China's major consumer electronics manufacturers have released their results for the first half of 2005, and in general, air conditioners and flat-panel TVs led growth, but air conditioners are facing increasing production costs.

Rumors have been circulating recently about a new national policy on chip development, with chip designers potentially being the chief benefactors. But according to industry insiders quoted in China Business, it's not the designers who need favorable treatment. Rather, China needs to foster development of systems and software that use the chips already designed.

According to data announced by IDC in July, China is the largest market for IP phone use in Asia, with 2004 revenues from IP telephone services totaling US$4.5 billion. The Economic Observer looks at several reasons behind the explosion of IP phone use.