MII spokeswoman Yuan Fantai confirmed that the government would not approve new foreign investment in mobile phone manufacturing, one of 17 supposedly oversupplied industries so restricted. A MOFTEC senior researcher, Ma Yu, also said that Beijing was "placing a greater emphasis" on enforcing quotas that require foreign-invested enterprises to sell only a small quantity of their output on the domestic market.

Ma didn't seem to think any of this necessary, commenting, "If the government is using administrative orders to forbid a company from taking on the competition, this is protecting the backward." Ma warned that Chinese consumers may not take kindly to the government's intervention. "If foreign phones are good and cheap, consumers will prefer them, and if the government stops imports, then people will smuggle them."

A recent survey of mobile phone users sheds light on the "vicious" competition facing domestic producers. Motorola, Nokia and Ericsson dominate China's mobile phone market, together holding almost 83% market share.

These policies may not simply emanate from the fervid imaginations of MII technocrats. All China's major newspapers reported on Tuesday that the Communist Party and the State Council had decided last week to pursue policies that promote technological growth and innovation. These would include encouraging government institutions and state-owned enterprises to buy domestically produced technological products.

And for those who think all this only concerns China's domestic markets, Great Dragon Telecommunications recently announced a joint venture in Columbia to construct an 11,000-line telephone system, including ISDN and wideband service, over the next ten years. Not surprisingly, such export-oriented spirit has the blessing of the Chinese government, which kicked in a US$7 million "preferential discount" loan to the $8.5 million venture. Did all this 'international co-operation and exchange' involve tech transfer?

China's Ministry of Information Industry released a raft of telecoms statistics showing nominally healthy expansion during the first half of the year. But MII chief Wu Jichuan revealed that the number of loss-making enterprises and the volume of losses are growing, while investment in fixed assets has dropped.

Still proudly bleeding red ink, China.com took a few lumps from the chattering classes this week. I.T. Daily's Neil Taylor advised the company to either dump its portal pretensions or spruce up its content, which he ripped unmercifully. "In fact, everybody in the organization seems to admit that China.com's content sucks." Senior VP Ian Henry didn't exactly demur, telling the Far Eastern Economic Review recently, "We don't have the best product and that's fine. But we know where we're going."

That's just the problem according to Taylor, who has little faith in China.com's ability to fuel its portal strategy with worthwhile content given the company's ties with Xinhua, China's official news agency. China.com's CEO Peter Yip not surprisingly doesn't see it this way. "We could not have picked a better partner than Xinhua," Yip told the press last week. "We're looking to them for guidance." Pax vobiscum.

Noting that China.com's stock has dropped to $35 from its post-IPO high of $67, Worldlyinvestor.com's Gabriella Faerber also cast doubt on the company's eyeball-driven portal strategy. She also noted that other, more frequented China portals like Sina.com will soon compete for Wall Street's attentions.

Soon may mean 1999. With Sina.com's president Wang Zhidong in the US parading his 900,000 users and 3.4 million daily pages before potential investors, news leaked that the company will offers its stock to the public by the end of the year. Sina.com reportedly has not decided whether to list on NASDAQ or on Hong Kong's new Growth Enterprise Market (GEM). Someone should tell Wang that Wall Street could use a China portal sporting both readable content and visitors.

To add insult to injury, 140 academics and 101 legislators in Taiwan called on the island's government to sue for the rights to 'taiwan.com' in US court. If only they would. At least Lehman Brothers still loves poor 'ole China.com. "Based on the company's impressive 1H99 and 2Q99 performance, we would buy China.com stock aggressively at current prices."

When the censors say no, just try the web. Using the Web-privacy site Anonymizer.com, Lord David Alton of Liverpool, a long-time opponent of China's population control program, is attempting to survey Chinese women about their experiences under China's one-child policy. "We know the facts, but need the evidence," Alton said.

Anonymizer.com claims it can protect the privacy of respondents, even providing a link (albeit malfunctioning) to a site offering 128-bit encryption for Netscape browsers. You can even check the level of your current level of encryption.

Lord Alton may soon have more Chinese to survey if the Yankee Group's recent report on Internet usage proves out. Total users in Asia will reach 374 million by the end of 2005, with China's Net population hitting 40 million by 2001 and topping 140 million in 2005 to surpass the US. Such numbers make other recent projections seem gloomy by comparison.

Will free PCs pave the way to such mass Internet usage? Beijing East Telecommunications and TCL Computer seem to think so, reportedly following Netchina and Hengsheng in offering PCs in return for long-term Internet subscriptions. They hope to avoid the underwhelming response to their predecessors' plans by offering flexible pricing plans. US$845 will buy you a computer and three years of unlimited Internet access. Oddly, the machines will run on Intel's 386 processor according to China Business. If true, this means cheap surfing will be very s-l-o-w.

If not free PCs, then maybe cable? Eyeing China's much-vaunted 80 million cable viewers, China's State Administration of Radio Film and Television (SARFT) revealed plans to roll out cheap, fast broadband services over its cable network within the next three to five years. China Network Communications Corp.'s 15-city Internet backbone will form the core of the network.

