China's digital video market................................
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Posted: 5:30 p.m., EDT, 9/4/98
China gears up for digital broadcasts
By Sunray Liu
BEIJING - China's nascent broadcast industry is looking for ways to boost its domestic TV, radio and cable equipment sectors as planners decide whether to adopt a U.S. or European digital-broadcast standard.
Speaking at a recent industry exhibition here, a senior government official laid out plans for converting China's broadcast infrastructure to digital technology. Zhang Haitao told an audience at the Beijing International Radio, TV and Film Exhibition (BIRTV) that interim technologies such as set-top boxes will be critical to China's transition from analog broadcasting.
"We are working hard to trace global technology progress in the TV and radio industry, such as DBS, digital video and audio equipment, HDTV, [set-top boxes] and other new-generation terminals," said Zhang, who is vice director general of China's State Administration of Radio, Film and TV. "In the meantime, we shall focus on pushing new technology transfer to industrial products, we shall cooperate with some important foreign companies and we shall form [industries] with our intellectual-property rights eventually."
The sheer size of the Chinese TV and radio markets has caught the attention of European, Japanese and U.S. manufacturers as well as standards groups. There are an estimated 300 million analog television sets in China, along with 500 million radios. The emerging digital market is expected to be equally large.
Proponents of the U.S. Advanced Television Systems Committee's standard and of the European Digital Video Broadcast (DVB) spec attended the BIRTV expo to promote their broadcast models. Though China is also considering a Japanese digital TV spec, most observers here believe it's a race between the U.S. and European approaches.
The ATSC standard was demonstrated last year from the Great Wall. DVB forces staged a terrestrial-broadcast trial earlier this year, transmitting signals from the China Central Television tower near the exhibition site where it was received and replayed.
Precisely when Chinese officials will select a digital TV standard is hard to predict, especially in light of a government shakeup that involved officials who were charged with administering radio, TV and film industry issues.
The Chinese government is planning to begin direct broadcast satellite (DBS) services next year as a way to expand radio and TV coverage beyond the current 80 percent of the country. Hence, Ku-band antennas and receivers are expected to be in greater demand as home appliances after Beijing relaxes limits on DBS services. Many local stations have already expanded to nationwide coverage using digital-compression technology for satellite broadcasts.
Planners are also looking to improve video and audio quality in advanced receivers. For example, more Chinese TV stations are planning to broadcast in stereo and are already using the Nicam multilanguage audio standard. They also plan to develop digital-audio technology in TV receivers.
China will be the fourth nation to sponsor HDTV trials beginning this month. In June, neighboring Taiwan adopted the U.S. ATSC standard for digital terrestrial broadcasts.
Plans are also in the works to upgrade China's cable TV network, which boasts 70 million subscribers and assets totaling more than $25 billion. The Chinese government is expected to set up a private company to serve cable-network subscribers. Among the technologies being considered to upgrade the cable network is Internet Protocol-based data communications.
Cable trials in two Chinese cities, Shenzhen and Qingdao, have demonstrated the feasibility of providing high-speed, broadband interactive services over cable. Both trials offered enhanced services such as TV program guides, Internet access, online stock quotes and shopping. So far, technologies like multichannel multipoint distribution services and optical fiber have been used to upgrade Chinese cable-TV networks.
On the equipment side, the Chinese government is expected to invest more than $300 million in Dalian, a city in northeast China that is becoming a key center for its electronics industry, to buy technology for producing VCRs though a joint venture with Panasonic.
On the downside, however, the Chinese interest in digital television represents at least the fourth big electronics application that was forecast to sweep the country's consumers and provide huge sales to mostly Western systems vendors - all with mixed results.
The cellular infrastructure buildout that was the talk of the industry five years ago has not caught fire. Meanwhile, digital video-disk proponents still insist that the Chinese will be buying 20 million units a year in 18 months, when only 700,000 systems were sold worldwide last year. Personal computers are now said to be the next big thing: from a base of 2,000 systems in 1991, the Chinese market is expected to absorb 2.6 million units this year.
But the Chinese economy may not cooperate. Estimates for economic growth, forecast at a hot 8 percent earlier this year, have been ratcheted down to 7 percent, and some economists believe 3 percent is more realistic.
The government has railed at the devaluation of the yen and hinted that China's renminbi, which hasn't moved an inch in the Asian currency crisis, may fall soon. At some banks, 70 percent of loans are non-performing. Topping it off, Yangtze River flooding this summer has ravaged oil fields and is expected to cost the country $24 billion.
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