (including personal
private tech firms to make its own secure smartphones. computers and digital cameras) were cut by the Ministry of
Chinese smartphone maker ZTE Corp. is working on a secure Finance from 20 percent to 10 percent41.
smartphone for government agencies using an operating system
developed in-house, and a processor chip from a Chinese “The change will permit distributors and dealers to make
supplier, the country’s largest chip-design company, Spreadtrum their prices similar to those overseas, removing an incentive for
Communications Inc., separately said it would begin mass consumers to buy their digital devices elsewhere,” a China Dai-
producing a set of chips that run a Chinese operating system ly-quoted analyst observed at the time, referring to the common
by year-end. Additionally, e-commerce giant Alibaba says it practice of affluent Mainland consumers traveling to Hong
has joined with China’s Ministry of Public Security to develop Kong or other nations to purchase such goods—in particular
a mobile OS for police officer that it bills as more secure. The personal computers and mobile phones such as the now-ubiq-
Wall Street Journal observes that the trend is “unlikely to have uitous iPad.41
much impact on the market share in China of U.S. mobile
components and software. But if more made-in-China OS’s and
156
