Beijing E-world Technology Co Ltd, the corporate entity of a government-backed consortium of business people, academics and two DVD manufacturers, unveiled on Tuesday the indigenous higher-definition Enhanced Versatile Disc.
“It's not a question of whether we walk the EVD path. It's a question of how fast or slow we go," said Hao Chieh, president of E-world Technology which designed the new standard.
But analysts doubt that EVDs would be widely adopted in the rest of the world even if China was to adopt it.
The move aims to reduce the drain of what domestic DVD makers consider exorbitant patent royalties they must pay to a group of mostly Japanese electronics conglomerates.
It also aims to avoid over-reliance on foreign technology and could transform China from a mere copier and global factory to an innovator in audio visual technology.
Hao is convinced domestic DVD makers will switch to EVD because royalty payments totalling 2.7 billion yuan ($325.3 million) have eaten into their profits.
EVD may not knock DVD from its leading position yet-only five of China's more than 100 DVD makers have signed up to make EVDs.
Talks are also under way between domestic DVD makers and the foreign conglomerates on royalty payment for DVDs sold in China.
But EVD may not knock DVD from its leading position just yet.
The Ministry of Information Industry will set up a task force this month to determine whether to adopt EVD as the new national industry standard, said a ministry spokesman. There was no timetable for a decision.
DVD is the current unofficial national standard. More than 100 domestic DVD makers produced about 30 million players last year, almost double the 2001 figure, state media said.
China exported 20 million players in 2002, accounting for up to 70% of the global DVD market.
Only five of China's more than 100 DVD makers have signed up to make EVDs. SVA Electronics, one of China's biggest DVD makers with annual output of about five million, has started mass production, said a company spokesman.
Up to 1.8 million EVD players would be manufactured in 2004, said Hao. Production would be boosted to three million in 2005 and nine million in 2006.
An EVD player costs up to 1,900 yuan ($230) each compared with an average of 800 yuan for a DVD player.
“Even if China were to adopt EVD it seems unlikely that it would be widely adopted in the rest of the world," said Helen Davis Jayalath, a senior analyst with the London-based Screen Digest, a market research journal on audio visual media.
“For this to happen the Hollywood studios, which drive the world video software business, would have to release their titles on EVD," she said.