"We're going to take the Chinese people into the Internet age in one shot," SARFT's chief cable network engineer, Fang Hongyi, declared. Fang envisions citizen networks springing up everywhere. "People could set up an ISP in their apartment," he predicted.

All this may not sit well with MII's mandarins, who still have some say over such schemes. But Fang claims that Premier Zhu Rongji and President Jiang Zemin support the plan. Taunting the ministry's technocrats, Fang said, "The MII wants strongly to stop the plan, but it's unstoppable." Unicom thought the same thing...

BDA's Duncan Clark suggested that this grand scheme may face more prosaic technical problems, pointing out that two-way digital traffic would require new switching equipment and beefed-up cable lines. "It's a new idea that you can run Internet Protocol technology through fiber without expensive equipment," he said. Fang admits as much, saying, "We'll need several billions of dollars to do it."

Well if not cable, what about wireless? Cable & Wireless HKT announced that it would launch its One2Free brand mobile phone service at the end of this month, allowing customers to download a selection of information from websites in text format. Hong Kong's leading teleco has been conducting trials of Nokia's Wireless Application Protocol (WAP) 1.1, the newly enhanced version of this mobile communication standard.

In the meantime, thirteen Chinese ISPs are joining forces to compete against China Telecom's Internet monolith. Sharing each other's relative strengths, they hope to grab enough market share to keep China's once vibrant indie ISP sector on life support.

Hong Kong's Ocean-Land group and an unnamed "US technology company" are in talks discussing an Internet bookstore in China. Said unnamed company is thought to be developing an on-line bookstore with Xinhua Bookstore, the mainland's largest bookseller and distributor. China's amazon.com? Nah…

Tuesday's edition of Liberation Army Daily, the PLA's official newspaper, confirmed that China has ordered all government organs offline during the 'Government Online Year' in order to prevent the "invasion and destruction by antagonistic elements." But those elements seem to be losing badly to mainland hacking groups, who have cracked 173 Taiwanese websites compared to 19 mainland sites according to unconfirmed reports. Perhaps the Taiwanese should consider China's new Linux-based server software, which comes without the "hidden peril" of foreign proprietary code.

Hacker Report: Responding to a recent I.T. Daily article questioning the Hong Kong Blondes' existence, the US hacking group Cult of the Dead Cow insisted that the group did indeed exist. "The Blondes do exist, although the CDC has truncated our official relationship with them," the group's foreign minister OXblood Ruffin told I.T. Daily. Ruffin said the group was "hyper secure," which suggests they could make life difficult for Hong Kong's proposed crack computer crime.

Potpourri: China portal MyWeb announced that it will deliver set-top boxes and portal-based information to SiFangZhiTong Science & Technology Development Ltd., a consortium of 500 primary and secondary schools with a combined population of about one million students. In return the consortium will provide educational content for the MyWeb portal. Microsoft and Qomolangma Electronic Commerce Co. have agreed to establish an online shop for Microsoft products on the Qomolangma's e-commerce website, which is scheduled to open on August 31. Canada's Zi Technology will license its Chinese-language software for use in Sichuan New Tech Digital Equipment Co.'s set-top boxes. Cisco Systems and Hewlett-Packard will upgrade Hunan Posts and Telecommunications Bureau's 163 network infrastructure, with Cisco providing the routers and H-P managing design and installation. Cisco will also work with Taiwan's computer giant Acer to develop and market products operating with Cisco's data, voice, video integration technology. Guangdong-Nortel Co., Ltd. signed a US$10 million contract to provide third-generation CDMA network equipment to Shaanxi Telecom Great Wall Co., one of China's four pilot CDMA carriers.

More Potpourri: China Philips Semiconductor will assist Qiao Xing, one of China's major telephone manufacturers, in the production cord phones, cordless phones and digital phones, with Qiao Xing getting to put its name on every chip designed by Philips in China. Efficient Networks will supply DSL equipment for XinJiang PTA's upcoming ASDL network. New T&T, one of Hong Kong's second-tier phone companies, will focus its attentions on commercial fixed-line customers rather than the cutthroat international dialing market. Cable and Wireless HKT Interactive Multimedia Services, Hong Kong's dominant Internet service provider, will soon roll out 1.5 Mbps broadband connections for small and medium businesses in Hong Kong, predicting that the broadband network will cover 90 per cent of Hong Kong's commercial buildings by the end of the year. Hong Kong's telecoms authority, OFTA, meanwhile has asked Hong Kong Cable Television to apply for a license allowing multimedia telecommunications services over its cable network in return for opening its broadband network to other operators and laying cable into areas currently served by microwave. Electronics distributor Avnet Electronics Marketing will promote its products through GTMarts Chinese-language site.

Waste of Bandwidth?: Chinese researchers will lock volunteers away in cyberspace for 72 hours, supposedly to satisfy the Ministry of Information Industry's curiosity about how the Internet will affect people's lives in the future. Several Chinese media organizations, including the People's Daily and Yangcheng Evening News, will collaborate with the Dreamer website in the experiment.

Good Samaritan Dept.: Project Hope has added an online offshoot to its charity campaign aimed at sending poor children back to school. Launched on earlier this month in conjunction Shanghai Charity Fund, Shanghai Oriental Radio and Shanghai Window, Online Help claims to have received Reminbi 42,000 in the first week.