To further boost the development of domestic mobile phone handsets, the Ministry of Information Industry (MII) is scheduled to release new import policies, a senior official with the MII has said.

The new regulations are related to limiting handset import quotas as well as tightening approval procedures for handset network admission certificates, said Wang Bingke, director general of the Reform and Economic Operation Department under the MII.

For example, if a company applies to import 100,000 handsets, only 20,000 are likely to get approval from the watchdog, he said.

Because of zero tariff for handset imports since January this year, the shipments grew by leaps and bounds. Figures from MII indicate imports reached 25 million units in the first half of the year, with most CDMA handsets made overseas. The figure for the whole of last year was 17 million.

The imports are mainly from South Korea, Japan and Taiwan.

Among exports, only 500,000 among 55 million units were made by domestic companies.

Wang said the ministry hopes for a balance of imports and exports as there are 37 domestic handset makers.

"However, we will continue to encourage the import of handset accessories," he stressed.

"I believe the new policy will contribute a lot to ensure the healthy development of domestic handset makers," said Wan Mingjian, general manager of TCL Mobile Telecommunications.

"The mass import of foreign handsets poses an unfair competition environment for domestic handset makers, who conduct research and development," he said. "Meanwhile, smuggled units also pose a great threat to the domestic handset makers."

Figures from Shenzhen Customs indicated that in the first seven months, imports of handsets stood at 4.57 million units, 1.9 times more than that of last year, ranking the city No 1 among all customs authorities nationwide.

Analysts believe that restricting imports will be an effective way to further standardize the domestic handset market as far as market supervision is concerned.

"We are now in a better position to compete with foreign handset makers, as we are winning increasing recognition from domestic consumers," said an official from Bird.

Figures from MII indicated that sales of handsets reached about 40 million in the first six month this year of which 22 million were domestic brands.

It is projected that by the end of the year, domestic makers are likely to command more than 60 percent of the country's market share.

"Domestic handset makers should put more effort on technology innovation," stressed Gou Zhongwen, vice-minister of the MII. "We are working on several handset-related regulations to further boost the industry," he said at a press conference last week in Beijing.

Attracted by the lucrative market, both domestic and foreign handset makers are increasing investment and promotions.

New technologies, compelling designs and multi-function instruments are becoming the selling points for their products.

Domestic companies have witnessed dramatic development in the past five years - they had only a paltry 2 percent market share in 1999, which soared to about 55 percent by the end of June this year, featuring star performers like TCL, Bird, Konka, Lenovo and Amoi.

(China Daily September 4, 2003)