China Sets Rules for Mobile Phone Production
Feb 22, 2005
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A leading China economic planning agency has issued detailed rules aimed at standardizing the process of approving investment in the production of mobile phones and wireless telecom systems.

Companies planning to make switching equipment, base station equipment, and mobile phones that support the GSM, CDMA, CDMA2000, and TD-SCDMA standards in China must receive approval from the National Development and Reform Commission (NDRC), the agency said in a notice.

Previously, China's Ministry of Information Industry (MII) implemented a strict examination and approval system for mobile phone production in China, according to a report in the state-owned China Securities Journal.

Under the NDRC rules, firms applying to make mobile phones or mobile terminal products must have registered capital of at least CNY 200 million (approx. U.S. $24.2 million), while applicants aiming to make wireless telecom system equipment must have no less than CNY 300 million (approx. $36.2 million) in registered capital.

Applicants should be companies specializing in research, development, production, and sales of electronic information products that have been established for more than 3 years, NDRC said. The firms should also have relatively strong financial capability and be able to set up effective after-sales security systems, it said.

Applicants aiming to make mobile phones must also set up a research and development center capable of certain types of hardware design and software development, the notice said.

The NDRC said it will consult with the MII after receiving applications.

Some local white-goods makers hoping to begin making mobile handset may find the NDRC criteria -- especially the research and development requirement -- difficult to meet, said Dongming Zhang, research director at consulting firm BDA China Ltd. in Beijing. Yet some Taiwan-based manufacturers that don't have their own license under the MII system might benefit from the NDRC rules, she said. (Dow Jones)

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