China Plan Hints at Technology Power Ambitions

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China promised new jobs and more investment in homegrown technologies like its next-generation mobile standard in a growth plan for its hard-hit IT industry late Wednesday.

China will create 1.5 million jobs over the next three years as it strives to turn Chinese firms into global players in areas like integrated circuits and telecommunications, the State Council, China's cabinet, said in its plan posted on a government portal.

Beijing will specifically promote the commercial use of its 3G mobile standard in other countries, the plan said. The government is determined to see success for the standard, called TD-SCDMA (Time Division Synchronous Code Division Multiple Access), despite its unpopularity, even in China. Coverage now extends to just a handful of major Chinese cities.

The plan also vowed support for low-cost computers based on "independently designed CPUs," a likely reference to China's domestically developed Godson line of microprocessors. The chips are also known by the commercial name Loongson.

China will encourage foreign chip makers to invest more in China and push them to build research and development bases, the plan said. It will support overseas acquisitions and other moves by Chinese IT firms to expand into foreign markets, especially emerging markets, the plan said.

Firms including display and electronic component makers will also gain from higher export tax rebates, moves to stimulate domestic demand, and other policy support promised in the wide-ranging plan.

China has tried to boost domestic demand with measures including rebates for rural residents who buy PCs, mobile phones or household appliances.

Electronics account for a large part of China's exports, but sales have plummeted in recent months because of the worldwide downturn, economist Andy Xie said.

There is an "obsession" with technology among many top Chinese officials who were trained as engineers and see the sector as crucial for the country's economy, Xie said.

But government money alone cannot end the recession or make Chinese technologies globally successful, Xie said.

China will also have to attract entrepreneurs from all over the world to become a technology power, he said.

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