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China, the world's largest maker of DVD (digital versatile disc) players, has launched a new format to shake off its dependence on foreign technologies but insiders question whether the so-called enhanced versatile disc (EVD) would be viable and globally accepted.

Beijing E-world Technology, the front company of a consortium of businessmen and academics, released the new format, which will be playable only on EVD players and promises five times the image quality of DVD movies and a higher data-storage capacity.

The first EVD players will be marketed next month.

A spokesman for SVA Electronics, one of China's biggest makers of DVD players, said its first EVD machines would reach shops nationwide early next month. Another eight big makers of DVD players have signed up to make EVD players.

The reason behind their switch to EVD technology is the high amount of royalty fees for using DVD technology - they pay US$9 in royalties for each player exported to nine foreign electronic giants who own DVD technologies.

China produced over 30 million DVD players last year, accounting for up to 70 per cent of the world market.

The government contributed 10 million yuan (US$1.2 million), or one-quarter of R&D costs, in 1999 after the royalty claims by foreign companies.

"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 Jie, president of E-world Technology, which designed the new standard.

The company has registered seven EVD patents and applied for 40 more.

Up to 1.8 million EVD players would be manufactured next year; and production would be boosted to 3 million in 2005 and 9 million in 2006.

The Ministry of Information Industry (MII) will set up a task force this month to study whether to adopt EVD as the new national industry standard, a ministry spokesman said.

But analysts doubt that EVDs would be widely adopted in the rest of the world even if China were to adopt it.

An EVD player costs up to 2,000 yuan (US$240) compared with an average of 1,000 yuan (US$120) for a DVD player.

More uncertain is the international market, which has moved toward DVD as the standard.

A pivotal factor would be whether Hollywood studios, which drive the world video software business, will release their films on EVD.

The SVA spokesman said negotiations on the release of some 100 films on the first EVD discs are going very well between the MII and several large Hollywood film distributors.

"The first film on EVD will be available in Chinese shops by the end of the year," he said.

Also, the popularity of EVD - which is designed for more superior image quality than DVD for high-definition TV - would be linked to the reach of HDTV, which is rather small now. China plans to introduce HDTV in phases, ending analogue transmissions in 2015.

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